Spain has become a popular destination not only for its stunning landscapes, rich culture, and excellent quality of life but also for its openness to remote workers and freelancers. Whether you're a digital nomad exploring new cities across the country or a local entrepreneur launching your own business, becoming a freelancer (autónomo) in Spain offers a flexible way to work independently and enjoy all that Spain has to offer.
Why is registering as a freelancer mandatory in Spain?
In Spain, to work legally, freelancers must follow a registration process with the Spanish Tax Office and Social Security. Also, for Digital Nomads under a Digital Nomad Visa, the freelancer registration is required to finish your relocation process. Here are the primary reasons why this process is required:
Legal Compliance:
Registering with the Tax Office and Social Security ensures that your activities are in compliance with Spanish law. This allows you to legally issue invoices, pay taxes, and contribute to the social security system.
Operating without registration is considered tax evasion and can lead to severe fines, back payments, and legal consequences.
Social Security Contributions:
Registration with Social Security means you contribute to the Régimen Especial de Trabajadores Autónomos (RETA), or Special Regime for Self-Employed Workers. This contribution provides freelancers with access to public healthcare, pension benefits, and unemployment support under certain conditions.
Social security contributions are mandatory for all freelancers, regardless of their income, and they must be paid monthly. In return, freelancers receive the same protections as other workers in Spain.
Why failing to register can lead to serious consequences
While it may be tempting to skip the formalities, operating as a freelancer in Spain without registering can result in serious repercussions:
Fines and penalties:
Freelancers who operate without registering are at risk of fines and penalties. These fines can be significant and may include back payments of both income tax and social security contributions.
Loss of benefits and protections:
Without registering, you won’t have access to healthcare, unemployment support, maternity/paternity leave, or retirement benefits. Additionally, any payments you make on behalf of your business may not be deductible if you’re not registered.
Loss of rights under the Digital Nomad Visa:
For Digital Nomad Visa holders, registration as a freelancer is essential to maintain visa compliance. The Digital Nomad Visa is designed to allow remote workers to live and work in Spain legally, but it requires you to fulfill certain obligations, including tax and social security registration. Failing to register can jeopardize your visa status, potentially leading to visa revocation and loss of residency rights.
Difficulty in conducting business:
Invoices from unregistered freelancers are not considered valid by Spanish law. Clients may be unwilling to work with freelancers who lack legal status, limiting your business opportunities.
Limitations on growth and expansion:
Registering opens doors to many opportunities, such as working with larger clients or applying for certain business permits and grants. Without registration, your potential to grow or establish credibility with clients can be limited.
Tax implications for freelancers in Spain
Freelancers in Spain are subject to income tax (IRPF) and VAT (IVA), and they should report their income and expenses quarterly.
Every quarter, you need to file your autonomo tax returns to declare and pay your taxes. The deadlines are:
1st Quarter: April 20
2nd Quarter: July 20
3rd Quarter: October 20
4th Quarter: January 30 of the following year
Missing any of these deadlines may result in interest, fines, or penalties. Setting up reminders or consulting with a tax advisor can help you stay on top of your obligations.
1. Income Tax (Impuesto sobre la Renta de las Personas Físicas, IRPF)
If you are a freelancer, you must pay IRPF on your global income, which is a progressive tax rate that varies from 19% to 47% depending on your income level and the region you live. However, quarterly you should report your income less expenses through Tax Form 130.
It allows you to pay 20% of your net income earned during the quarter as an advance payment on your annual income tax. These quarterly payments reduce the total tax owed in your final annual income tax return (Declaración de la Renta).
However, if 70% or more of your income is subject to withholding tax (e.g., income from certain professional services or contracts with Spanish companies that withhold taxes), you may be exempt from filing Form 130.
Then, freelancers are required to file an annual income tax return, between April and June for the previous tax year. Here, you’ll report your total income, expenses, withholdings and your advanced payments.
2. VAT (Impuesto sobre el Valor Añadido, IVA)
Freelancers providing services within Spain must charge VAT (IVA) on their invoices, typically at a rate of 21%. If you’re working with businesses outside Spain or within the EU under specific conditions you would apply no VAT but you should file your VAT returns.
Social Security contributions for Freelancers
Freelancers in Spain are required to contribute to social security through the RETA system. These contributions fund benefits like healthcare, disability, sick leave, and retirement pensions.
Monthly contributions:
Social security payments are typically made monthly. The amount depends on your chosen contribution base, with a minimum payment of €294 per month.
Under the new progressive system introduced in 2023, your contributions may eventually adjust based on income.
Sick leave and Maternity/Paternity benefits:
Freelancers have access to public health, sick leave and maternity/paternity benefits, but the benefits are generally lower than for employees.
After the third month of sick leave, coverage may be reduced, so private insurance can be helpful.
Setting up as a Freelancer (Autónomo) in Spain
Step 1: Register with the Spanish Tax Agency (Agencia Tributaria)
To legally work as a freelancer in Spain, you need to register with the Agencia Tributaria (Spanish Tax Agency).
Get an NIE (Foreigner’s Identification Number):
If you’re a EU Citizen, you’ll need your EU Citizen Registry Card, which is required for any legal, tax, and social transactions in Spain. If you’re a non-EU Citizen, you must have a valid residency permit to become a freelancer in Spain,
You can obtain your NIE at the nearest Extranjería office or Spanish consulate in your country.
