Once you start to work as self-employed you acquire certain obligations. We are going to consider some of them for the common case.
Who needs to register?
Individuals over 18 who in a regular, personal and direct way carry out a commercial activity without subjection to a work contract.
This involves submitting the necessary forms to the Tax Agency (037) and Social Security Agency (TA0512). For this you previously need to have a NIE number along with a bank account.
- National Insurance Contribution. Minimum contribution: 275€/month. This is to be considered the standard as 80% of autonomos in Spain contribute this amount. (There are some reductions that may be applicable to new entrepreneurs.)
The minimum contribution varies depending on your age. You can also choose to contribute more for your pension and dole if you wish.
At the time of registration a direct debit is set up on your bank account. You have to contribute to the Social Security since day 1 of your registration. The first direct debit is taken from your account at the end of the first month of activity.
If you miss one payment, it will not be charged again on your account. In that case you need to go to the Social Security Office and ask for a pay-slip, which will include charges and interests.This is specially important for those with a reduction since, if delayed, they will be claimed the whole standard amount
TAX AGENCY (HACIENDA)
- Quarterly Reports and Tax Payments.
Self employed individuals are obliged to report, and pay if applicable, to Hacienda their revenue and balance of their IVA account.
You will initially have to pay 20% of each quarter profit against your future Income Tax Bill.
You will also report the balance of your IVA account and clear any positive balance using tax form 303.
Additionally, if you rent premises, you have to withhold part of the rent from the owner (retenciones) to pay his tax. This payment, 19% of the rent, has to be cleared quarterly too.
These reports and the resulting payment, if applicable, have to be done by the 20th of the following month to the end of each quarter. There exists the possibility to postpone the payment or arrange installments. See the most common must-remember dates in this table.
- Annual Reports
Some of the most common annual reports (declaraciones) that self employed have to submit are:
Summary of IVA. (Form 390)
RENTA (Income Tax Return),
Report on Rentals. (Form 190)
Report of clients and suppliers with whom your volume of business has exceeded 3000€ (form 347)
Report of clients and suppliers abroad (within the EU) (form 349)
These reports involve not payment, except the RENTA.
These obligations can vary depending on the tax assessment system you register under. In order to give you an idea we list here some of the most common.
- Issuing Invoice within 30 days after providing the service or delivering the item.
Related: What to include on an invoice
Among the information you have to keep in your books are: list of issued invoices , stating the tax information of clients, along with type of IVA applied and tax, list of assets and depreciation plans, list of expense invoices with tax information of suppliers and type of IVA applied.
- Documents should be kept for 5 years.