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Get yourself an accountant

@spa2000

I think @SimCityAT is absolutely right, you're safest to get it sorted by an accountant.

But...

I think it's a bit confusing to refer to yourself as "autonomo" and talk about companies/salaries. They are 2 different options: you can be self-employed (autonomo), or you can be an employee of one (or more) of your companies.

I think you'll find that the UK/Spain DTA doesn't discuss how/why you remain a UK tax resident (or become a Spanish tax resident). It covers taxation when it's due in both places.

Spain has several tests, but the main one is "significant presence" (more than 183 days). So I would say you need to figure out if you are ONLY UK tax resident, or if you are now BOTH a UK AND Spanish tax resident.

But, even if you are NOT a Spanish tax resident, you might still have to pay taxes as a non-resident.

In particular, I would have expected an accountant to advise you that any salary paid should be paid net of deductions (for social security, pension, income tax). Paying it gross, as the employee of a Spanish SL sounds totally incorrect to me. (Unless you're paying yourself as an independent contractor, without deductions. But then your accountant needs to check if you can do this, as a related party, and/or if you need to take a withholding tax.)

So, if, as it seems, you are an employee of both a UK and a Spanish limited company, and pay yourself a salary from both, then each company should be making appropriate local deductions (so that you receive your salary net). But, then, both UK and Spain tax authorities would be interested in the extra income you receive from the other country. It seems a bit overly complicated to me, and I would have guessed it's better to be an employee (with salary) in one or the other, not both. (And probably UK is easiest.)

Companies can trade internationally, so it might not be necessary to even have 2 companies in 2 countries. But you're the boss, so you know best if this is needed for your MNE (Multi National Enterprise). :-) However, if you have money in one company that you want to get out, then the alternative is to pay yourself dividends, rather than a salary.

Thanks very much gwynj.. I appreciate your stab at this. 

This is complex and not totally in the realm of a single accountant.  I have 3 accountants and all disagree with each other as none know the details of the double tax convention (DTC) between uk and Spain.  And Spain tax rules in particular are overly and unnecessarily complex... and different accountants in Spain interpret tax rules in Spain differently it seems.

I spoke to a international lawyer and for benefit of other UK citizens reading,  the cruz of the solution is the DTC. Importantly.. if you comply with tax residency rules of both Spain and UK then the tie breaker is set by DTC and in first instance this is where you have permanent home available. So in short I can be in Spain for 183+ days but still be tax resident of UK.

The DTC also describes how income from employment is treated. I have asked my Spanish accountant for clarification of employee and withholding tax.. but today I learned this autonomo/SL treatment seems to be common hack in Spain to get lower social security payments.  I am not impressed with my Spanish "accountancy" support

The nature of my work demands the need for these two limited companies.  Unfortunately Spain seems to be a minefield of unnecessary tax complexity and unregulated support for small/medium companies. 

I will keep searching for answer. Any further input (other than you need to get yourself an accountant !) would be appreciated

@spa2000

The DTA is here:

I think you're slightly misreading the DTA. How you become a tax resident of Country A, or Country B, is, generally, outside the scope of a DTA between Countries A and B. You ARE a UK tax resident because you still live there, and you never stopped living there, so you've never lost this status. But you ALSO ARE a Spanish tax resident by virtue of spending most (183 + days per year) of your time there (i.e. the "substantial presence test"). However, the DTA does say that when you're a tax resident of both, there is a "tie breaker", as you mention, to establish your primary tax residence country. You seem to be taking it to mean that you are therefore NOT a Spanish resident for tax purposes, and don't need to pay Spanish income tax, regardless of your time there. That might sound pedantic of me, but it might explain why there is confusion, and the need for multiple accountants.

The DTA seems pretty straightforward to me, and it should not require a team of accountants to go through it and implement your tax payments. Apart from anything else it's really expensive to pay 3 or 4 accountants / tax attorneys. And "everyone has an opinion" so they're almost bound to disagree. :-) Better to have just one... but a good one.