Complete Freelancer Registration Form (037/036):
In Form 037, you will need to specify:
Identification data, such as your tax address and the place where you will carry out your activity.
A description of the type of activity you will perform and the Economic Activities Tax (IAE) code.
The start date of operations.
The applicable VAT regime.
The income tax estimation method you will use, choosing between: standard direct estimation, simplified direct estimation, or objective estimation.
Form 036 is the extended version of Form 037 and is used by self-employed individuals with special VAT regimes (other than those mentioned above in Form 037) or who perform intra-community operations or monthly VAT refunds.Most self-employed individuals will use Form 037 unless a special VAT regime in Form 036 applies. Submit Form 036/037:
You can submit the form online through the Agencia Tributaria website, or in person at their office.
Step 2: Register with Social Security (Seguridad Social)
Once you’re registered with the Tax Agency, you must also register with the Seguridad Social (Social Security).
Complete Form TA.0521:
This form registers with the Special Regime for Self-Employed Workers (Régimen Especial de Trabajadores Autónomos, RETA).
You’ll need your NIE, passport, address in Spain, Spanish IBAN in a Spanish Bank Account, and a copy of Form 036/037.
Choose Your Contribution Base:
Your social security contributions are based on a monthly contribution base, which depends on your average monthly income. This base can be adjusted, but it affects your monthly social security payments and your future pension.
In 2024, the minimum contribution base is around €960.60, which results in a minimum payment of approximately €294 per month.
Reductions (Tarifa Plana):
New freelancers may qualify for the Tarifa plana, which reduces social security payments for the first year to €80 per month. Gradual increases follow for the next two years.
How can we assist you?
Registering as an autónomo in Spain involves several steps, and understanding the process can feel overwhelming, especially if you’re new to the Spanish tax and social security systems. That’s where we come in! Here’s how we can make your registration process easy and hassle-free:
Complete Autónomo Registration: We handle the entire registration process for you, including registering with the Tax Agency (Agencia Tributaria) and Social Security (Seguridad Social). From gathering the right documents to submitting the necessary forms, we ensure a smooth start for your business.
Digital Certificate Assistance: A digital certificate can save you time and make many processes easier. We help you obtain your Digital User Certificate, guiding you through each step so you can manage your tax and social security obligations online.
Personalized Advice on Tax and Social Security Options: We provide guidance on selecting the right tax regime (direct or simplified estimation) and social security contributions based on your business and income expectations. Our goal is to ensure you’re set up in the most efficient way for your unique situation.
Avoid Common Pitfalls: From missed deadlines to incorrect classifications, many new freelancers face avoidable issues. We make sure you understand each part of the process, helping you avoid mistakes that could lead to penalties or unnecessary expenses.
Clear, Friendly Communication: Our team provides information in clear, simple language, and we’re always available to answer questions or address any concerns you may have. Whether you’re new to freelancing or experienced, we’re here to make your life easier.
Starting your freelance journey in Spain doesn’t have to be complicated. Let us handle the details so you can focus on what you do best – building and growing your business!
Why Choose Relocate Now?
Expertise in Spanish Tax Law: We have an in-depth understanding of the regulations and procedures involved. We keep up to date with the latest legal developments, ensuring that your taxes are handled in compliance with current requirements.
Stress-Free Remote Service: From the initial consultation to document submission, we take care of everything remotely, allowing you to focus on your move without worrying about complicated legal or administrative tasks.
Tailored, Client-Centered Approach: At Relocate Now, we treat every client as an individual. Your case won’t be handled with a one-size-fits-all approach. Instead, we adapt our services to your specific situation and ensure that you receive personalized attention throughout the process.
Transparent Pricing: We offer competitive and transparent pricing with no hidden fees. From the beginning, you’ll know exactly what services you’re paying for, ensuring peace of mind and confidence in the legal process.
Frequently Asked Questions
Do I need to pay taxes as a freelancer if I work with foreign clients?
Do I need to pay taxes as a freelancer if I work with foreign clients?
Yes, you are taxed on your global income as a resident in Spain. However, if your clients are outside the EU, you may not need to charge VAT. Feel Free to book a consultation with us for tailored and specific guidance.
Can I deduct business expenses as a freelancer?
Can I deduct business expenses as a freelancer?
Yes, many business expenses are deductible, including office supplies, travel costs, and professional services. You can deduct if are connected to your business. Keep receipts and consult with an accountant to ensure you claim all eligible deductions.
How often do I need to file tax returns?
How often do I need to file tax returns?
Freelancers must file quarterly tax returns for both income tax and VAT (if applicable), as well as an annual income tax return and VAT summary.
What happens if I miss a tax deadline?
What happens if I miss a tax deadline?
Missing a tax deadline can result in fines and interest charges. It’s important to stay on top of tax due dates, or consider working with an accountant to avoid penalties.
Do I have to pay social security if I only freelance part-time?
Do I have to pay social security if I only freelance part-time?
Yes, social security contributions are mandatory, regardless of whether you freelance full-time or part-time. However, you may qualify for a reduced rate under certain conditions.
Is there a minimum income requirement to be a freelancer in Spain?
Is there a minimum income requirement to be a freelancer in Spain?
No minimum income is required to register as a freelancer, but you must declare all income and pay relevant taxes. Even if your income is low, you still need to contribute to social security unless you apply for a temporary exemption.