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Taxation: China & Spain

Discussion in 'Teaching overseas' started by spanboy, Jun 22, 2018.

  1. spanboy

    spanboy Occasional commenter

    I have my Spanish gestor working on this now, but I thought I would ask if anyone has been in the position of moving from a school in Spain to a school in China in the same Spanish tax year. I understand that I have to pay double tax on my Chinese income for the year because my days in Spain were longer than my days in China and I'm therefore still a Spanish resident.

    Anyone been in this exact same position (i.e. involving Spain and China only?) ... and were there any 'allowances' for having already paid Chinese tax at source?

    I've seen differing views hence why my gestor is looking into it now.

  2. Fer888

    Fer888 Occasional commenter

    I'm not sure I understand. Surely once you move from Spain you are no longer regarded as resident there?

    As far as China tax is concerned this is what I know. If you move to China you will be just taxed on your Chinese income. You will have a Chinese residence permit which your school will arrange for you when you arrive. Worldwide income isn't taxable by the Chinese authorities unless you have been resident in China for 5 years or more. This clock resets if you are out of the country for more than 30 consecutive days (or a higher number if there are gaps between) in a year.
    spanboy likes this.
  3. spanboy

    spanboy Occasional commenter

    Apparently if you are in Spain for more than 183 days in any year (Jan to Dec - i.e. the Spanish tax year) then you are still regarded as a 'resident' of Spain and you must pay tax on all earned income worldwide, even if income from abroad has already been taxed and this has been paid at source. I was in Spain for 209 days last year and therefore fall under 'resident' status. So I believe?!
  4. dumbbells66

    dumbbells66 Lead commenter

    But surely you would have to be paying that tax in Spain, not China. And im wondering how the Spanish authorities are going to collect this....and the Chinese authorities would have to send it to them.....im sure that wont work.
    Also, no expert here, are you sure you are a resident of Spain, or a Brit working in Spain under the freedom of movement that you get from being in the EU? Just a thought.
    spanboy likes this.
  5. spanboy

    spanboy Occasional commenter

    Thanks @dumbbells66 - I believe that anyone who has their primary fiscal interests in Spain for 183 or more days a year is a resident of Spain and is subject to residents taxation. My impression (and please God I hope I'm wrong!) is that I'll be taxed in both China AND Spain on my income earned in China (double taxation). My Chinese tax has already been taxed at source. As I say, I'm waiting to hear from my Spanish gestor...

    ...con dedos cruzados!!
  6. expat2001

    expat2001 New commenter

    I have been following this thread with interest as I am in the same position. I am going back to Spain for a visit next week and may not have time to declare at all as the 2017 campaign finishes at the end of June. There is an 030 tax status form you can fill in when you leave Spain but I believe your observations to be correct spanboy. Can you PM me if you find out anything?
  7. spanboy

    spanboy Occasional commenter

    Yes of course I will - I am just hoping (and praying!) that at least there is some sort of tax relief having already paid so much here in China. Otherwise I feel like I'm here for virtually nothing :(
  8. rouxx

    rouxx Lead commenter

    I am not in the exact same position, but I have financial interests in Spain and used to work in China and it was my understanding from my gestor that there were double taxation laws (as Spain taxes on worldwide income) to prevent you either evading tax or paying double tax. I quickly searched for you and found this which implies the same:

  9. Teachallover

    Teachallover Occasional commenter

    I moved from Spain to China in summer 2014 and I certainly didn’t continue paying tax in Spain after I left. I think what your saying is nonsense. The day I left Spain I was a non resident until the day I returned last year and signed a new housing contract.
  10. blue451

    blue451 Occasional commenter

    The rule is that if you were resident in Spain for more than 183 days in a calendar year then you are considered ficsally resident for the whole of that year and therefore must pay tax on worldwide income in that year.

    Where there is a double tax agreement in place, you can claim the tax paid in the other country against the tax you would pay in Spain. I don't know whether Spain has such an agreement with China.

    The best time to move from Spain is the end of the calendar year - - or at least before the end of June - to avoid such problems :/
    spanboy likes this.
  11. blue451

    blue451 Occasional commenter

    Beware, they can still come to you for the tax due in 2014 and I know of teachers who hae been in this position.
    Not sure if the limit is 5 or 10 years for chasing unpaid taxes/declarations.

    I'd work out what you'd be expected to pay so that, if they come after you, you know whether it's worth fighting or just paying up.

    And if it's any consolation, you're in an elite group along with Messi, Ronaldo and Shakira ;)
    spanboy likes this.
  12. spanboy

    spanboy Occasional commenter

    Thanks @blue451 - This is exactly what I believed to be true, except I didn't know about the double tax agreement and finding out that there IS one between Spain & China (see rouxx's link, above) is a HUGE relief.
  13. spanboy

    spanboy Occasional commenter

    ...and Starbucks, Amazon etc...:)
  14. dumbbells66

    dumbbells66 Lead commenter

    @spanboy do you have any financial commitments in Spain, or do you intend to work there again?
  15. spanboy

    spanboy Occasional commenter

    a house and an apartment (the latter is rented out). The Spanish bit is sorted it's just that we've received differing info from legal people in Spain re: taxation of the Chinese income. Re: working there again - not if I can help it, or the salaries DRASTICALLY improve!
  16. dumbbells66

    dumbbells66 Lead commenter

    Well done on escaping, trust me you wont regret it. I was going to say, if you didnt have any financial commitments to just leave and do nothing, but now its a little more complicated.
    Good luck
  17. rouxx

    rouxx Lead commenter

  18. Satria143

    Satria143 New commenter

    I’m also interested in this as I am leaving Spain this year. I leave Spain before 183 days but have been told today that I am considered a fiscal resident until the end of August as this when my final salary is due. Does anyone know this to be correct? Surely I can leave Spain and take up fiscal residency somewhere else as I am not in the country for 183 days? I don’t mind paying the tax due but definitely don’t want to declare my other income from my new school as it’s way more than what I earn here and I’ll have to pay a lot of tax on it!! Does anyone have any insight on this? In the meantime I’ll try and contact a gestor!
  19. Teachallover

    Teachallover Occasional commenter

    I have already received my tax back from 2017! No mention of me owing money and if I do i’m not paying it. Leaving Spain in 1 week.
  20. rouxx

    rouxx Lead commenter

    My advice to anyone dealing with Spanish tax...get a good gestor. That's their job to sort through the convoluted rules...I seem to pay a small fortune for mine, but in my view worth it as she knows her way around the expat/resident/non resident stuff...they have some very odd rules over there.

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