Humour · Spain

Taxis or Taxes

Two different words that sound alike when spoken, but have different meanings to figure out. In this particular scenario it´s basically nothing or something.

One of these words has disappeared from our totally screwed up reality, and the other still hangs around like a smelly cat waiting to pounce.

  • Taxis don´t exist anymore.
  • Taxes DO.

Unfortunately the Spanish taxman loves paperwork problems. Fines are just fine by him. Taxes are just taxes, shut up and pay up is the policy.

Note, the following does not mean a resident has to pay tax in two countries. That´s a myth, it´s just the one, SPAIN.

So being as our personal company pension is taxed at source, the British taxman puts it in his pocket, then has to reluctantly pass it back, direct to our pocket. Meanwhile we pay over three times as much here! But never mind, it also pays for us to be legal and free of uncertainty.

However, we have one minor problem going on, and on, and on. See below for a professional diagram of how it´s supposed to work:

Spanish taxman takes his slice ———> Brit taxman takes his slice ———> then sends it back to our bank account.

See below for professional diagram of how it works for us:

Spanish taxman takes his slice ———> Brit taxman takes his slice ———>

Spot the difference.

It means we´ve been paying double tax for yonks, and the Brit taxman owes us A LOT. Over the years our solicitor has sent forms, emails, and made many phone calls. As back up so have we, but there´s always some stupid excuse, first one being “it´ll take 3 months to process.” So we always give them some leeway of 6 months and off we go again.

  • I remember waiting one year for “the forms have gone missing”
  • Re-submission, “they must´ve gone to the wrong place”
  • Re-submission, “not been processed yet”
  • Re-submission, “assessment not been done yet”
  • Then after all that, Covid is a convenient excuse for “we´re all working from home now, so there could be some delays”

DELAYS?????

Oh so sorry, wouldn´t want to get in the way of whatever you´re binge watching at the mo. God forbid us interrupting John and Janet the tax dodgers on a deserted island, well they thought it was till Bigfoot turned up with the bill.

So here’s the reality check, how we discovered residency leads to automatic fiscal residency after 6 months.    

As residents we´d heard about fiscal residency, but were told by (some) people we knew, it was optional. People who`ve lived here for many years still paying tax in their own country, not Spain. We´ve since discovered that whether it`s known about or not, some may be aware of the perks, the carrot at the end of a stick, they pay less tax on income in their country of origin than here.

So hey those snotty emails from our solicitor were wrong, right? It took us a year to realise general tax gossip was an illegal workaround to avoid. Being unsure is never a good thing, so we booked an appointment with our accountant to put the nagging emails to bed. But oops, we weren´t prepared for the truth, being (unknowing) fiscal residents is not a choice, it´s automatic after six months. Bummer, we owed a year´s tax here, and tax back from the UK never received as yet.

Imagine how many residents there are, who either have no idea (like us initially) OR know all about it but prefer to take the risk cos it Costa lots.

For those who consider themselves immune, there´s a bigger picture. The Spanish Authorities are cracking down on residents who cheat the system. Just imagine having lived here for years without paying tax, then suddenly being discovered. The Cost? Tax going back to 6 months after residency, plus HUGE fines. Oh my god, I´m so glad we asked questions at the solicitors early on.

We still had to pay some back tax and a fine, but rather be safe than sorry eh?

Ah well, good luck to John and Janet, their island might be fiscal free with romantic sunsets just like we have. (Here, last night).

IMG_20190721_213948_324

But Bigfoot is awaiting.

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