HEALTHPLAN MAGAZINE

What is Autonomo?

To be registered as Autonomo in Spain is to legally acknowledge that you are a freelancer, that you are self-employed or that you run an unincorporated small business. The Spanish authorities require such business entrepreneurs to register and pay taxes as well as charge IVA (VAT) to their customers. Most businesses regardless of their level of income are obliged to charge IVA in Spain, although there are some exceptions.

If you have an employment contract with someone else, then the autonomo rules do not affect you.

Who Should Be Registered as Self-Employed?

The rules in Spain regarding autonomo status are strict. Regardless of whether your earnings are casual and small-scale – such as selling on eBay, selling at craft markets, running a Tupperware party, selling makeup, or if you do occasional after-dinner speaking – you do have to register.

Bar owners, people working as IT or Engineering consultants, English teachers or anyone running their own small business that invoices clients or customers are all responsible for registering themselves as autonomo.

Where your earnings are more sporadic and you are not actually earning a proper living then there are some exemptions.

For a partnership of more than one individual, the alternative is a ‘CB’ or ‘Comunidad de Bienes’ which is similar legally to autónomo. The CB is not a legal entity separate from the participants so both or all of the owners will be fully liable for any debts.

Your Classification as an Autonomo

For those who are running commercial and trading businesses, they are known as Autonomo Empresarial. Professionals or freelancers are known as 'Autonomo Profesional'. There are then sub-classifications within these two broad categories depending on the line of business you are in, or your professional activity.

What Are the Advantages of Being Autonomo Opposed to Having an S.L Company? (this is an LTD company in the UK)

Because people are reluctant to register, it means many tend to only accept cash-in-hand payments. The disadvantage of taking cash-in-hand payments is that you cannot then declare the income for tax purposes on your annual tax return. This also means you are unable to issue an invoice to your customer for services you have provided and they cannot then deduct the expense from their taxes themselves.

Registering as an autonomo is a really quick, simple, and cheap way to make your business legal. By choosing autonomo status, the business will be easier to administer as there is less paperwork. It is also cheaper to start up and if necessary, wind up.

How to Register as Autonomo in Spain

There are two parts of the process of registering as an autonomo in Spain. Firstly, you register with the tax office (Agencia Tributaria or Hacienda). To do this you must register yourself within the Census of Liable Taxpayers by completing Form 030. 

Next, you must join the autonomo social security system (Regimen Especial de Trabajadores Autonomos or RETA). This is using form TA.0521/1

Visit the following page to find out how to get your social security number in Spain.

For the autonomo registration, you need a national insurance number for Spain (An NIE) and a Spanish bank account. If you're from outside the EU you will also need a work permit or residency visa.

In order to join the autonomo social security system (RETA), you will be required to be in the social security system already, but this registration process is also straightforward.

The Agencia Tributaria would expect you to be registered as a resident taxpayer so you need to complete the Modelo 36 or Modelo 37 forms and then file it with the Hacienda. The form asks you to stipulate who you are, where you live, and to outline the sort of business activity you perform. You fill in where your business is located and whether you will be paying VAT or IVA as it is known in Spain.

Whether you will be paying VAT or not will depend on the kind of product or service that you are charging your customers for. Some products and services are exempt from VAT. There are also some exemptions when invoicing businesses that are based overseas. Check with an accountant to confirm whether you should be charging VAT/IVA or not.

The form should be accompanied by proof of identity, usually, your passport and you will need to provide your NIE number.

Alternatively, you can ask an accountant or gestor to collect all of the relevant information and they will go with you to register at the tax office.

Social Security Contributions

Once you are registered for the purposes of tax and VAT, you need to register for social security purposes. The Spanish Social Security system is very much like the National Insurance system in the UK.

Unless you make the necessary payments you will not be entitled to access public health facilities, receive a pension or statutory sick pay or paid maternity leave and you will also be breaking the law.

You will need to fill in another form acknowledging your autonomo classification. This is because different categories of employment trigger different social security payments, so if your work is deemed to be dangerous, then you will pay more in contributions.

In Spain, the amount you pay in social security payments each month is determined by the base amount and the figure to multiply it by.

In 2023, the base amount in Spain ranges from between €751.63 and €4,139.40. This amount is then multiplied by 30.6% which gives you a minimum monthly payment (Cuota de Autónomo) of between €230 and €500.

