Modify Visa Type? Non-Lucrative >> ??

Just glancing through your post I am pleased to see you would like to make spain your new hone.   

I hope you are not  annoyed that I suggest, as you wish to enjoy our country and make your hone, that you might respect our home and consider paying you due taxes here rather than asking us how you might evade doing so

As you americans say, have a good day

curious to see what comes back
My nonlucrative is up for renewal end of Apr...because of family emer. I spent most of last yr in the States..now I'm biting my nails wondering if my Visa will be renewed. 
Not retired.... commuting to work in US

Dear Johncar,

Thanks for your reply. I had thought I'd communicated it clearly, but I see that I did not, that I am trying to comply with "all the different rules in play" here: I think/thought I understood that I *should pay taxes in the USA rather than in Spain.

What I'm saying is that it looks *illegal* for me to pay income taxes in Spain, since I'll enter with the non-lucrative visa; are you telling me that that is not the case? If so, how do I "do it" (since I don't have the right to work, and hence don't have the right to earn income?)  If you can give me some pointers on *how* I can "pay the due taxes to this beautiful country" I want to do that: please tell me *how*.

If I can't do it with the non-lucrative visa - as I wrote - I'd like to change to another type of work-permitting visa during the renewal process (i.e., one that *does allow me to generate an income and *to pay taxes on it*.) I'm looking for advice on *how to do that.*

If you can give me any advice, I'd very much appreciate it. If not, well, as the English say, I believe, thanks very much.

Dear Baldchick,

Good wishes as you sweat out these final months! You write that you're commuting to work in the US. Are you getting on planes all the time ... or are you telecommuting? Either way, how are you dealing with taxes? I've learned more in the past few days, and I *think* I understand (finally: you can see that I'm learning as I go along!) that if you spend 183+ days on Spanish soil, then you're a Spanish tax resident and owe taxes to Spain (rather than to the USA), regardless of where the source of your income is. (I hadn't understood this is my first reading of things, but now I do.) If you have the non-lucrative visa, is it "allowed" to report to taxes to Spain? That's my big quandary. It seems to me that it violates the terms of the non-lucrative visa. (So in satisfying one regulation, we'd have to breach another.)

I'd be grateful to hear more of your experience! Thanks!

Hi Lashend,

Hmm, that's a predicament.

While I don't know personally what to do, I would suggest you hire a Spanish lawyer for this case. I have a sister of my friend who is doing something very similar: she is working for an advertising company from the US while living in Barcelona. She hired a Spanish lawyer to help her understand the different nuances of the law and they were able to get her a visa that allows her to work remotely in Spain and acquire residency rights (her long-term goal is Spanish citizenship as well). From what I understand, there was a way to get a residence visa with a TIE that allows her to work in Spain from a foreign employer. I do know that she worked with a lawyer and I do know she is allowed to live/pay taxes in Spain so her tax home is considered Spain.

Lawyers' fees can vary a lot in Spain, but do make sure you are working with a lawyer with experience in immigration (preferably only immigration because then they are more aware of the laws versus those who do some immigration work).

Best of luck!

Am I missing something? A non lucrative visa is just that a visa where you do not earn money.
This linkquite clearly states

Foreigners subject to the requirement of this visa
All foreign nationals who wish to stay in Spain for more than ninety days per semester, without undertaking any type of work or professional  activity  must  be  in  possession  of  this  type  of  visa,  unless  they  are  citizens  of  the  European  Union,  Iceland, 
Liechtenstein, Norway or Switzerland.

The example is from the Spanish embassy in Canada, but the same information is on the US one too.
1st Renewal of Non Lucrative Visa Spain
At the end of 1 year in Spain, you may apply to renew your temporary Spanish Resident Card.  This has to be done at least 60 days before expiration and up to 90 days after. That is 3 months to obtain your new paperwork. But you only receive that if you have been good    Your new Tarjeta Identidad Extranjero will be valid for a further 2 years.
Having seen one of these visas the information is at the bottom. Or have the design been changed??

Thank you, Truth489! I think you've hit the nail on the head. In fact, in the last couple of days, I've touched base with a few immigration lawyers about just this.

I wonder if you wouldn't mind putting me in touch with your sister (and / or her lawyer). (It's always good to get a recommendation ...). If you'd be comfortable with that, would you mind sending me a private message?

(But I wanted to say here "out loud": thank you and I think you've given good advice!)

