Moving to spain and working for an Irish company

duttchey

HI guys, I am moving to spain in 2022 with my wife and 2 kids (11 and 9).
I will still be working for my irish company in the irish market.
Can I get a paye exclusion for ireland even though it's a lifestyle choice? Of so, can I then just do tax returns in spain and pay into their system?
My tax credits are very high in Ireland and I dont how that will be in spain.
I dont really know what to do. I need to be paying into there system so I can get health care, schools etc for this kids.
Can someone give me advice on what's the best way to do it.
I earn about 50k per year after tax in ireland, how will that go in spain tax wise?

Thanks

listermint

Does the Irish company have a local Spanish office that you will be transferred to ?

Calahonda52

Mod, maybe move to taxation.
Are you selling any assets before you go such as PPR?

grassylawn

IIRC if you live more than half the year in Spain then you pay income tax in Spain instead.

I remember the lower tax rate being presented as an incentive for people to move to CA in a place I worked. Didn't seem to factor in that the cost of living there would be a multiple of what it is locally (not based in Dublin or Cork).

duttchey

listermint wrote: »

Does the Irish company have a local Spanish office that you will be transferred to ?

No, it's just a lifestyle choice.

duttchey

Calahonda52 wrote: »

Mod, maybe move to taxation.
Are you selling any assets before you go such as PPR?

No, nothing at all.

JimmyVik

duttchey wrote: »

No, nothing at all.

Does your employer know yet.
There are probably things for them to do for this move as well.

duttchey

grassylawn wrote: »

IIRC if you live more than half the year in Spain then you pay income tax in Spain instead.

I remember the lower tax rate being presented as an incentive for people to move to CA in a place I worked. Didn't seem to factor in that the cost of living there would be a multiple of what it is locally (not based in Dublin or Cork).

Ok and do I get a paye exclusion for ireland then or how does it work?

duttchey

JimmyVik wrote: »

Does your employer know yet.
There are probably things for them to do for this move as well.

He doesnt yet, I want to try and find out the best way to do it before I inform him.

manonboard

Yeah the employer will need to have a taxation branch over there, or else ask them to move to a contractor contract.
You can then set up a company over there as a sole trader and it makes it ALOT easier for the employer.

I'm doing the exact same to portugal at the moment. Its by far the easier way, and unless there is a tax branch already from your employer. Its mostly the only way forward.

ted1

manonboard wrote: »

Yeah the employer will need to have a taxation branch over there, or else ask them to move to a contractor contract.
You can then set up a company over there as a sole trader and it makes it ALOT easier for the employer.

I'm doing the exact same to portugal at the moment. Its by far the easier way, and unless there is a tax branch already from your employer. Its mostly the only way forward.

Don’t you lose job security, pension, sick pay, redundancy pay etc.

duttchey

manonboard wrote: »

Yeah the employer will need to have a taxation branch over there, or else ask them to move to a contractor contract.
You can then set up a company over there as a sole trader and it makes it ALOT easier for the employer.

I'm doing the exact same to portugal at the moment. Its by far the easier way, and unless there is a tax branch already from your employer. Its mostly the only way forward.

Yeah I figured that could be done - ideally not though. Better to be fully employed with 2 kids I think for security.

Would there be big cost for the employer to be registered there for taxation.

duttchey

ted1 wrote: »

Don’t you lose job security, pension, sick pay, redundancy pay etc.

Exactly, very risky with 2 kids.

duttchey

manonboard wrote: »

Yeah the employer will need to have a taxation branch over there, or else ask them to move to a contractor contract.
You can then set up a company over there as a sole trader and it makes it ALOT easier for the employer.

I'm doing the exact same to portugal at the moment. Its by far the easier way, and unless there is a tax branch already from your employer. Its mostly the only way forward.

What are the tax brackets etc as a sole trader.

Swampy

duttchey wrote: »

Yeah I figured that could be done - ideally not though. Better to be fully employed with 2 kids I think for security.

Would there be big cost for the employer to be registered there for taxation.

AFAIK yes. They would need to form a legal entity. Normally a very big step. They could use an agency maybe but that would probably be cost prohibitive.

manonboard

duttchey wrote: »

What are the tax brackets etc as a sole trader.

https://www.europeaccountants.com/spain/tax-rates

This provides the details for that

Mimon

duttchey wrote: »

He doesnt yet, I want to try and find out the best way to do it before I inform him.

A lot of companies won't allow it as they have to have staff in Ireland to avail of our low corporation tax.

Maybe first port of call should be talking to them?

manonboard

duttchey wrote: »

Would there be big cost for the employer to be registered there for taxation.

It's not something your employer will do for 1 employee. Its big job, and there are legal repercussions and reporting changes required for a company. Its a no go for a single employee

duttchey

manonboard wrote: »

It's not something your employer will do for 1 employee. Its big job, and there are legal repercussions and reporting changes required for a company. Its a no go for a single employee

Could it not be possible that I pay tax in Ireland and pay any balance in spain?

CelticRambler

manonboard wrote: »

You can then set up a company over there as a sole trader and it makes it ALOT easier for the employer.

Be careful of the terms you use: the status of sole trader is not the same as that of a company. I think you mean to refer to creating a single-director company, which can provide services to just one (foreign) customer. A sole trader usually has to demonstrate that they have multiple customers.

duttchey wrote: »

Exactly, very risky with 2 kids.

Nah. I upped and left for France with a wife and 4, no job, and no house.

Seventeen years later, I have the house, but still technically have "no job" as I only work very short contracts, for a total of 16-20 weeks a year. Would never go back to permanent pensionable employment again - especially with children.

