Starting as an autónomo (self-employed worker) in Spain can feel overwhelming, but understanding the formalities and obligations for your first year can set you up for success—and even help you benefit from an additional year of the tarifa plana reduced social security contributions. Here’s what you need to know:

1. Registering as an Autónomo

Before you can start working, you need to register with:

• Agencia Tributaria (Tax Office): Submit the Modelo 036 or 037 to declare your economic activity and VAT (if applicable).

• Tesorería General de la Seguridad Social (Social Security): Register under the Special Regime for Self-Employed Workers (RETA).

You must complete these steps before issuing invoices or conducting any business operations. Failure to register on time can lead to fines.

2. Obligations During Your First Year

Social Security Contributions

Thanks to the tarifa plana, your monthly contributions to Social Security are significantly reduced:

• First 12 months: Pay a flat rate of €80/month, regardless of income.

• After the first year, you can extend the flat rate for one more year if certain conditions are met.

This benefit is available if you’re registering as an autónomo for the first time or if you haven’t been registered in the past two years (or three years if you previously used the tarifa plana).

Income Tax (IRPF)

Every quarter, you must:

• Calculate your net income (total earnings minus deductible expenses).

• Submit Modelo 130 to pay 20% of your net profit as an advance on your annual income tax.

Read:  How much tax will I pay?

Value Added Tax (VAT/IVA)

If your activity is subject to VAT:

• Charge 21% VAT on your invoices.

• Submit Modelo 303 quarterly to declare VAT collected from clients and deduct VAT paid on expenses.

Read:  Understand IVA, Retention and Income Tax. 

Bookkeeping

Maintain organized records, including:

• Invoices issued and received.

• Business expenses (with supporting invoices).

• Assets and their depreciation.

3. Additional Formalities to Keep in Mind

Annual Tax Obligations

• File the Modelo 100 for annual income tax.

• Submit Modelo 390 for an annual summary of VAT (if applicable).

Economic Activity Declaration

• If your transactions with a client exceed €3,000 annually, submit Modelo 347.

Social Security Adjustments

Starting in 2023, autónomo contributions align with net income. Regularly review your income and update your contribution base as needed.

4. Meeting Formalities to Extend Tarifa Plana

To extend the autónomo tarifa plana for an additional year, the following requirements must be met:

1. Net Income Below the Minimum Wage (SMI): Annual net income must be below the current SMI. For example, in 2024, the SMI is €1,323 per month over 12 payments.

2. Extension Request: The extension is not automatic; it must be requested before the first 12-month period of tarifa plana ends. The request is made through the Social Security’s Electronic Office, accompanied by a declaration stating that the expected net income will be below the SMI.

3. Compliance with Tax and Social Security Obligations: You must not have any outstanding debts with the Tax Agency or Social Security to qualify for the extension.

Practical Tips for Your First Year

1. Search for other grants: Many regional governments and chambers offer additional help or grants to cover the social security costs.

2. Claim All Deductions: Maximize your deductible expenses, including office supplies, phone bills, and business-related travel.

Read: What expenses can I offset against tax?  

3. Hire a Professional Accountant: Navigating taxes and obligations can be complex. A professional can ensure compliance and identify savings opportunities.

4. Plan for Tax Bills: Set aside at least 20% of your income for taxes to avoid cash flow problems.

Read:   How to estimate your quarterly result in Quipu

Limit provides administrative, tax, and accounting support to freelancers and businesses, helping them avoid common mistakes and maintain control over their operations.

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