Spanish companies performing activities abroad (for example: constructions, technical installations, professional works on-site ...) that imply posting of its own workers to that country, should thoroughly consider several aspects. The same scenario applies from the point of view of the worker himself. But also to self-employed professionals, or anyone else having a job-offer from abroad and considering acceptance of that proposal.
We always recommend to record all issues in writing. This may offer a clear view when it comes to take decisions. Moreover, it may be useful for future argues, in the event of possible tax or labour inspections.
Company with jobs abroad
Procedures for companies performing abroad activities will very much depend on the destination country. Also on the type of activity. The tax and/or labour authorities in that country may require certain documents to secure an accurate compliance, besides fulfilment of additional issues regarding salary and general working conditions.
In addition to this, the company's employees may take profit of special regimes. These regimes may result advantageous in terms of personal income tax and which oblige the company to consider certain special features when preparing payrolls and labour documents.
Abroad Worker
Tax problems use to raise when a worker moves to foreign countries for executing labour; this applies to those cases when displacement is for a few months in a given year, or whenever anyone is being hired for working abroad.
We need to evaluate different questions, depending on each case:
Taxation:
- What income taxes are payable in each country. Featuring the fiscal residence is compulsory. You may be considered as a fiscal resident in Spain, but also in the other country. Depending on this, the Authorities may strive for several tax scenarios:
- If income tax in Spain is payable, is there a possibility to apply for a special advantageous regulation (such as Art. 7p or excess of the Spanish Law of exemption on income taxes)?
Labour issues:
- Depending on location of activity, whether the posting is within or outside the European Union, the regulation is different; the application of bilateral agreements for maintenance of Spanish social security legislation varies, as well.
- Duration of the posting and the country of destination are decisive, too; procedures with the different administrations and compliance of working conditions in the country of destination for the posted workers must be taken into account.
The “a priori” protocol in these situations is crucial to help taking decisions. It is also important for demonstrating good faith in case of possible revisions or verifications undertaken by Administrations. Establishing specific rules for each case by an expertise, such as filing of documents, steps to be followed and the supports that leaded to a specific decision, can save many headaches and/or money, at a later date.
If you face any of these circumstances, please do not hesitate to contact us!
At Carrillo Asesores we will be delighted to fix a protocol that will adjust accurately to the needs of each specific case.
