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Question Optimize Tax Burden (Spain) Partially Self-Employed

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savewhatyouhave

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Dec 20, 2022
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#1
Hey folks,
I currently live in Spain and work remotely for a US company with my compensation around $100k/yr.
With this income I'd have to pay approximately 40-45% as taxes which is too much but I'd still would like to have an "official" source of income.
So I'm thinking about becoming a self-employed and receiving let's say $30k/yr into my self-eployed bank account to pay 25%-30% taxes only from this amount. The rest $70k/yr I'd be receiving into EMIs. My company is fine splitting my paycheck into as many separate payments as needed. Any thoughts? Thank you!
 
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#2
savewhatyouhave said:
Hey folks,
I currently live in Spain and work remotely for a US company with my compensation around $100k/yr.
With this income I'd have to pay approximately 40-45% as taxes which is too much but I'd still would like to have an "official" source of income.
So I'm thinking about becoming a self-employed and receiving let's say $30k/yr into my self-eployed bank account to pay 25%-30% taxes only from this amount. The rest $70k/yr I'd be receiving into EMIs. My company is fine splitting my paycheck into as many separate payments as needed. Any thoughts? Thank you!
Click to expand...
are you serious? you think that 70% paid to EMI will just disappear?
 
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#4
savewhatyouhave said:
No, but EMIs not banks so they don't report your income to local tax authorities?
Click to expand...
maybe they don't, maybe they do, most likely they will... - the point is your tax burden will not vanish and your liability will be there if not forever then for years - I don't think you want to live with that... do you?

search the forum and you'll learn about your options...
 
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#5
void said:
maybe they don't, maybe they do, most likely they will... - the point is your tax burden will not vanish and your liability will be there if not forever then for years - I don't think you want to live with that... do you?

search the forum and you'll learn about your options...
Click to expand...
I appreciate your reply. I understand that Spain is a nightmare for self-employed folks and the best would be for me to relocate to a more "tax friendly" country but this isn't an option at this moment. $100k/year also isn't the kind of income that allows very sophisticated tax optimization schemes.
Unless I missed something else?
 
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#6
savewhatyouhave said:
I appreciate your reply. I understand that Spain is a nightmare for self-employed folks and the best would be for me to relocate to a more "tax friendly" country but this isn't an option at this moment. $100k/year also isn't the kind of income that allows very sophisticated tax optimization schemes.
Unless I missed something else?
Click to expand...
there are bigger experts here but you have basically three rational options in my opinion:
- pay taxes
- relocate
- don't have income (that leads to you)
 
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#7
savewhatyouhave said:
Any thoughts?
Click to expand...
Don't live in Spain if you don't want to pay Spanish taxes.

The Spanish tax authority is a bureaucratic mess and things slip through the cracks. But if they catch wind of you, they are very aggressive and won't back down.

savewhatyouhave said:
No, but EMIs not banks so they don't report your income to local tax authorities?
Click to expand...
EMIs are not exempt from reporting obligations. There is nothing about CRS/AEOI that excludes EMIs. They've just been a little slow to implement it and haven't been a regulatory priority.

Secrecy is an outdated concept.
 
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#10
Enomad said:
Where are you from ? If not from Spain you could apply for Beckham Law below some advantages:

- pay a flat fee of 24% only on the incomes they obtain in Spain instead of a progressive tax on their worldwide incomes (19-45%)
- no tax on foreign income
Click to expand...
Beckham law has nothing to do with citizenship. In addition, you have to move to Spain for the job and must not have been a tax resident in Spain for 10 years beforehand. Some changes are planned ( startup law ) , but moving to Spain is elementary. So probably not an option in this case.
 
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#11
savewhatyouhave said:
Hey folks,
I currently live in Spain and work remotely for a US company with my compensation around $100k/yr.
With this income I'd have to pay approximately 40-45% as taxes which is too much but I'd still would like to have an "official" source of income.
So I'm thinking about becoming a self-employed and receiving let's say $30k/yr into my self-eployed bank account to pay 25%-30% taxes only from this amount. The rest $70k/yr I'd be receiving into EMIs. My company is fine splitting my paycheck into as many separate payments as needed. Any thoughts? Thank you!
Click to expand...
This has an easy solution- get hold of a person with seychelles ibc and get paid there- then you can take the money out from them in the form of Crypto.Get the crypto converted in Spain in Small amounts for living expenses.
 
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#12
tolstoy said:
This has an easy solution- get hold of a person with seychelles ibc and get paid there- then you can take the money out from them in the form of Crypto.Get the crypto converted in Spain in Small amounts for living expenses.
Click to expand...
That would work as long as you can explain where the money comes from if anyone is asking!?
 
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#13
James Spader said:
That would work as long as you can explain where the money comes from if anyone is asking!?
Click to expand...
Well the seychelles ibc could also issue payments as consulting
James Spader said:
That would work as long as you can explain where the money comes from if anyone is asking!?
Click to expand...
It could be negotiated with the seychelles ibc to provide contracts for consulting fee also when required.
 
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#14
Enomad said:
Where are you from ? If not from Spain you could apply for Beckham Law below some advantages:

- pay a flat fee of 24% only on the incomes they obtain in Spain instead of a progressive tax on their worldwide incomes (19-45%)
- no tax on foreign income
Click to expand...
I don't qualify for Beckham Law because I already live in Spain. And I mentioned this isn't a Spanish company. I have a consulting agreement with the company so I'd have to become a self-employed and being self-employed is another point to be disqualified from Beckham's law.

What about receiving a portion of my salary in crypto (let's assume the company is okay sending USDC into a cold wallet) and use crypto.com card or ledger card for my daily expenses? And the other portion would be taxable as self-employed.
 
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#15
savewhatyouhave said:
I don't qualify for Beckham Law because I already live in Spain. And I mentioned this isn't a Spanish company. I have a consulting agreement with the company so I'd have to become a self-employed and being self-employed is another point to be disqualified from Beckham's law.

What about receiving a portion of my salary in crypto (let's assume the company is okay sending USDC into a cold wallet) and use crypto.com card or ledger card for my daily expenses? And the other portion would be taxable as self-employed.
Click to expand...
For 15% the seychelles solution would work fantastically- you could have the agreement transferred to the seychelles ibc and take payouts from them in your crypto wallet.No need to pay any taxes or rather pay at the lowest slab if you like to.
 
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#16
tolstoy said:
For 15% the seychelles solution would work fantastically- you could have the agreement transferred to the seychelles ibc and take payouts from them in your crypto wallet.No need to pay any taxes or rather pay at the lowest slab.
Click to expand...
Right. But what if I want to buy a car or a house in Spain? I see how this might work for day-to-day expenses but what about bigger expenses?
 
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#19
tolstoy said:
Well the seychelles ibc could also issue payments as consulting

It could be negotiated with the seychelles ibc to provide contracts for consulting fee also when required.
Click to expand...
from what I understand, the Spanish tax agency will get a heart attack when they see only consulting invoices coming from a tax haven. This can work if you have, let's say, 10 invoices per month and only 1 comes from a tax haven, but if 1 out of 1 comes from a tax haven, you are looking for trouble
 
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#20
ecool said:
from what I understand, the Spanish tax agency will get a heart attack when they see only consulting invoices coming from a tax haven. This can work if you have, let's say, 10 invoices per month and only 1 comes from a tax haven, but if 1 out of 1 comes from a tax haven, you are looking for trouble
Click to expand...
Why cant a legitimate business in Seychelles hire a Spanish Consultant could you care to explain? Payment to the consultant will be in crypto.
 
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