Originally developed in the software and telecommunications sectors, teleworking now takes place across industries. For many employees, this creates the opportunity to fulfill a dream that was previously unattainable: live in Spain and work for a company in your home country or another.
This possibility of a cross-border employee relationship, consists in maintaining the employment relationship, with the employee doing the work for a non-Spanish company from your Spanish place of residence. It should be noted that with this option, no branch is established and, due to the remote work, no work center in Spain has to be registered.
To ensure that there are no legal problems with regard to taxation, working conditions and social security, the following aspects must be observed in cross-border working relationships:
With regard to taxation, most of the double taxation agreements based on the OECD model, including EU countries-Spanish, provide the basis for taxation of residence. In this regard, Article 14 on income from employment states:
“Subject to articles 15, 17 and 18, salaries, wages and similar allowances received by a resident of a Contracting State in employment may only be taxed in that State, unless the work is carried out in the other Contracting State. If you work there, the remuneration received for it can be taxed in the other country. ”
Excepted from the following rules are civil servants’ salaries, supervisory board and administrative board remuneration as well as pensions and pensions from your country.
In this regard, there can be basically two situations, where both the habitual residence of the employee and the place where the work is carried out are decisive:
The work is always carried out where the employee is physically. If the work is provided exclusively from home via the Internet or telephone, this can only be taxed in the country of residence, but not in the country of the employer’s registered office. So if you live in Spain and work from home for, for example, a German company (via the Internet or by telephone), your income is only taxable in Spain. In this case, your employer does not have to pay wage tax in Germany, but in Spain if necessary, for which it is necessary to register as an employer with the Spanish tax office.
If part of the work is actually carried out on site in Germany (example: 3 weeks home office in Spain and one week per month at the permanent establishment in Germany), the work performed in Germany can be taxed in Germany. This income would be tax-free in Spain up to a maximum of € 60,000 per year.
If you live in Spain but do a significant part of your work in another country, your income is still only taxable in Spain if you work in that other country for less than 183 days a year, your employer is based in that other country and you still reside in Spain. If the conditions listed in Article 12 (2) are not met, your income may be taxable partly in that country and partly in Spain.