International Tax Spain — Double Taxation, UK Ltd & Cross-Border Structures

This is a common situation for British digital nomads and remote workers. As a Spanish tax resident, you are taxed on worldwide income — including dividends from your UK Ltd. The UK-Spain double taxation treaty prevents double taxation, but the structuring of how you pay yourself matters significantly. Many people in this situation benefit from restructuring. We assess your specific setup and recommend the optimal approach.

A double taxation treaty (DTT) is an agreement between two countries that determines which country has the right to tax specific types of income. Spain has DTTs with over 90 countries including the UK, Ukraine, Poland and most EU states. The treaty determines whether Spain or your home country taxes your employment income, dividends, pension, property income, etc.

Under most double taxation treaties, employment income is taxable in the country where you physically perform the work. If you work from Spain, Spain generally has the right to tax your salary — regardless of where your employer is located or where the salary is paid. Your home country may also withhold tax, which you then offset in Spain. We map out exactly how your situation works.

A company's 'place of effective management' (POEM) is where key management decisions are effectively made. If you manage your foreign company from Spain (board meetings, strategic decisions, day-to-day management), Spain may argue the company is tax-resident in Spain, regardless of where it's registered. This is a significant risk for UK Ltd owners who relocate to Spain.