Our service will clarify any questions you have about your tax obligations as a freelancer, professional or entrepreneur.
A freelancer in our country has a number of tax obligations; the first is to register in the census of businesses, without doing so Social Security will not allow you to register in the Special Scheme for Freelance Workers (RETA).
Steps to resgister as self-employed
To register in the census of businesses, you must submit the model 036, or in its defect the model 037, which is the simplified version of the first form in the case that one meets the requirements established by it.
With this census declaration, for the sake of economic activities in Spain, claims to be taxable Business Tax (IAE), but nevertheless, as an individual, is exempt from submitting a tax return for themselves, so that the only obligation regarding this tax is to register, and doesn’t require to present any subsequent statement by it.
Once registered as Self-employed, you must pay for two main taxes: income tax and VAT, and submit, if they meet the requirements, the corresponding information returns
The main tax obligations as Freelance are:
Income Tax of Individuals (IRPF): Annual statement model 100
In the event of Income Tax of individuals (IRPF), the frequency of tax returns varies depending on the activity sector you have chosen, i.e. under the heading of IAE (Business Tax) In conformity with the register in the census.
In the case of a professional activity (Second section in the list of headings in Business Tax (IAE) and performing deductions in at least 70% of revenues billed in the previous year, its obligations under the Income Tax of Individuals will be annually, submitting a yearly statement of income, the model 100, within the deadline set for it, which covers from April to June each year.
Income Tax of Individuals IRPF): Quarterly declarations, model 130
In the event that the activity is a business (first section in the list of headings in Business Tax (IAE), or whether you are a professional, and during the previous year you did not perform the deductions in at least 70% of billed revenues, as wells as the statement of annual income stated previously, you must submit quarterly statements, using the model 130.
The deadline for submitting them is quarterly, submitting them between the 1st and 20th of the months of April, July and October, with a longer period between the 1st and 30th, in the case of January.
You must remember that, although the result of the quarterly statement is negative, you still must submit the declaration, since otherwise they might punish you for not presenting it or, where appropriate, do so later.
In the event of performing just as many professional activities as business, i.e. you are registered in more than one heading in Business Tax (IAE) you must submit quarterly statements in any case, still and fulfilling the requirement that 70% or more revenue from the previous year have been withholding, since submission is mandatory whenever you are registered in a business heading, regardless of income earned by such activity.
Value Added Tax (VAT): Quarterly declarations, model 303
In terms of VAT, you have to submit quarterly declarations as well as an annual overview.
The quarterly declarations, presented by the model 303, will collect both the amount of VAT paid during the calendar quarter to which they relate, as well as output tax, offsetting each other and resulting in the declaration to pay or offset in subsequent quarters, being able to request in the last quarter return in the case of VAT endured more impact than output tax.
Every quarterly declaration comprises of a natural quarter, and its deadline for submission begins on 1st of the following month and ends on the 20th in the case of the second, third and fourth quarters, and 30th in the first case, i.e. declarations must be submitted from the 1st to 20th April, July and October and from 1st to 30th January.
Remember that in the event that the result of the declaration is to deposit and you want to do a direct debit payment, the period for submission is 5 days before, the 15th April, July and October and 25th in January.
Value Added Tax (VAT): Annual overview, model 390
Additionally, along with the model 303 for the last quarter, you must submit the annual overview VAT with the model 390, which will collect all the accumulated VAT during the year and which should coincide with the quarterly partial statements made by the four models 303 for that year.
Declaration of withholdings and deposits into account: Quarterly statement, model 111 and annual overview model 190
In the event of having employees in your charge, or you provide professional services that perform deductions on your invoice, you must submit them monthly or quarterly, according to the model 111, and an annual summary of withholdings and payments on account with model 190.
Along with the presentation of this model, you must carry out in the Tax Agency corresponding entry to income tax withheld on invoices received.
Annual statement of transactions with third parties: model 347
In the event that the sums of the operations that have been made with a third party exceed € 3.005,06 during the year, you must additionally submit the appropriate information deduction to the model 347.
The submission is in February and must only be performed if the condition of having carried out transactions with a third party for more than the stated amount is met.
Summary statement of intra-Community transactions: modelo349
In the event that within your activity you will make deliveries or acquisitions of services with other States of the European Union, you must submit the model 349.
The periodicity of presenting it depends on the level of intra-Community transactions:
It must be submitted annually in the event of the total amount of supplies of goods and services during the previous year is less than 35,000 Euros or if during the same period the total amount of intra-Community supplies of goods does not exceed 15,000 Euros.
In the event that deliveries of goods and provision of annual services are higher than the figures stated above, but does not reach the monthly 50,000 Euros, you must submit model 349 quarterly, quarterly between 1st and 20th April, July and October and between 1st and 30th January.
In the event of reaching any of the months, or in the previous four quarters 50,000 Euros in deliveries of goods and provision of intra-community services, the presentation will be monthly between the 1st and 20th of the following month, except the month of July where the deadline for submission will be extended until September 20th and December where the presentation may take place until 30th January.
Declaration of withholdings and account for rentals: Quarterly statement model 115 and Annual Overview, model 180
In the event of income from the lease satisfies your needs, or in the case of subleasing in urban real estate, it is your duty to perform the deductions in such payments unless the lease concerned is housing paid by the company for employees, that rents you satisfy are less than 900 Euros a year, which rents are paid to totally exempt from tax on corporate income tax or if your activity is precisely the leasing of properties, being registered in the IAE in the heading of its own.
The declaration must be submitted quarterly with the model 115 from 1st to 20th January, April, July and October.
