International Labour and Tax Law

In all these situations, both companies and employees have to comply with a series of legal obligations in order not to be affronted with unpleasant situations of administrative fines and doble taxation problems.  

What we offer 

• Study and implementation of provisional transfer of employees by applying the European Directive 96/71 and the Spanish Law 45/1999 on the transnational provision of services and the European Regulation 883/2004 on social security coordination systems between European countries.  
• It is important to note that in the case of digital nomads for the moment there is no specific regulation at a European level. Nevertheless, at a national level,   Spain has recently approved a new legislation called “Startups Law” in order to give important fiscal incentives, eliminate bureaucratic obstacles and make procedures more flexible to encourage the creation and investment in technology-based emerging companies (startups). Important measures are also included to attract and recover international and national talent, favouring the establishment in Spain of teleworkers and “digital nomads”.  Significant tax incentives are put in place for companies, investors and startup workers, including the EU’s more favourable treatment of stock option remuneration . The procedures are streamlined to be able to constitute a company with a single step and by telematic means, without notarial or registration costs. It also establishes a one-stop shop for the declaration of the innovative nature of the company and access to the benefits provided for in the Law. Outstanding tax measures are introduced, such as the reduction of Corporate Tax (from 25% to 15%) and Non-Resident Income Tax for four years.  

Things to consider when implementing an employee transfer from a foreign company to its Spanish subsidiary: 

• Distinction of the case of provisionally transferred  employee, multi-state worker or located in a country other than that of the company in order to apply the correct legislation.
• Law applicable to the labour contract with international elements.
• Obligatory labour law stipulations that cannot be excluded by provisions of the labour contract.
• Competent jurisdiction in case of conflict according to the article 12 of EU Regulation 1215/2012 (Brussels I Regulation) according to which: Employers may be sued in another Member State:

1. before the court of the place where or from which the employee habitually carries out his  work or before the court of the last place where he carried out his work;  or
2. if the employee does not or has not habitually carried out his work in a single State, before the court for the place where the establishment which employed the worker is or has been situated. 

Also, according to Spanish conflict of jurisdiction law (LOPJ. Article 25), the Spanish Courts and Tribunals will be competent when  the services have been provided in Spain or the contract has been concluded in Spanish territory;  when the defendant is domiciled in Spanish territory or an agency, branch, delegation or any other representation in Spain.  

• Social Security contribution rules:

EU/EEA/Switzerland, countries with a Social Security Convention and countries without an agreement. In the absence of ad hoc rules, the rules of international law and the national law of the place from which teleworking is located/place where the company is located apply.