Working on remote and Social Security, where do I need to make contributions?

When there is an international labour transfer there are three relevant issues that must be taken into account: immigration, Social Security and taxes.  

The majority of people who move to Spain due to their personal decision and who will usually be working from home, have a great concern about immigration and taxes but are totally forgetting the importance of being properly covered from a labour and Social Security point of view.  

First of all, we must clarify about remote work, telework or however it is called.  

Although a person can carry out professional activity 100% from home, that does not mean that you are not working in the country in which you are residing. You have to make sure you have obtained the appropriate work permit (not just the residence permit, such as the non-lucrative one) and you have to make sure that you are correctly contributing to social security.  

Beyond scenarios due the global COVID-19 pandemic, which address an exceptional situation and which could therefore be assessed with some flexibility, we must know that when the remote work situation is on a permanent basis (because our employer has allowed it or for our personal convenience) you must apply the labour law of the place of residence and the social security regulations of the country you are living. 

Only in cases where the teleworking situation is temporary, cross-border workers or  the employer has ordered the transfer and, therefore, a certificate of social security coverage can be managed In the country of origin, it is possible to temporarily maintain the contributions in the country where the employer is located.  

It is important to bear in mind that, if you are not in any of the above situations and the foreign company does not have a work centre in Spain to which the employee can join for providing services, the non-resident entity must register in Spain and contribute to the Spanish Social Security. In addition, we must know that the Spanish labour regulations will apply. This must be done before the employee begins to provide services in Spain. 

The penalties for non-compliance can vary between 3,100 and 10,000 euros and in addition contributions not made will be required along with late filing penalties. These contributions can amount  annually approximately 3,000 euros corresponding to the employee, and about 15,000 euros corresponding to the company  

Special care should take the self-employed, independent professionals, etc., the fact of not having an employer does not imply that you can work wherever you want without paying social security. As a general rule, social security must be paid in the country of residence. If it is not done correctly, in addition to the late payment of contributions with the corresponding surcharge, the penalties can range between 300 and 3,000 euros. In this case, we can also find non-compliance of VAT, personal income tax, IAE, etc., if there was not a correct registration to be able to carry out the professional activity.  

Do not hesitate to contact albea if you have any questions about where to pay Social Security.