Dear Ribeira Sacra,

I've read exactly the same thing you have, but do you see the difficulty/inconsistency between the fiscal and immigration requirements in play? The Consulates/Extranjeria authorize people to enter Spain with the non-lucrative residency visa if they are not working *in Spain*, including some (many) who either work for a foreign company (as Truth describes, below) or who work remotely doing whatever it is that they do (a decent google search will show you a good few in number ...). But the fiscal laws prescribe that *everyone* working on Spanish soil, it doesn't matter for whom or where their bank accounts or clients or anything else are or anything else, are working *in Spain*. In other words, all the people authorized under the non-lucrative visa who present themselves as having sufficient income on the basis of "overseas" work are suddenly working not "overseas" but "in Spain" ... and hence in violation of the immigration standard associated with the very same visa.

I'm pointing this out because I want to make it clear that I'm not trying to skirt around the rules or try to scam anyone; I'm trying to make two sets of contradicting rules square. And while I'm grateful to everyone who is helping me to try to "figure it out," I'm not so grateful to those who are jumping on me with accusations of ill will and fiscal deviousness. (Frankly, I'm not fiscally competent enough to be devious - something that's probably obvious by now as I try to "figure this out" ... )

lashend wrote:

Dear Ribeira Sacra,

I've read exactly the same thing you have, but do you see the difficulty/inconsistency between the fiscal and immigration requirements in play? The Consulates/Extranjeria authorize people to enter Spain with the non-lucrative residency visa if they are not working *in Spain*, including some (many) who either work for a foreign company (as Truth describes, below) or who work remotely doing whatever it is that they do (a decent google search will show you a good few in number ...). But the fiscal laws prescribe that *everyone* working on Spanish soil, it doesn't matter for whom or where their bank accounts or clients or anything else are or anything else, are working *in Spain*. In other words, all the people authorized under the non-lucrative visa who present themselves as having sufficient income on the basis of "overseas" work are suddenly working not "overseas" but "in Spain" ... and hence in violation of the immigration standard associated with the very same visa.

I'm pointing this out because I want to make it clear that I'm not trying to skirt around the rules or try to scam anyone; I'm trying to make two sets of contradicting rules square. And while I'm grateful to everyone who is helping me to try to "figure it out," I'm not so grateful to those who are jumping on me with accusations of ill will and fiscal deviousness. (Frankly, I'm not fiscally competent enough to be devious - something that's probably obvious by now as I try to "figure this out" ... )

thank you for the response. Have you  link to that information?
I still have some difficulty in this subject. If you live in Spain you have to declare to the tax office your world wide income for that tax year. You need a bank account to live in Spain to pay things like utilities council taxes rent, Plus day to day living. So you must have a fiscal number.
I am not accusing anyone of anything. I am just too curious for my own good. Even as A European who has a so called easy access and rights to live and work in Spain the system can be such a minefield. With one person behind a desk saying one thing and another saying something else.

This is an area where there is much confusion, because there are any number of people who have entered on a non-lucractive (NL) visa but are still working remotely as the way of providing themselves income.

The problem is that the laws have not kept up with the reality. The intent of the law is quite clear- don't take a job away from a Spaniard/EU citizen. This is perfectly reasonable.

But the application is poor. If you're living in Spain, working remotely for a Chinese company teaching English to students in China, and getting paid in US dollars into a US bank account, are you remotely close to violating the *intent* of the law?  Of course not.

(Note that right now, we're just talking about the immigration and work visa laws- we haven't even started on tax law yet.)

The way I've always heard it presented by people who are actually *doing* it is that if they're working remotely and applied for a NL visa, if they said they had a company that paid them money (as opposed to presenting it as "I am an employee") then it doesn't appear that they are "working" in Spain (ie, taking a job that a Spaniard could have had).

On top of that comes the taxation question. As a general rule, under the US/Spain tax treaty, you pay your taxes first in the nation where the income came in. Well, in this case, again the laws do not keep up with the times, because the money itself never really gets to Spain; it's paid from China to the US bank account. You'd pay your taxes in the US first, then file Spanish taxes and under the US/Spain treaty you'd pay Spain any remaining difference.

For suggestions on how to fix this, since you've plainly run afoul, I'd say that your best bet would probably be to either see if they can understand that you're not violating the intent of the NL visa to begin with (ie, present it to Spain as though you're a company owner receiving passive income, not "performing work" in Spain) OR to get your visa modified to allow for work.

Your best bet is probably the latter, at this point, and you need legal help from people who have done it.  One firm that does a lot of US-to-Spain immigration/visa work is Sterna Abogados; google them and you'll find them.

