It is estimated that there are currently around 3 million self-employed in Spain, but what about tax obligations for the self-employed? The labor market has changed over the last few years and in this article we bring you up to date on the taxes you should be aware of in 2022. Do you have any doubts about the forms you need to file? Read on and we will clear up every single one of them!
How to register as self-employed in Spain?
If you are determined to become self-employed, the first thing you must do is to register with the tax authorities and the Social Security.
To register with the Tax Authorities, you must file forms 036 and 037, either online, through the Tax Agency’s website, or in person at their offices.
These forms contain basic information such as personal data, professional activity to be performed and tax obligations for which you will be responsible.
In addition, it is important that you register with the Tax on Economic Activities, by means of form 080.
The next step is to register in the Special Regime for the Self-Employed, better known as RETA, within the Social Security. To carry out this procedure you will have to present the TA 0521 form, during the first 30 days after you start your activities.
If you wish, you can carry out the process telematically, through the Social Security electronic office.
What are your tax obligations as a self-employed person?
You are probably wondering how much does it cost to be self-employed? As you have seen so far, there are a number of tax obligations to which you must adhere if you are self-employed.
The self-employed quota:
Once you have registered, your first fiscal obligation will be the payment of the self-employment fee. This must be made monthly, and currently corresponds to an amount of 289 euros, for the minimum fee; and 1,233.20 euros, for the maximum fee.
Now, thanks to the Law of Urgent Reforms of Self-Employment, it is possible for you to enjoy an initial fee of 60 euros for the first 12 months, 144.50 euros for the next 6 months and 198.31 euros for the remaining 24 months.
Value Added Tax (VAT):
Now that you have become self-employed, you must be attentive to make your quarterly VAT declarations to the Tax Agency, through form 303.
The deadline for submitting this form will be during the first 20 days of the corresponding month. That is, from April 1 to 20, for the first quarter; from June 1 to 20, for the second quarter; from October 1 to 20, for the third quarter; and from January 1 to 20, for the fourth quarter.
In addition, your tax obligations as a self-employed person include filing an annual VAT return through form 390.
The declaration of this tax will depend on the activity carried out and will be calculated by subtracting the VAT of the expenses incurred (input VAT) from the VAT of the income obtained (output VAT).
Generally, the rate applied is 21%. However, this may vary to a reduced VAT (10%) or a super-reduced VAT (4%) depending on the activity.
You may be interested in: Deferred VAT payment for self-employed entrepreneurs and SMEs in Spain
Personal Income Tax (IRPF):
The total amount of your income is taxed through the IRPF, and you can choose between:
The Simplified Direct Taxation Regime
It is aimed at those self-employed with economic activities whose annual turnover does not exceed 600,000 euros in the previous year.
The Normal Direct Taxation System
This regime includes self-employed individuals with economic activities with an annual turnover of more than 600,000 euros in the previous year.
The Objective Estimation Regime or by modules
In this case, only those freelancers who meet specific requirements can access this regime, such as: validating that the activity you carry out is included in the Order that regulates the modules.
Examples include retail stores, hotels and restaurants, workshops, construction materials, hairdressing and beauty services.
As in the case of VAT, personal income tax must be paid quarterly, and the deadlines for filing your return will also be during the first 20 days of the corresponding month.
In this sense, you must present the income and deductible expenses. The associated percentage will be 7% for new freelancers and 15% for those freelancers who have been registered for more than two years.
What forms must you file?
The time has come to comply with your tax obligations as a self-employed person and you should know that you can use form 130 (in the case of the direct regime) and form 131 (in the case of the module regime) to pay income tax. Finally, through form 100 you will be able to carry out the Annual Income Tax Return.
The pension of a self-employed person in Spain:
One of the most frequent doubts when deciding to work as a freelancer in Spain is the issue of retirement and pension.
So, is it possible for a self-employed person to retire? Yes, as a self-employed worker you will be entitled to receive a public pension. However, you will not enjoy the same financial benefits that employees have.
In this way, the calculation of a self-employed person’s pension is directly related to what he/she pays to the Social Security. So, depending on how much you have contributed you will be able to collect more or less.
The minimum period that you must fulfill to be able to retire as a self-employed person is 20 years, and the associated amount will be around 226 euros per month. However, if you have been retired for 25 years, you will be able to receive 561 euros.
In the case of a person who contributes the maximum number of years (37 years), the monthly figure will be around 789 euros per month. And, if you have made a maximum contribution to the Social Security, you will be able to have a maximum pension with a fixed amount of 2,683.34 euros.
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Do you plan to be self-employed in Spain? As you may have noticed, there are a number of tax obligations that you will have to comply with in order to be up to date with Spanish laws.
Making your tax returns can be a simple process and at TAS Consultancy we offer you our team of experts to advise you. Enter our website and contact us to help you with the procedures you need!