If you’re considering freelancing in Spain, you’ll be joining 3 million freelancers who make up 17% of the working population.
“A freelancer or self-employed person is popularly referred to as autònomo in Spain. Officially it’s called permiso de trabajo por cuenta propia
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Here’s what you need to know about becoming a freelancer in Spain:
In Spain, even those who offer online tutoring or sell on Etsy or eBay are considered autónomo and need to register as autónomo. In the Spanish government’s eyes,
“Any person who invoices customers and earns any amount of money by providing services or selling products needs to register as an autónomo.
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Are you freelancing sporadically and earning less than Spain’s minimum wage? The Supreme court says that you’re exempt from registering as an autónomo, barring a few exceptions.
These exceptions are rather confusing to interpret. For example, if you have an (online) store and earn every few months or less than the minimum wage, you’ll need to register as autónomo as the Social Security office sees this as regular economic activity.
Due to the confusing exemptions, we recommend that you hire a gestor, a sort of consultant who'll help you with taxes and othe bureaucratic affairs.
Spain classifies self-employed individuals into 6 types.
“It’s important to know the different types as this determines how much tax you pay.
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The 2 main types include:
Autónomo Profesional (self-employed professional)- These are freelancers who can set their schedules, work from anywhere, and work for multiple clients. You can be a registered freelancer (profesionales colegiados) such as doctors or engineers or unregistered freelancers (no colegiados) such as translators and designers.
Trabajador Autónomo (Self-employed worker)- people who’re their bosses and can hire others, such as singers, athletes, taxi drivers.
The other types include:
We’ve outlined 6 steps that show how to become an autónomo in Spain:
Only non-EU/EEA citizens need to apply for a Spain freelance visa from their home country to legally live and work in Spain. This is valid for 1 year and each renewal grants a 2-year visa.
You’ll need to meet the following conditions and submit the following documents:
“Ensure that all your documents have been translated into Spanish and have an apostille stamp.
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If you’re starting your own business, you also need:
Once you arrive in Spain, you need to collect your residence permit within 30 days to legally live and freelance in Spain.
As a non-EU/EEA citizen already living in Spain for at least 3 consecutive years, you can modify your current residence permit to a self-employed residence permit from within Spain. You’ll need to:
Your NIE number (Número de Identificación de Extranjero) is your unique tax identification number. It’s one of the most important documents you need for registering as an autónomo in Spain, among other things.
Autónomo’s in Spain need to pay 2 types of taxes– Income tax (IRPF- Impuesto sobre la Renta de Personas Físicas) and VAT (IVA). To pay these, you need to register with the tax agency, also known as Agència Tributària, AEAT or Hacienda in Spain.
As an autónomo, you’re also required to register the type of economic activity you’ll perform so that you can pay the appropriate economic activity tax or IAE (Impuesto sobre las Actividades Economicas). To register this, fill in the code(s) that corresponds to your economic activity in Modelo 036 or Modelo 037.
“Although IAE registration is essential, it’s good to know that most freelancers don’t need to pay this tax unless their net turnover is more than €1,000,000.
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You need the following documents to register with the tax agency in Spain and receive your personal tax certificate (IRPF):
Although not mandatory, it’s definitely convenient to have a Spanish bank account. Not only can you get paid easily as a freelancer but also have the mandatory social security contributions deducted automatically every month.
You’ll have 30 days after registering with the tax authority to register with the social security (tesorería de la seguridad social).
Specifically, you need to register under the special regime for self-employed workers called RETA (régimen especial para trabajadores autónomos). This is mandatory – even if you receive no income.
Make sure you already have your social security number before the registration with RETA.
Bring the following documents to register with RETA:
You might need to get appropriate licences before starting your business if your place of business employs others or has an impact on others.
For instance, you need a licencia de apertura or an opening licence from the town hall if you’re open to the public.
Even if you operate from a home, you need to have a licence if other employees are working or customers are visiting. E.g a creche owner or home accountant. In this case, it’s in your interest to get the license too as you can table the cost for electricity, water, etc. as business expenses.
“Any autónomo is responsible for registering themselves with the tax and social security agency, keeping track of their finances, paying VAT and personal income tax (IRPF), and being personally liable for any debts.
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Every autónomo is responsible for invoicing their customers correctly and maintaining accounting records that meets the legal Spanish standards.
This means maintaining a simple report of all business expenses and income from providing services. In addition, all your invoices must contain:
“Personal income taxes (IRPF) are charged at a progressive rate (19% - 47%) and vary per autonomous region in Spain.
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Autónomos need to file income tax in advance, every quarter, at 20% and annually between April-June. That means, every January, April, July and October, you need to make an advance payment of:
(Business income - business expense) x 20%
You also need to declare your VAT (IVA) taxes quarterly. The VAT is charged at 21% on the selling price/service cost (must be on all invoices). This is how you calculate it:
VAT paid on business expenses - VAT charged to customers
Do note that when dealing with customers outside the EU, you don’t have to charge VAT to your customers.
“Autónomos need to file a VAT and income tax return (declaración de la renta) timely to avoid penalties and to keep their (freelancer) work permit.
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Here’s a summary of when you need to file taxes as an autónomo:
These are the main tax forms you need to fill in as an autónomo:
Other forms you may need in specific circumstances include form 720, 347, 190, 180, 349, 115, and 111.
If you need help, consider hiring a gestor who can take care of the bureaucratic affairs. You can table their fees as a business expense and make it tax deductible!
Although monthly contributions to social security are the highest in Spain within the EU, they provide plenty of benefits-
The amount you contribute monthly to social security is calculated by multiplying 30.6% to the base amount you want to contribute. The base amount in 2022 ranges from €960.60 - €4,139.40.
So, at minimum, your monthly contribution (*cuota de autónomo) is €294. If you want to pay more than the minimum, multiply 30.6% to the base amount of your choosing.
“Compare to last year, the minimum contribution has seen an increase of €96 - €225 per year. This is a big hit considering freelancers need to contribute even when receiving 0 income.
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There’s some relief for new freelancers thanks to the new autónomo law in Spain. You’ll pay a discounted flat rate for the first 2 years and gradually move up to paying €289 per month.
It’s also good to know that any social security contributions to RETA are tax-deductible.
“Self-employed women under 35 and men under 30 are entitled to additional social security benefits if they’ve recently registered as autónomo.
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In this case, you can enjoy an additional 30% reduction in the following 12 months after the new freelancer discounted rate mentioned above. This means you’ll have 36 months of reduced social security contributions before moving up to paying €294 per month.
For more information, refer to the updates by Seguridad Social.
“This proposal is still under heated negotiation. Lorenzo Amor, President of Asociación Autónomos, believes this reform will encourage the underground economy and is a move towards an even more unfair system.
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From 2023, freelancers can no longer choose to pay the minimum social security contribution of €294, which many consider high.
In the new system – which will be phased in over 9 years– there’ll be 13 contribution brackets. Freelancers will need to pay social security contributions ranging between €184 - €1,267, depending on which bracket their income corresponds to.
While this means, greater protection for temporarily unemployed or low earning freelancers, it’s bad news for mid to high-income earners. Anyone who earns above €1,125 per month is going to be affected by a sharp rise in social security contributions – almost double or more!
Here’s what you can expect to pay for social security contributions in Spain from 2023-2031:
Some recommendations to ease your life and reduce stress:
Now that you’ve read all of it, here’s a summary of the pros and cons of becoming a freelancer in Spain.
Not earning enough or need to stop? De-registering as an autónomo is quick and simple:
If after reading all this, you're keen on becoming a freelancer in Spain, here’re some popular freelance jobs for inspiration:
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