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Spain to cut taxes for digital nomads

The Spanish government adopted Friday measures to attract so-called digital nomads -- remote tech workers who can do their job from anywhere with a good internet connection.

Published: 11 December 2021 11:37 CET
The photo shows several laptops on a tablet with notebooks, phones, a teapot and cups
The widespread adoption of remote working during the coronavirus pandemic has opened up the possibility for more workers to relocate far from home. Photo by Marvin Meyer on Unsplash

A growing number of countries are seeking to lure digital nomads with easy visa conditions and tax breaks as they can help boost the local tech start-up scene.

The Spanish measures, which will allow arriving digital nomads to use a non-resident tax status with lower rates for five years, will form part of wider legislation meant to help start-ups, including fiscal incentives for investors.

The legislation will “attract and retain international and national talents” by helping “remote workers and ‘digital nomads’ set up in Spain,” the economy ministry said in a tweet.

Spanish expatriates who have been abroad for more than five years are also eligible for the programme.

The widespread adoption of remote working during the coronavirus pandemic has opened up the possibility for more workers to relocate far from home.

Earlier this year, Croatia adopted a measure offering a one-year visa to digital nomads and exempting them from income taxes.

Georgia, Thailand, Iceland and Costa Rica also have measures in place for digital nomads.

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WORKING IN SPAIN

Can you work outside of Spain on the non-lucrative visa?

The non-lucrative visa is a popular choice for non-EU citizens who want to come and live in Spain, but there’s long been confusion over whether or not you can work outside of the country or not while you’re on it.

Published: 19 September 2024 10:24 CEST
Can you work outside of Spain on the non-lucrative visa?

The non-lucrative visa or NLV as it is often referred to, is a residency authorisation that allows non-EU foreigners to live in Spain.

As the name suggests, however, it’s non-lucrative, so it doesn’t give you the right to work here, instead you have to demonstrate that you have sufficient savings for yourself, as well as any family members you’re bringing with you. 

Many people claim that if you’re not actually working in Spain while on the visa, and if you’re work comes from abroad then it’s fine, but is it actually legal?

Online searches reveal many conflicting results with several sources saying you absolutely cannot work on the visa at all under any circumstances and others saying that you can and authorities simply turn a blind eye.

It used to be a big grey area because Spanish law didn’t specifically mention remote working. Spain’s General Immigration Regime stated that, while staying on the NLV:

  • You mustn’t work for a Spanish company
  • You mustn’t work for a Spanish employer
  • You can’t open your own business in Spain
  • Nor can you open a branch office in Spain

In terms of remote working specifically, the law did’t actually address it.

READ ALSO: Does Spain check if you’re working on the non-lucrative visa?

But, authorities seemed to suggest that you couldn’t work on it at all, under any capacity, due to their rulings and decision making.

According to Barcelona-based law firm Balcells: “During the pandemic (from 2020 onward), the vast majority of consulates started to reject applications from foreigners who clearly stated they wanted to start working remotely”.

“Or if the consulate sees that remote work is what you have been doing for the past months/years, your application may even get rejected too”.

In 2023, a Madrid court denied a Venezuelan national’s application for the non-lucrative visa because they continued to advertise their professional services on sites like LinkedIn.

These all support the fact that working, even remotely for another country is not allowed.

The amount of savings you have to prove for the non-lucrative visa in 2024 is €2,400 per month, which must come from passive income such as return on investments and rental income, rather than physically working.

READ ALSO: Non-lucrative vs digital nomad visa: Which one should you choose to move to Spain?

There is now even stronger legal evidence to support the theory that you can’t work remotely while on the NLV, with the introduction of Spain’s Digital Nomad Visa or DNV in early 2023.

The whole point of the DNV is to allow non-EU remote workers and freelancers to be able to live and work in Spain, so it would defeat the entire purpose of this visa if you were allowed to work remotely on the NLV.

The DNV in fact has many requisites to ensure the way in which remote workers can legally work here. For example, they have to have worked for the same employer for three months or more and any company they work for has to have been in existence for more than one year.

To apply for the DNV in 2024 you have to prove a monthly income of at least €2,646. While this is slightly more than the NLV, it does mean that you can continue working. 

READ ALSO: Does Spain accept savings for the digital nomad visa if earnings aren’t enough?

Many remote workers may have used the NLV option in the past, but today there is no excuse, you may as well just apply for the DNV instead.

As authorities are cracking down on NLV applications, it’s simply not worth the risk having your application denied if you plan to continuing working. If you’re found out and are not declaring your income properly too, you could end up with a hefty fine and be unable to renew your visa in the future. 

Therefore, if you want to work remotely for company outside of Spain, it’s best to forget the NLV and go straight for the DNV, which will ensure what you’re doing is truly legal.

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