Good luck. This is really a sticky area because you're not intending to be a bad citizen of either nation; you're just stuck in limbo between old laws and the new reality of the world and how work can be performed.

Great reply, PapaLima. I think you're right on.

I've spoken with a few Immigration lawyers in the past week, and they more or less reinforce what you say: something like "Well, the problem is, the different agencies really aren't talking to each, really aren't operating on the same terms."

What I've settled on at this point - precise "plan deployment" to be developed as I find my way along, I guess - is that I'm going to:
1. Go live in Spain. Sit at my computer doing work work remotely for foreign clients.
2. This first year, ** since I cannot register as self-employed in Spain with having the prior visa/residency authorization to work ***, I won't pay income taxes to Spain. I will pay them to the USA instead.
3. At the 1-year renewal, I'm going to either ask a company/university to hire me and convert my NL visa to a residencia y trabajo por cuenta ajena type; or present my business plan and evidence that it's feasible (i.e. that I'm basically doing it now only - what a shame - constrained to pay my taxes to the USA since I have the NL visa only), and convert my NL visa to a residencia y trabajo por cuenta propia.

And, yes, I think an immigration lawyer by my side will be a good idea in this case. It does seem like I'm / we're treading in uncertain grounds - uncertain because made uncertain by the tendentially contradicting immigration and tax laws. On that note, thanks for the rec regarding Sterna; I'll touch base with them. I had a great conversation with Mariana Solla at Zimmer Abogados; that might be another good option for others who are looking.

Thank you again, everyone, for chiming in. ANd if others have some experiences here, now or later, please chime in too. At the end of the day, I guess we'll figure out what does and doesn't work in the first person ... I'll be sure to come back and post my "definite answer" a year from now. I hope everyone else in the figuring-it-out stage will do the same! Thank you all again.

Sorry but point two is not valid.
Perhaps read this?
I quote

If you are living in excess of 183 days per year in Spain you are automatically considered resident in Spain and you become liable to pay Income Tax in Spain on your worldwide assets.

I agree the information is write for the Brits who wish to live in Spain but rules are rules. The taxation is the same no matter where you are from.

Thanks, RibeiraSacra …

So: Would I just go to the AEAT (or, as I'd do, its website - I already have the certificado digital to pay property taxes) and now file the IPRF? Even though I don't have either a trabajo por cuenta propia or trabajo por cuenta ajena permit? How do I declare that income …and not violate the not-working terms of the non-lucrative visa?

If you can help me figure out this "how to do it" … obviously this (paying income taxes to Spain) is the right thing to do and what I want to be doing. But it's the "how" that makes me stop and scratch my head. Could you help me answer that? I'd be sincerely grateful - Thank you!

Either consult one or head for the tax office.
All I can say is I have to pay taxes on my world wide income. I would image you do too as I cannot see any get out clause.
I am sorry to say I am not a gestoria and I do not think anyone else is on the forum. Plus if you did receive an answer to this complicated question here then I doubt if any disagreement with the tax office at a later date would take our answers as having any standing. 

RibeiraSacra wrote:

I agree the information is write for the Brits who wish to live in Spain but rules are rules. The taxation is the same no matter where you are from.

I beg to differ. There is a specific US/Spain tax treaty that controls how taxes are divided between the two nations when someone winds up owing (or potentially owing) tax to both of them.

For example, if someone owns a business in the US and receives income from it, but lives in Spain more than 183 days a year, they might wind up owing tax to BOTH nations.

Fortunately, the treaty (which is specific to US citizens living in Spain, Spanish citizens living in the US, and/or combinations of these situations) spells out how things should be settled.

In terms of that treaty, the general rule of thumb is that you file and pay income taxes first in the nation where the income was received. In the instance of a business owner receiving the income in the US (even if they are resident in Spain) they would pay their US taxes first, then figure out what their Spanish tax liability is, then subtract the taxes already paid to the US, and the final amount (if any) is what they would pay to Spain. 

(The treaty has provisions that prevent double taxation on the same income, so basically you wind up paying only the greater of the two amounts.)

There is another provision in the treaty where if someone had a permanent home available to them in BOTH nations, then both nations might consider them "tax residents". As an example, if someone had a home in both nations but spent the entire year in Spain, then there's a provision that says that the nation where the majority of their financial interests is located becomes where they are considered tax resident.

