Saturday, December 23, 2017

New Wikia for collecting expat experiences

I created a Wikia (essentially a standalone wikipedia) for collecting posts and issues for helping people who are moving to Spain.

Find it here and contribute if you want:

Thursday, September 21, 2017

Referendum etc

Since we lived in Catalonia for eight years and we still have many friends there, I feel that I am at least somewhat qualified to have an opinion. If I still lived in Catalonia, I would vote no in the referendum, but I would definitely go and vote, since I believe that in a democracy, people should be allowed to express an opinion without fear for arrest. If a significant majority wants to be independent, so be it. 

It's been very sad watching the escalation between Catalan separatists and the central government. If Rajoy had been trying to create the conditions that make an independent Catalonia inevitable, he couldn't have done a better job. Catalans are very proud of their nation, even if they aren't necessarily all separatists.

Sending the Guardia Civil (which played a significant role as Franco's enforcers during the dictatorship) means alienating the people who would have actually supported a unified country. In addition, trying to solve this with heavily armed police means that at some point someone will probably get killed, and then there will be reprisals, etc.

I'm actually reading a book on successful and unsuccessful negotiations, and unfortunately the PP and the current Catalan government perfect fit the role of the worst possible negotiators.

I don't see what endgame Rajoy could possibly be hoping for... even if he stops the referendum, sends thousands of people to jail, and rips up the devolved government in Catalonia, what then?

Tuesday, August 25, 2015

Bye bye

Now that I'm not living in Sant Cugat anymore, I should probably find myself another blog. Part of the reason I started with the blog in the first place was to have a semi-anonymous place to vent about my feelings and frustrations. I don't feel the urge to whinge as much anymore, which is probably a good thing.

Anyway, good bye and thanks for reading.

Wednesday, July 29, 2015

Domestic help: 12 or 14 payments per year

Spain traditionally has had 14 pay periods: once per month and one summer and Christmas “extra”. The extra isn’t really “extra”, it is just dividing the annual salary into different fractions.

HOWEVER, 12 payments is significantly easier from an employer’s paperwork perspective:

  • Social security calculations are easier, since the deductions for the “extra” is calculated differently.
  • At the end of the contract, you need to pay out the proportional amount of the upcoming “extras”. This is done in a really weird-ass way (accrued simultaneously over the entire year), and effectively gives the employee an extra month’s pay.

So next time you hire someone, forget the 14 payments with extra, and just pay once per month.

Monday, July 13, 2015

Modulo 720, Wealth Tax and IRAs, 401k in Spain

Spain has three asset-related filings that you are supposed to do every year. The ETE (which is only for people with > 1 million euros abroad), the modulo 720 and wealth tax.

The wealth tax and Modulo 720 are filed annually: the 720 is just informational, but with huge penalties, and the wealth tax might actually make you pay something. The 720 is designed to be a superset of the wealth tax, so if you file a 720 and later file wealth tax with smaller numbers, you will probably get a letter from the tax department.

Pensions are generally not included on these statements as long as the following hold true:

  1. That contributions are unavailable until a contingency covered by the plan occurs.
  2. The contingencies covered can only be: age, extreme poverty, being widowed or orphaned and disability.
  3. Once the contingency has happened and the contributions are withdrawn, the income is taxable
The consensus seems to be that Traditional IRA and 401ks qualify under these assumptions (although technically IRAs and 401ks can be redeemed with a tax penalty, this gets glossed over).

Roth 401ks would be trickier since they are not taxable when withdrawn. There might be other valid arguments about why they might not be declarable (eg during the first five years), but I don't know if there is a consensus on this.

Always talk to an tax expert before filling out a 720 form (especially filing an amended 720, which is really just an invitation to get slapped with a huge fine).

Sunday, July 12, 2015

Odious debt and the Greek referendum

Seems like the referendum has made any deal that is "worse" than what was voted on by the people impossible.

Even if the Greek government surrendered completely and accepted whatever deal anyone was willing to offer, its clear that the deal would not be considered legitimate since it was worse than what the Greeks rejected in their referendum.

Any debts incurred by this new deal could be considered "odious debt", since it was obviously against the will of the nation, and so for the creditors, there is really no upside in offering any kind of deal.

When the creditors talk about "trust", they are clearly worried that Greece would repudiate the deal as soon as the funds are released.

It's also clear that as soon as banks are reopened, no one would leave a single Euro in a Greek bank anymore, so the cost of recapitalizing the Greek banks would be absolutely horrendous.

The end of consensus at the EU

The biggest fallout of the Greek debacle is going to be the shattering of the illusion that the EU could be run by unanimous consensus. In the past, the EU has always been able to paper over its differences and arrive at a messy solution, but still acceptable to all members.

The reason for this structure has been that since the EU is an association of sovereign governments, enforcing the will of the majority of EU members against a minority would violate the spirit of the whole arrangement, and we go back to the strong enforcing their policies against the weak, which was what got Europe into the whole mess of wars of the last century etc in the first place.

Given the gulf between different members of the EU, it's basically impossible to resolve this situation at an EU level, the only result can be that nothing happens at the EU levels, and individual governments sort out the mess on their own.