Working offshore? This is how is taxable your income in Spain.

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Working offshore? This is how is taxable your income in Spain.

La vida pirata, la vida mejor… As we say in Spain, living life to the fullest: From Port to Port, an Amazing Overseas Experience. Jokes aside, it is well-known that there are no countries or strict regulations on the high seas. However, this doesn’t exempt you from paying taxes. If you work on a cruise ship, a vessel, or an oil platform, here’s what you need to know to fulfill your tax obligations.

Where am I tax resident?

The main rule for being a Spanish tax resident is residing in Spain for more than 183 days. It’s important to be aware that even sporadic absences are considered as if you were in Spain. The Dirección General de Tributos (DGT) confirms that even if you work outside the country for more than 6 months, you will still be considered a Spanish tax resident unless you provide a tax certificate proving your tax residency in another country.

Another crucial point to consider is that if your partner and child are living in Spain while you are residing outside the country, there is no room for debate – you are automatically considered a Spanish tax resident in that situation. Therefore, it is highly probable that you will be classified as a Spanish tax resident.

How does the income tax work?

The situation for expatriates is no different from the rest of the Spanish population. For more detailed information, you can refer to our article on income tax.

Your primary concern here lies in the location of your employer’s base, as it determines whether you can potentially apply for the double taxation treaty or not. The country where your employing company is established holds precedence, regardless of your physical presence in that country. Often, these companies are situated in tax havens to reduce their tax burden. If this is the case for you, unfortunately, you won’t be eligible to apply for the double taxation treaty or any exemption.

Is there is any exemption for working overseas?

The Tax Agency states that if you are a Spanish tax resident and your annual earnings are below €60,100, you are not required to pay taxes in Spain until you reach that limit. However, certain conditions must be met, including:

  • You must be employed by a company that is based outside Spain.
  • The country where the company is located should charge a similar income tax and not be considered a tax haven.
  • You, as the employee, must physically leave Spain to carry out your work.

If you fulfill these requirements, you are eligible to claim this exemption, which means you will only be liable to pay taxes in the country where your employing company is based.

Double taxation treaty?

Let’s consider a scenario where you cannot qualify for the previous exemption, or you do, but your earnings exceed €60,100. In this situation, it becomes essential to refer to the double taxation treaty between the countries involved. In general, most countries follow a similar pattern. If you spend more than 183 days in Spain, Spain can claim taxes on your income, but you can apply for the double taxation treaty benefits in your tax return.

As you can see, the options vary depending on each individual case. Our recommendation is to seek a tax consultation with our tax expert, Rafael, who will assist you in clarifying all your questions and providing you with peace of mind.

10 Comments

  • Ewa Lubienski

    Hi there, I have recently become a resident in Spain. I work offshore and only spend 6 months a year in Spain or less. I am not liable to pay tax for 60 000 or less euros. Do I still have to file every year? I am applying for a mortgage and they want to see a tax return so I am struggling to get a document, can you help in any way please..

    • Nicola Ryan

      Thank you for your enquiry Ewa,

      This was also received via email. We have answered via email.

      Nicola

  • Anonymous

    If I am engaged by a Gibraltar company on a self employed basis and work offshore on a yacht how would this work? I have Spanish residency, I will be out of the country from more than 11 months. I have other income streams that I already declare to the Hacienda and will continue to.

    • Tracie Miles

      Good morning, this is something that you would need to speak to a Tax Adviser about. We can help you with this, and my colleague can make a zoom call with you. Our consulation fee is 50.00€ plus IVA. If you wish to go ahead, please let us know and we can make an appointment for you. Thankyou, wait to hear from you.

  • Sean Burnip

    Hi I would like to move to Spain long term, I work offshore so I would be out the country for at least 6 months of the year. I am going to be renting my uk property out and long term renting a property in Spain. I would be moving with my partner and 3 kids. I’m just wondering about what income tax I would be liable to pay. I’m also wondering what visa would be best for me to apply for.

    • Nicola Ryan

      Thank you for your enquiry Sean,

      If you are a UK passport holder, the only way to gain residencia is via a visa. This would need to be obtained at your local Spanish Consulate before arriving in Spain. The visa would then be converted to a TIE card. You will have 6 months from the date on your TIE to apply for your Spanish driving licence exchange.

      In regards to taxes in Spain, when you are a resident, and your family is located in Spain, this will make you tax liable. Rafa our fiscal advisor can offer a tax consultation to allow you to understand this and your tax liabilities before applying for the visa/residencia. Would this be something you would be interested in?

      Nicola

  • Kris

    Hello. I am about to move from Poland to Spain and become a resident, where all my life interest will be based, incuding taxes. That include my wife and kid. I am the only one working. There is no income in Poland. My wife and kid will be living in Spain, but not working. Perhaps in the future my wife could have work in Spain, but not now.
    I have a few possible scenarios I would like to ask:
    1. I will work offshore more then 183 days and earn 70 000 euro per year. How much tax I will have to pay in Spain?
    2. I will work offshore less then 183 days and earn 70 000 euro per year. How much tax I will have to pay in Spain?
    3. I will work offshore more then 183 days and earn 60 000 euro per year. Here I believe there will be no tax as per article. This of course will be properly documented.
    My contract is signed with company based in Singapore and my income (wages) to the bank account is coming from Singapore in USD.
    As per checking, the Republic of Singapore is no longer considered a paradise fiscal from 2014.
    I would be very gratefull for any answer.

    • Nicola Ryan

      Afternoon Kris,

      We would recommend a tax consultation with Rafa, our fiscal advisor. We will contact you directly to discuss this matter further.

      Nicola

  • Kris

    Hello. I did ask for the inquiry yesterday but so far nobody answered me yet.
    I would appreciate the response.

    • Nicola Ryan

      Morning Kris,

      We answered this morning. We do not work over the weekend. You will see your reply via email.

      Nicola

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