US LLC + Spain

[Evi]

Hi!

Is it a good idea to have an LLC for someone who is living in Spain and providing only the digital services?
The clients are mostly in Spain as well.
There is no intention to hide it, so all the income would be reported in the annual tax declaration. However in this case no social security payments would apply.
How risky do you think it is? Will tax authorities of Spain be ok with it? Or it is better to do it only in case of international clients?

 

[latindev]

I don't know if is a good or bad idea... But I know is always a bad idea to try to do something in Spain

 

[Evi]

yes, I agree but while with the international clients I think it should not cause troubles. I have doubts what if the clients as well are in Spain? Could not find any official clarification. All the articles are just trying to sell the LLCs without mentioning the risks.

 

[Marzio]

No social security payments would apply

Will tax authorities of Spain be ok with it?

Are you joking?

You are working in Spain for Spanish customers and you think it's ok to not pay social security because you are working through a US LLC?

Either open an autonomo or a S.L. if you work within Spain

 

[latindev]

All the articles are just trying to sell the LLCs without mentioning the risks.

I'll be honest with you, don't learn about offshore (and actually any other topic) from places where they offer your the service because there is a high incentive on the other side to just hide the "deal breakers". Spain is one of the worst tax hells in the world (if not the worst) so I highly suggest you to stick to local options (hire an accountant who is an expert in local taxes) unless you have enough money to create real presence outside of Spain (or even better: When you move out from Spain)

 

[saintjohnny]

If you live in Spain, you pay taxes in Spain through the correct means. Anything else is a crime called tax evasion.

If you don't want to pay taxes in Spain, you simply move elsewhere and cut ALL ties with Spain. You close your bank account, you cancel your phone, your gym membership, you sell your home and you don't visit for more than a few weeks each year to be on the safe side (up to you how much you want to risk it).

As simple as that.

 

[Evi]

And what do you think if the customers are international? In this case US LLS would be an option, correct? As I could not find any official position of tax authorities on this issue.

 

[Sols]

And what do you think if the customers are international? In this case US LLS would be an option, correct? As I could not find any official position of tax authorities on this issue.

That's because location of customers does not matter in Spain. International or local — irrelevant. It's all considered taxable income in Spain.

 

[Marzio]

I could not find any official position of tax authorities on this issue

What you are trying to attempt is so dumb that there's no need for an official position for social security tax evasion.

 

[nyanyanya]

Hey! I will try to help you.
Use the translator please:

Artículo 8.1 de la Ley del Impuesto sobre Sociedades (LIS)
Se considerarán residentes en territorio español las entidades en las que concurra alguno de los siguientes requisitos:
a)Que se hubieran constituido conforme a las leyes españolas.
b)Que tengan su domicilio social en territorio español.
c)Que tengan su sede de dirección efectiva en territorio español.

No matter what you do. If you have your current location in Spain (+183 days per year or/and registered as a resident) you cannot escape the hell only using one LLC.

 

[wonderfulboy]

And what do you think if the customers are international? In this case US LLS would be an option, correct? As I could not find any official position of tax authorities on this issue.

You better consider to relocate if you want to avoid taxes and social security etc.