So you could live the entire year in Spain, but if most of your investments and money is located in the US and you have a permanent home available there, you're a US tax resident.

This does not mean you will not pay Spain taxes- you might still wind up owing- but the point is that you'd pay the US first because that's where, according to the treaty, you're tax resident.

Also note: this does not necessarily mean you have to own a home in the US. You could rent a home, or a portion of a home, or a room in an apartment for a dollar a year from your mom, or anything... as long as it's a "permanent home" available to you (if challenged you'd probably want to have a lease agreement or something, obviously).

I would urge people to find a tax attorney who is expert in this specific treaty and these types of situations.  I would suggest (for that) Pilar Molina at "Bufete M. Vega Penichet".

Sorry but rules are really rules.
I cannot stress this enough these rules are the Spanish tax office rules.
When living in Spain the tax office here wants to have their share of your world wide income. Be it from the UK or anywhere else. It just so happens Spain has several taxation agreement/treaties with other countries.
Yes when there is no agreement you will have to  pay tax Spanish taxes on what remains after you country of origin has taken it's lump.
But just maybe then you will fall into a lower band here in Spain.
I totally agree get legal advice. I have said in post 15.  Just that a lawyer is far more expensive then a Gestoría. Plus they know more about tax issues than any Spanish Abogado.
Wikipedia in spanish
Wikipedia in English

I recently moved to Spain but on a non lucrative Visa and was thinking about changing to a working visa .  Thanks for your question.  I hope you figure out how to stay in Spain under your terms. Personally,  I am in the process of calling tax lawyers for my next years taxes and have determined it is easier to get answers from the larger firms specializing in Expats. These firms are of course located in the big cities such as Madrid , Barcelona etc and where there other many expats living such as Costa Blanca ( Benidorm, Alicante , etc.)  These firms say they can help, however there is a need to have the electronic  signature ( clave ) for filing taxes an you indicated.  I foresee a possible issue with having a local gestor or abogado to represent me in my specific province.  In other words, if a problem arises with my tax filing, I am going to need to find a local abogado in the city where I live.  All I can offer you is to have  plan for a local person to help, unless you are living in the Big Cities.  I hope things fare well with you and your plans.  One other quick point,  I know of a Spaniard who has bought property for investment and was blindsided by the local Hacienda on what the actual tax value is.  This Spaniard had to pay more property taxes than what the property purchase price predicted.  Visit your local Hacienda to obtain the real tax amount.  This very provincially deterministic though, many different property tax rules per province.

Hi. I'm going through some of the same issues. Do you have Gestoria suggestions or names. Thank you for the discussion topic it's been helpful.

Just a quick update. I realize that I posted Mariana Solla's "old" info. She has her own firm now, Oakwood Abogados (www.oakwoodabogados.com). (And I still give her a great endorsement !)

Lashend,

I read all the posts and am curious, in the end, what did you do and what has been your final outcome?  Was consulting an immigration lawyer catering to ex-pats your best avenue?

I ask because I am about to enter into a very similar situation and am beginning my initial research to learn more about conversion of NL to a lucrative visas.

Very interesting responses -

Hi all,
Nice thread and let's continue putting this piece of query to a logical conclusion, I have consulted few lawyers and its possible to change non-lucrative status by applying for a work permit if one can secure a job offer after a year of legal residence in  Spain, still unclear if job has to be in same field of studies or anyone that meets min wages criteria.
There was another interesting point from originator, who is holding the real estate (property) as well, again question is related to taxation, being Non-lucrative resident is it obligatory to pay annual rental Tax of the property you own while its in your own use?
Some threads suggests that expat living in Spain having property must be paying rental tax despite having non-lucrative residence status. (please note here i am not talking about IBI tax).
How it works, can anyone explain? thanks.

QUOTE  "Some threads suggests that expat living in Spain having property must be paying rental tax despite having non-lucrative residence status. (please note here i am not talking about IBI tax).
How it works, can anyone explain? "

The imputed tax (wrongly called second home tax) is payable by non tax residents in Spain on all properties in Spain,  which are not let. If let the owner is declaring income tax on them and thus the periods when let are except.

The same tax is payable by tax residents in  Spain on all properties worldwide which they own or part own, which they do not let (in which case they would have a potential income tax liability in Spain, as determined by any Double Taxation Agreement)  but excluding their family / principle home in Spain.     That even includes say a parking space in  a building, trastero (storeroom)  etc. unless it is included in the escritura (deeds) for their principle home on Spain

I hope that makes it clear