Additionally, annually, at the same time you present the model 115 with the statement in the last quarter that is from 1st to 20th January you must present the model 180 in which the annual summary of withholdings for rents and identify the annuitants.
Withdrawing from the census of businesses, model 037
Finally, at the time you consider withdrawing yourself as self-employed, you must remember to resubmit the model 036, or possibly a simplified version of the model 037 which you must terminate your registration in the census of business, and thus notify the tax office that you are no longer self-employed and therefore have no obligation to submit tax returns related to this scheme.
Below are actual sample queries, about taxation and taxes of freelance in Spain
1.- Can I submit Invoices for materials related to my activity if I am paying VAT and get returns?
The objective VAT System is incompatible with possible deductions. No, nothing can be deducted.
2.- What is the tax amount that must be added to invoices sent to Hungary?
Hungary is an EU country. To be identified in an EU country, the Spanish taxpayer must make an intra-free invoice. Therefore VAT. But it's necessary that the Spanish taxpayer is enrolled in the ROI.
3.- Is it possible to invoice a Company with an individual’s ID without being registered as Self-employed, but having a contract being employed in other activities? In the case that it is possible, how do we proceed and what procedures or added restrictions are implicated (maximum billing, it must be declared, etc )?
Regarding the Tax Agency (Hacienda), you can’t make any economic activity without being subject to this taxation, especially income tax (IRPF). There are exceptional cases where an invoice is allowed without being registered in the Tax Agency system for volumes of very low or insignificant annual business, and only for certain activities. In regards to the Social Security Fund (TGSS), if the work is "sporadic", THERE IS NO NEED TO REGISTER in the Central Tax Agency (AEAT). The standard rule does not specify the exact consideration of the term "sporadic". The rule establishes that only once YES is; and therefore would not need to register because it is an unusual and sporadic activity. Regarding the obligation to issue an invoice, this is compulsory in all cases and as a first step it involves declaring that obligation through the model 036 or 037 at the Tax Agency (AEAT).
4.- I'm doing some work for a client in the Netherlands. Partly from home and partly at their office in the Netherlands.
It is my understanding that I should not invoice VAT to this client. I have this understanding because in 2010/2011 I also worked for a Dutch company in a similar situation and was advised by my gestor that VAT was not required on my invoices to the Dutch company.
Can you help my by:
a). confirming my understanding is correct
b). supplying me with the supporting legal explanation (in English)
c). informing me if any documents can be requested to support these invoices both for my clients administration as well as my own
d). directing me where to obtain such forms if applicable.
If there is anything else I need to know in relation to this matter I would appreciate it very much if you would inform me accordingly.
The VAT Act 1992 says:
Through the VAT Act a procedure that is basically declare the exemption for those supplies of goods are dispatched or transported to another Member State of the EU is built, it will be in that other State of destination where operation is subject to tax effectively.
For intra-Community supplies of goods are considered exempt from VAT, the Act makes a number of formal requirements intended to ensure compliance with the objectives that inspired the creation of this exemption. These requirements are:
- The purchaser of goods proving to be an entrepreneur or professional identified for tax purposes in a Member State of the EU other than the Kingdom of Spain.
Currently, the only way the acquirer establishes this condition is by displaying a special NIF, called Community VAT number, whose validity must be confirmed with the data base VIES (Vat Information Exchange System), accessible through the website of the AEAT.
- That it is established that the destination of the goods is a country of the EU. Dispatch or transport of goods from the territory of application of Spanish VAT to a country of the EU can be credited with any valid means of proof in law and, in particular, the following are allowed in any case:
If the transport is performed by the vendor or on his behalf by the corresponding transport contracts or invoices issued by the carrier. In these cases, it is desirable that the carrier detailing in your bill or in a separate note, the origin of the shipment, the destination and the goods to be shipped according to the bill of intra sale itself.
If the transport is performed by the purchaser or on his behalf, by the acknowledgment of the acquirer, the duplicate invoice stamped with the purchaser, copies of shipping documents or other proof of the transaction.
In the case of non-compliance with any of the requirements set out above, the Treasury could consider incorrect application of the exemption for intra-Community supplies of goods. If so, consequently, require the seller (Spanish businessman or professional) the amount of VAT is not charged to the purchaser nor have entered into the Treasury.
The Register of intra-Community operators is formed by the people or organisations which have a Spanish NIF-VAT assigned:
- Employers or workers who carry out intra-Community deliveries or acquisitions of goods subject to the Spanish VAT.
- Employers or workers who carry out intra-Community acquisitions of services for which they are taxpayers, due to inversion, and the employers and workers who carry out intra-Community services taxed in the destination Member State when the taxpayer is the recipient of these services.
The fiscal identification numbers attributed by the Spanish Administration will be part of the VIES.
The operator will not appear in the VIES cesus if he or she has not correctly filled in form 036 and, in particular, if he or she has not ticked box 582 requesting inclusion in the Registry of intra-Community Operators (ROI).
To check the VIES census, in the Tax Agency website (http://www.agenciatributaria.es), go to Electronic Office/ Procedures and Services (Information and Register) / Other services / VIES.
If you are a Spanish community operator, you may check the validity of the NIF-VAT number of other Spanish intra-Community operators without a user certificate; however, to check the validity of other non-Spanish intra-Community operators' NIF-VAT number, you will need to have an electronic signature installed in the navigator you are using (Electronic Signature: http://www.cert.fnmt.es).
Please remember that confirmation of the validity of a VAT number and of its conferring to a specific taxpayer is one of the evidences supporting exemption from the intracomunity delivery of goods or from VAT on the rendering of services due to its location in another Member State.