Are you thinking of being self employed (autonomo) in Spain but are unsure of the conditions?
In this article we will summarise the costs and advantages of the New Autonomo Plan and who it applies to.
To be self employed in Spain you must be registered as such with the tax authority. Once set up, you will be required to make monthly social security contributions.
In many cases, newly registered individuals benefit from a reduction in the level of social security payments for the first 2 years.
To benefit from the reduced contributions detailed below, you must not have been self employed in Spain at any point during the past 2 years, must not be the administrator of a Spanish registered company, not be a religious member of the Catholic Church or be a self-employed collaborator.
The standard monthly rate of social security for self employed in Spain as of 2018 is €275.02.
During the first year of being registered as self employed, the contributions are reduced to €50.00 per month.
Second year social security payments
The discount reduces in the second year.
In months 12 to 18 there is a 50% reduction from the standard rate. This means a monthly payment of €137.51.
In months 18 to 24 there is a 30% reduction from the standard rate. This means a monthly payment of €192.51.
In the majority of cases, self employed individuals must charge VAT (IVA) on all invoices issued.
Certain professions, such as teachers, are exempt from this requirement.
The standard rate of IVA in Spain is currently 21%.
VAT returns should be filed on a quarterly basis. An annual VAT return must also be submitted.
When a self employed individual issues an invoice to a company or another self employed person, a withholding tax must be applied.
During the first 3 years of being registered as self employed the rate of withholding tax is 7%. This is an advance payment of your income tax.
The company or self employed individual receiving the invoice, will need to account for this tax payment on a quarterly basis and the retention paid to the tax office.
At the time of writing the tax rates in Spain are as follows:
RATES IRPF (TAXES)
From To %
0€ 12.450 19
12.450 20.200 24
20.200 35.200 30
35.200 60.000 37
60.000 – 45
If you have any questions in relation to your tax status in Spain, please don´t hesitate to contact us.
The accountancy department of Gascón Bernabéu provide specialist advice for international companies and professionals.