I’m very strange. You don’t have to tell me – I already know. I’m one of the only people you’ll ever meet who enjoys paying bills. From the first moment I got bills after college – had to pay rent – I would sit down and pay them and feel a special satisfaction afterwards. First, it felt good to know I was set for another month. And second, I felt like a responsible adult. Someone who could ‘Cover her nut’ as they say. It’s a squirrel reference I got from my Dad.
But this extends to that odious task most people hate – Paying Taxes. I love the moment when I file our taxes for the year. I know I’m good to go for 12 more months. Whew! It’s not about getting a refund. We haven’t gotten a tax refund in zillion years. We always owe. But I like knowing we can pay our fair share.
It’s that time of year again. Tax Time. And being expats, we have to pay taxes in two countries. Super fun! Due to Covid-19, the due date for taxes in the US was pushed out to July 15. But here in Spain it’s June 30th – just like always. Let the count down begin.
We hired a firm out of Barcelona to take care of this for us. They know all the ins and outs of the tax treaty between the US and Spain – so we don’t pay double taxes. The US is the only country in the world that makes it’s citizens, who don’t reside in the country, continue to pay taxes there. And though, yes, the tax rate is higher in Spain than for the same income in the US, you do get credit for what you pay in one country, with what you’ll owe in the other.
Unwinding the mysteries of taxes in the US was something we relied on experts for, too. Ed, the magician, has handled our taxes for a decade. And he is still our go to for anything on the fiscal front. In Spain, we have a junior member of the firm helping us navigate the maze that is the Agencia de Tributaria.
When I first saw this name on a building, and on an envelope in our mailbox from the previous tenants, I thought it was from the water board. I mean ‘tributary’ sounds like something to do with a river. But no, unless its a river of money – it’s actually derived from ‘tribute’ as in ‘paying the tribute you owe to the king.’ In Espanol – it’s the Tax Man. And we won’t pay this tribute in bushels of wheat from our fields. Or sheep. They just want cold hard cash. But unlike the US where, as a private citizen, you pay everything you owe in one go on the due date (usually April 15) – here you can pay 60% on June 30th and the remainder on November 5th. Interest free. And you don’t sign your tax forms. The government figures if your gestoria is filing your forms, you probably agree with what they’re doing.
Moving to Spain, you hear many expats discuss paying taxes – or avoiding paying taxes, at all – very frequently. But I’m a big believer that when we live in a civil society we are responsible for each other. That means we need to pay our fair share in the country where we live. Many times on this blog I’ve expounded on my love for the Spanish health system and much more. And recently they passed a minimum income scheme that will top up those who are at the bottom of the economic ladder. No – it’s not welfare or unemployment – like in the US. It’s where those who still work, yet don’t earn a minimum amount to live are assisted in topping up their monthly income.
We love living in Spain and I like knowing we’re contributing to all of it. When we drive on roads, we helped to maintain them. When we walk through the park, our taxes are keeping the grass mowed. We’re paying back in the US, too. Into the social security system that we don’t use but others do. And the younger generation will pay for us when the time comes. Maybe that sounds Polly Ana-ish. Perhaps you’ll call me naive. But it doesn’t matter – I’ll still smile as I see the Euros leave our account on June 30th and write the check to the US. It’s all good. For 12 more months.