Britain has a double taxation agreement with Spain, to ensure people do not pay tax on the same income in both countries. However, taxation is a complex issue, and advice should be sought.
The Spanish Finance Ministry publishes a book in English called ‘Taxation Regulations for Foreigners’. Further info: www.aeat.es.
Residents, including retired people, are liable to pay tax on income earned in Spain or from property held in Spain. This includes Property or Real Estate Tax, Wealth and Capital Gains Tax, VAT (IVA), Inheritance Tax, and local municipal charges.
There are various professional tax and financial advisors in Spain that you may need. They come under different names Gestor, Contable or Asesor Fiscal.
Gestor (Book keeper and form filler)
The Gestor is a professional dedicated principally to helping with Spanish Bureaucracy. Gestors are professionals and also belong to a Colegio.
The Gestor originates from the days when illiteracy in Spain was very high and the bureaucracy was complicated and accountants and lawyers were out of reach to the general populace as their costs were so high. Luckily there are now many English speaking Gestors in Spain on hand to help.
A gestor will help you apply for your Residencia, a Spanish driving license or complete your annual income tax return. If you are setting up a new business as self-employed or as a limited company you will definitely need to employ one as there are numerous services he can help you with.
Please note, for an E.U. national, it is no longer required that you obtain ‘residencia’ even if you are living here permanently. There may be tax advantages or necessities, but no legal requirement.
For a moderate fee, a Gestor can save you hours of legwork. He will know which forms to get, how to fill them in and give you basic advice. At the tax office he will save time by knowing which queue to stand in and will probably deal with the paperwork of several clients at a time. When there is a problem he will know the best way to approach the civil servants to sort it out.
Although a Gestor will advise you on what you can claim and what you should not claim when completing any income or allowance sections of a form, remember it is you who signs the form at the end of the day and you are responsible for your own declaration.
But be aware that a Gestor is not a Lawyer or a Tax Consultant and in certain specialist areas, it may be necessary to seek the advice of these more qualified professionals.
You might consider employing a Contable when you first arrive in Spain and it comes to completing your annual income tax return.
Accountants are not difficult to locate in Spain. Both qualified Spanish and foreign accountants provide services in many languages. They are also called Asesor Fiscal.
Most businesses would retain an Asesor Fiscal on a monthly bases to complete all the statutory declarations, pay taxes, pay social security, complete all necessary procedures with INEM (Instituto Nacional de Empleo) when employing and dismissing staff.
Some accountants are also known as ‘Econoministas’ and will carry out business analyses as well. These tend to be the exception to the rule and it is not so straightforward to obtain the services of a proactive finance director to help with budgets or cash flow forecasting.
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