Mrs OBumble

duttchey wrote: »

Could it not be possible that I pay tax in Ireland and pay any balance in spain?

Not unless you are tax resident in Ireland.

You also need to figure out how you can get access to health and education systems in Spain. (Hint: likely to be difficult unless you are working for a company there.)

johnwlee

Great discussion thread.

First of all, you can't do any solo runs on this. It's crucial to consult with your employer beforehand because moving there without doing so could trigger a range of tax (corporation tax, individual tax), employment law and other risks that could give serious headaches to both you and your employer if not properly thought through.

Likewise, there are no quick and easy or black/white solutions to these. Take the contractor route, in some countries, such as the UK, IR35 rules make it tricky to be a contractor. Ultimately if the substance of a relationship is employee/employer then the tax authorities will often push it to be taxed accordingly.

If you're seriously exploring it, then it's probably not a bad idea to contact the local co-working hubs in Spain, like in Madeira to name but one, and see how the community members there solved it.

My suggestion would be to talk to it with your employer, then if they give a blanket no, possibly look at getting your own tax advice (e.g. From a local expat accountancy firm or from solutions like WFA dot team). Then at least you'll be able to have a well-informed conversation. If they still refuse, then there are some emerging jobs boards like Remote-Europe (dot com). which are worth a look. Good luck!

duttchey

johnwlee wrote: »

Great discussion thread.

First of all, you can't do any solo runs on this. It's crucial to consult with your employer beforehand because moving there without doing so could trigger a range of tax (corporation tax, individual tax), employment law and other risks that could give serious headaches to both you and your employer if not properly thought through.

Likewise, there are no quick and easy or black/white solutions to these. Take the contractor route, in some countries, such as the UK, IR35 rules make it tricky to be a contractor. Ultimately if the substance of a relationship is employee/employer then the tax authorities will often push it to be taxed accordingly.

If you're seriously exploring it, then it's probably not a bad idea to contact the local co-working hubs in Spain, like in Madeira to name but one, and see how the community members there solved it.

My suggestion would be to talk to it with your employer, then if they give a blanket no, possibly look at getting your own tax advice (e.g. From a local expat accountancy firm or from solutions like WFA dot team). Then at least you'll be able to have a well-informed conversation. If they still refuse, then there are some emerging jobs boards like Remote-Europe (dot com). which are worth a look. Good luck!

Great advice, thanks very much. I am in touch currently with Spanish tax company or something like that. I am waiting on them to come back with informed.

It seems to be possible to get a Paye exclusion in Ireland and then them company would hire a payroll company in spain and I could possibly cover the cost for them. It is looking like it might be the most straight forward way to do it. I'll see what they say and then go from there.

I will post the information when I get it for future reference for anyone.

Buddy Bubs

What's in it for the company OP? Why would you think they'll jump through hoops with tax rules so employees can live where they like? I've a feeling they'll say no. We have already said no to someone looking to move to rural Ireland with the promise of a permanent work from home setup and tax doesn't even come into that one.

By all means move but I can't see this working out with your employer at all.
Don't get hopes up or make arrangements without talking to them. And when you do, be very clear and specific about how it will work

zweton

Yeah thats the thing...whats in it for the employer, especially if they have a "next man up" mentality culture...

duttchey

Buddy Bubs wrote: »

What's in it for the company OP? Why would you think they'll jump through hoops with tax rules so employees can live where they like? I've a feeling they'll say no. We have already said no to someone looking to move to rural Ireland with the promise of a permanent work from home setup and tax doesn't even come into that one.

By all means move but I can't see this working out with your employer at all.
Don't get hopes up or make arrangements without talking to them. And when you do, be very clear and specific about how it will work

As I said - I am trying to level the cost for the company at 0.

duttchey

zweton wrote: »

Yeah thats the thing...whats in it for the employer, especially if they have a "next man up" mentality culture...

Anyway guys - thanks for the feedback. However, I put up this post to see how it might work, not to see if it's good for my boss or not.

zweton

duttchey wrote: »

Anyway guys - thanks for the feedback. However, I put up this post to see how it might work, not to see if it's good for my boss or not.

let us know how you get on

listermint

duttchey wrote: »

Anyway guys - thanks for the feedback. However, I put up this post to see how it might work, not to see if it's good for my boss or not.

It will be interesting to follow along. But I'm very pessimistic of your chances .

The most likely outcome is you seeking new employment should you really wish to make the move. Other companies perhaps solely based there or with dual offices in each region.

It would be highly unlikely for your employer to go for it as even if you cover cost it's added difficulty for one employee and sets precedent that they simply don't want to set.

.let us know how it goes either way. Best of luck .

Granadino

I am in Spain and working for an Irish company. I was semi remote before covid, and have been here the last year. I am not yet registered for tax but do have private health insurance (public system is better from what I have experienced) and have a NIE. Depending on what happens I will have to look at this arrangement in the future as if we stay here, I would like to be in the public system. That would definitely mean changing my work arrangement/status. I know that if I applied for the same type of a job here, I'd be lucky to get one and if I did would be paid way less money.

Wcool

Maybe this thread is not exactly in the right section but it seems closest to a question I have:

What is the maximum period I can work in Spain without any tax consequences for me or my company?

i.e. I'm thinking about working from Spain remotely for 3-6 months of the year but don't want to lose any pension rights/Irish salary.

The websites I searched were very vague and assume that the employer will send you to Spain and apparently that is allowed for 2 years before taxation changes. But I want to be in Spain 3-6 months of the year by my own choice without any chances

Anybody looked into this? I see a lot of contradictory statements and it's of course also interesing what VHI and companies employees insurance state.