If you work for yourself in Spain, sooner or later you will hear the word autónomo. It is how Spain refers to the self-employed, both for Social Security and, in everyday language, for tax. Registering is not difficult, but it has an order, and the first steps decide what you pay in your first year.
Registering as autónomo is a short procedure. Doing it in the right order is what saves you money.
The reduced contribution for newcomers is requested at registration, not afterwards.
When do you have to register?
When you carry out a professional or business activity on your own account, personally and on a regular basis, with a view to earning from it. The law looks at whether the activity is habitual, not at a fixed income threshold. If you invoice clients regularly, you should assume that registration applies to you.
The steps, in order
A standard registration involves:
- An electronic certificate, so that you can deal with the authorities online.
- Registering your activity with the Tax Agency (form 036).
- A Social Security number, if you do not already have one.
- Registering in RETA, the Social Security scheme for the self-employed.
Once these are done, you can invoice with everything in place.
The reduced contribution for your first year
Spain applies a reduced monthly contribution to people who register as self-employed for the first time, or who have not been registered in the previous two years. It applies for the first twelve months and can be extended for a further twelve if your net income is below the minimum wage. It must be requested with the registration itself. For the current amount, check the figure in force at the date you register: it is set by law for each period.
The Community of Madrid has also subsidised this contribution during the first year, subject to available funds. The contribution is paid first and the subsidy is received afterwards.
Any questions?
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An example: registering a month too late
A consultant starts invoicing in March and registers in June, once someone mentions it. The months already worked still have to be regularised, and the conversation with Social Security starts on the wrong foot. Registered in March, the same person would have paid the reduced contribution from day one, with nothing to correct.
After the first year
From then on, the contribution depends on your net income, by bands, and is adjusted at the end of each year to what you actually earned. In parallel, you file quarterly VAT returns and income tax prepayments, and an annual income tax return.
Where Cigarrán fits in
At Cigarrán we handle the whole registration in English: certificate, tax registration and Social Security, including the reduced contribution where you qualify. After that, we keep your accounts and file your returns, so that your first year as autónomo starts in order.
Register once, and register well
Registering as autónomo takes very little time. Doing it at the right moment, and with the right requests, is what makes the difference.
If you are about to start working for yourself in Spain, let’s talk it over.
