Question
I’m applying for Spain Digital Nomad Visa in Spain as contractor but I also have a W2 job in the US. Is anyone in this situation and can share their experience?
I won’t be a tax resident for 2024 in Spain but I want to figure out how to not have taxes (or reduced taxes without penalty) taken out in the W2 starting 2025 so I don’t have to wait for refund.
I’m allowed to work remote with the W2 job but I don’t want to change to 1099 because they provide health insurance for my family and my husband will be in the States a lot so I do want him to keep that coverage.
My tax rate is going to be about 37.5% based on estimate calculator and I want to be prepared for it. Just trying to budget, figure out how to keep this separate so when I have to pay I have the money. Autonomo aside because I understand a certain percentage will be take out quarterly.
Answers
These are the answers of Spainguru’s Spain Digital Nomad Visa group members:
“Do you have formal permission to work remotely outside the US? Brave of your company.”
“Why is it brave? They won’t have an office there or any activities outside of me working from my computer. As far as I can see that’s not a tax liability for them.”
“Spain says it is a liability for them. They must have permission and pay into Spanish system because work is taxed where it is performed.”
“Under almost all countries’ laws, remote workers are considered to be working where the worker is located, not where their employer is. Your employer is responsible for paying Spanish taxes, Spanish social security, complying with Spain’s employment laws etc. Very few companies are willing to do that once they understand this.”
“It most definitely is and my guess is they have no idea of the issues involved.”
“I have a friend who works for a US company in Boston. She works remotely in different parts of Europe for 4 to 6 weeks at a time and her company doesn’t pay taxes in the EU.”
“Depends on the situation. If she is working in those countries because she feels like it, issue. If she’s being sent there on business then it gets complicated but possibly fine.”
“It’s the former. She just wants to travel and it’s not related to her work.”
“Under those circumstances unless she has some special visa (of which there are a few) if she is working outside the US her employer is responsible for adhering to local employment law. She would normally need a visa that allows her to work in that country and a tourist visa doesn’t normally allow that.”
“Just file your taxes with the FEIE form and you will get your taxes refunded. Many employers send w2 employees abroad for work, such as people working on oil fields, business consultants abroad etc.
You can also fill out this form below to have your employer not withhold the taxes. Now whether your company is compliant in your country abroad, is a more complicated topic, it will be much easier to just 1099 you.
Insurance abroad is much cheaper, I would just ask for your work to pay for an international plan if they have issue with you being abroad as a w2 worker. most US plans will not cover you abroad anyways, so worthless to have your employer pay for it.” [Link to IRS FEIE form]
Conclusion
Navigating the complexities of working remotely for a US employer while on a Spain digital nomad visa involves understanding both US and Spanish tax laws.
Employers must comply with local regulations where the remote work is performed, which may include paying into the Spanish system.
It’s crucial for digital nomads to seek formal permission and clarify their tax obligations to manage their financial planning effectively.
Join our community!
Make sure to join our dedicated Spain Digital Nomad Visa group here!
