alt Hacker News> the Estonian company they run now has to file tax returns and pay taxes not only to Estonia but also Spain.
Yes, this again makes sense to me. You have a company in Estonia, so that pays taxes in Estonia. You work for this company from Spain, so you pay taxes in Spain. Doesn't it work the same elsewhere? What other ways could it work, assuming we want taxes somewhere?
> But then if what Estonia considers acceptable standards for tax reporting differs from what Spain considers acceptable
Yes, that also makes sense, different countries have different systems? Again, if you open a company in Estonia, the ground assumption has to be that you're up for understanding Estonian tax laws. If you're living in Spain while working for that company, the ground assumption is that you're up for understanding both Spanish and Estonian tax laws, because they should of course get their taxes.
As long as I don't get taxed on the same money in both countries (which there are a lot of bi-lateral agreements solving that), I don't see the issue here.
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The Estonian company pays the Spanish resident money to them personally. Indeed it is normal that the Spanish resident has to deal with the Spanish taxes on this money only.
If the Estonian company is supposed to be considered a separate legal person based in Estonia, it shouldn't have to deal with anything Spanish.
> As long as I don't get taxed on the same money in both countries, I don't see the issue here.
That's exactly one of the current issues. The general rule is something like 'taxation happens where the company creates value'. Registration in Estonia just means taxation starts in Estonia. But at any point can Spain say 'we consider this a Spanish company'. After Spain taxes too, you can request a tax refund in Estonia. That's assuming they agree. Both countries will only communicate with the company, not with each other.
So while double taxation treaties are great, they are not doing much upfront in this respect.
The above is about company taxation, not personal taxes. For SMB that line is often confusing.