In 2024 the quotes are then between €225 and €530 per month.

For 2025, they will be between €200 and €590 per month.

The more you earn, the more you will ultimately pay.

Recently, however, the Spanish government has reduced this amount to €80 per month for the first 12 months of self-employment. This can then be extended for a further 12 months if earning less than the minimum wage per year.

Note that any social security payments are tax-deductible.

Social security payments are paid every month unless your income is less than the minimum wage, which is currently €1,260 per month.

However, this is not written in stone and there may be instances where you will still have to pay. It will very much depend on what you are doing for a living. Please always seek help from a tax specialist to confirm your tax liabilities and avoid any potential fines or other sanctions.

Licences

Other steps you may need to take will depend on the type of business you run, for example, if you operate premises that are open to the public you will need an opening licence called a 'licencia de apertura' which can be obtained from the local town hall. You will need to be inspected before the licence is granted and you will pay fees and be asked to provide evidence of any documents or certificates that the town hall demands.

Home-based licences are usually not a problem if it is a simple internet-based business, however, if you run a business from home that employs people or impacts on other people, such as a crèche, then you will require additional certification.

Any business with employees is usually not permitted to operate from a residential apartment block, although some office-based employers such as lawyers and accountants may have offices on the first floor of a residential building, but no higher. Always take advice if you are uncertain.

Other Obligations for Autonomo's

You will be legally obliged as an autonomo to

• Provide quarterly tax and VAT (IVA) returns (These payments are on account and will be subtracted from any required annual tax payment.)
• Keep up with your monthly social security payments
• Issue properly drawn-up invoices, as appropriate
• Keep accounting records according to the legal standards of Spain
• Retain 19% of any invoice (Retenciones) if you offer ‘professional’ services and are invoicing another autonomo worker or business. This is then paid to the Agencia Tributaria as advanced income tax and then credited when quarterly income tax returns are made. For self-employed workers with less than 2 years trading the rate is reduced to 7%. For women under 35 and men under 30, the reduced rate continues for 3 years. Note you will not need to retain any taxes if you are Empresario Individual or are invoicing an individual or business outside of Spain.

Important Self-Employment Changes From 2017

In November 2016, an important government proposal was put forward to change the tax laws for self-employed workers and generally encourage more people to become autonomo. The law is titled Ley de Reformas Urgentes del Trabajo Autónomo and has recently been approved.

The new tax laws include:-

• A standard flat rate social security payment of €80 per month for the first 12 months. This can then be extended for a further 12 months if earning less than the minimum wage (€1,260 per month).
• Up to 50% of petrol expenses can be claimed back.
• Up to 20% of electricity, gas and water costs can be claimed back if working from home.
• There will be smaller sanctions for freelancers who are late paying their social security payments.
• Autonomo's can claim up to €26.67 per day (Spain), €48.08 per day (if abroad) for food as an expense if you have to eat away from home while on business. Or €53.34 / day (Spain) and €91.35 / day (abroad) if overnight.

There is a calculator that you may use at the page below, which will determine how much you can deduct for electricity, gas and water usage based on the office space at home.
https://cincodias.elpais.com/cincodias/2017/07/11/midinero/1499784031_887851.html

Many people decide to employ an accountant to do their accounts for them. As a guide, an accountant in Spain will usually charge around 60 Euros per month to do this on a retainer basis. Their service will usually involve submitting quarterly and yearly tax and IVA returns on your behalf.

You can read more about filing your tax returns here https://www.healthplanspain.com/blog/expat-tips/306-how-to-file-an-income-tax-return-in-spain.html

De-registering or Winding up Your Business

The good news is that if you do end up having to wind up your business, your autonomo classification is simple to de-register. You just need to complete the forms you used initially to register - Modelo 36 or 37 in the case of the Agencia Tributaria and the TA 521 for social security.

Note that you are now able to download and install a digital certificate to help in everyday administrative tasks such as filing taxes. Learn more about digital certificates for Spain.

Private Health Insurance for the self-employed

If you are considering becoming self-employed here in Spain, you may want to consider taking out one of our great value private health insurance policies. Our policies are also ideal for those who are applying for a self-employed visa and meet all government requirements.

For a quick quote, please visit https://www.healthplanspain.com/sanitas/sanitas-health-plans.html