I stand by my previous advice that you're not likely to be an "autonomo" if you have a Spanish company, even if this might have "lower social security payments". If you have a Spanish (or UK) company, the usual options are to pay yourself some combination of (a) director's fees (as a director), and/or (b) salary (as an employee), and/or (c) dividends (as a shareholder). Instead, treating yourself as a freelancer/contractor of your own company seems rather cumbersome/unorthodox.

Or, if you think the tax situation is especially complicated, you can even choose to pay yourself nothing (from Spanish company), as you pay yourself enough (or more) from the UK company. But, in this case, it would be recommended to have an appropriate payment - "management charges" or similar - from the Spanish company to the UK company, to reflect that you spend most of your time in Spain.

Even if you need TWO companies (I can see this, now that UK is outside of the EU), it doesn't mean they should be two independent companies (with a common shareholder, you). One could be a subsidiary (e.g. UKco owns Spainco) of the other. Even if you keep two separate companies, you don't necessarily need to be an employee of both. Dividends are a well-established alternative for getting money out, whether or not you are an employee.

Either way, income from employment, and dividends, are both covered by the DTA.

Article 7 BUSINESS PROFITS - looks pretty easy. Your companies make profits (big ones, hopefully) and pay applicable corporate income tax in the country of incorporation.

EXCEPT that there is also Article 9 ASSOCIATED ENTERPRISES - which applies as you are the common owner of both companies.

Article 10 DIVIDENDS - tells you what to do if you take money out via dividends (my suggestion).

Article 14 INCOME FROM EMPLOYMENT - applies to you, as you're paying yourself a salary from both companies. This again covers the issue of 183 days (irrespective of your primary tax residence, per DTA discussion above) AND raises the issue of WHERE you work when you receive a salary! So, it seems it is as I previously suggested, that you should be paying your Spanish salary net of income tax (and other deductions). But it seems this also raises an issue that you earn a salary from your UK company, but are working mostly in Spain... so you need to carefully read the DTA to figure out who gets what.

There is also Article 15 DIRECTORS' FEES which is another way that allows you to pay yourself something,

In other words... "the answer" is in the DTA. No accountants required. :-)

Thanks very much gwynj.. I appreciate your stab at this.
This is complex and not totally in the realm of a single accountant. I have 3 accountants and all disagree with each other as none know the details of the double tax convention (DTC) between uk and Spain. And Spain tax rules in particular are overly and unnecessarily complex... and different accountants in Spain interpret tax rules in Spain differently it seems.

e appreciated
-@spa2000

3 Accountants?

@spa2000

Separately, here are your original questions:

Should I try to pay 24% general non resident income tax on my 2021 and 2022 salaries? I am thinking Modulo 210? Alternatively I could try to declare this tax on my UK self-assessment in Jan23?

I suggest that both are incorrect. In my view, you should have been paying your Spanish salary net of all deductions. So there are two issues: going forward, and fixing past errors.

The former case is pretty easy. Review the DTA and decide whether you prefer salary or dividends. Then start paying your monthly salary net of Spanish deductions. Or pay yourself annual dividends, and pay appropriate taxes according to the DTA. (Or, as mentioned, you can increase your UKco salary, but apply management charges to Spainco to reflect that you mostly work in Spain.)

In the latter case, if you already paid yourself the "salary" gross for 2021/2022, then I would suggest you rectify things by declaring a dividend that covers your payments AFTER the tax due on the dividend is paid (per the DTA). Your "salary" can be treated as advances against dividends, or as a director's loan (to be repaid by your dividends). I would check this with an accountant before doing it, but it seems to be a very straightforward option.

@gwynj

Many thanks for your replies. Very helpful

I agree DTA is clear.. but given I need to present personal taxes for 2021 and soon for 2022 on the basis I described for Spain (ie. autonomo) I need to make sure tax office in Spain see it in same clear way.

I have appointment with Spanish Tax office on Friday (a day before deadline for filing 2021 taxes) to make sure!

@spa2000

Perfect! The tax office should be more useful than 3 accountants (and us)! :-) Hopefully, they will clarify everything for you.