Self-Employement
General
Self-employed entrepreneurs in Spain have to comply with obligations and have to deal with taxes and social security contributions. The most important aspects are briefly explained here.
Income tax
The profits that self-employed people make fall in the ordinary progressive scale of income tax.
A statement of turnover and costs must be provided every quarter. Depending on the deductions (withholding tax) that have already been paid by customers on outgoing invoices, it is determined whether income tax should be paid.
When making the annual income tax return, the deductions made by customers and the payments made during the quarters can be settled. The difference must then be paid up or can be reclaimed.
VAT
If there is a VAT activity – a service or product on which VAT must be calculated – a VAT return must also be submitted on a quarterly basis. A summary declaration must be made at the end of the year.
Costs
Self-employed entrepreneurs in Spain must pay a monthly social security contribution (´cotización´). This is about 295 euros per month and includes a contribution to the health insurance fund to which the entrepreneur is entitled in Spain.
New entrepreneurs can claim a temporary discount on the monthly contribution. Mail us for more information.
Accountancy
Self-employed persons serve registers for keeping outgoing and incoming invoices in case of inspections. An accounting with journal entries per movement is not mandatory.
Taking care of obligations in Spain
Since the establishment of Euro Economics, our focus has been on providing services to international companies in Spain. We are also happy to support self-employed entrepreneurs in Spain if the conditions below are met. Only then we can be of added value.
• Your customers are located abroad
• You want to communicate in English
• You want to automate your administration as much as possible
In addition, we look at the growth potential of your company and how we can support you in this.
Some sectors, such as the hospitality and car industry, fall explicitly outside our consultancy practice due to specific regulations to which we are insufficiently attuned.
The advantage of the services of Euro Economics is that you have more time for your core business. We work with ultramodern software that gives you real-time insight into your finances from any computer or cell phone, and all you have to do is take a picture of your invoices, which automatically enters our system.
Local accounting office (‘gestoria’)
If we are not the right partner for you, we advise you to look for a well-known ‘gestoria’ in the municipality where you want to establish your business.
A ‘gestoria’ is an office that provides tax returns and formalities and knows the way in the Spanish bureaucracy. There are great quality differences. Naturally, a pre-selection can be made via internet (google):
• Does the website have a professional appearance?
• Can communication be made in English?
• Is international experience reported?
• Are they specialized on companies (or do they do ‘everything’)?
• Do several people work for each discipline?
• Is there not only a mobile but also a fixed number?
• Is it easy to make an appointment?
If an appointment is made, it is of course also important whether there is a ‘click’ and whether the quotation that is subsequently drawn up seems reasonably cost-effective. In this area, cheap sales can quickly prove to be expensive (problems with the tax authorities). We absolutely advise you to choose for quality.
More information
Do you want to know more, mail us, you will get an answer within a day.