# Being Autonomo in Spain



## robinspain (Mar 25, 2010)

HI, 
First post here so heres hoping for some good sound advice.
I work for a uk Based company as a "consultant" and am paid a monthly amount into my spanish bank account which covers my consultancy fee, and any expenses i incur doing my job, such as petrol, phone etc.
I basically fed up of paying Accountants here large ammounts of money for bad advice and so want to start to dela with Hacienda myself and to my own tax return.

Im trying to find out how much income tax, or IRPF i need to pay, anyone have any ideas? I know its based on the amount i earn, but not sure of the % involved.

Also , i do not charge vat/iva on any of the invoices i send to the UK each month, which i beleive to be correct, does anyone have any ideas on this??

I am trying to achieve what i guess most people want to do,which is to pay the least amount of income tax that is legally possible, so any advice would be appreciated.

Thanks
Rob, in spain


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## Pesky Wesky (May 10, 2009)

robinspain said:


> HI,
> First post here so heres hoping for some good sound advice.
> I work for a uk Based company as a "consultant" and am paid a monthly amount into my spanish bank account which covers my consultancy fee, and any expenses i incur doing my job, such as petrol, phone etc.
> I basically fed up of paying Accountants here large ammounts of money for bad advice and so want to start to dela with Hacienda myself and to my own tax return.
> ...


I think it's really expensive to be autónoma in Spain, but I suppose it depends on your income! I have to pay 260€ euros a month I think it is and also 15% IRPF. It's less (7% I think) for the first 2 years.


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## chris(madrid) (Mar 23, 2008)

I'd suggest you look up the local Camara de Comercio (chamber of commerce) and have a chat. Also - whilst this may sound odd - Hacienda (here anyway) are quite good at advising. 

The overseas VAT charging DEPENDS if the other party has a VAT number.


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## Keidik (Nov 26, 2008)

Hi Rob

I' m autonomo is Spain too and I pay about 250€ a month social security and then there are two taxes. The regular tax which I pay every 3 months (I'm not sure of the percentage of that) and then income tax, or 'renta' which is paid once a year. That is tax on any income received from savings, property rentals, etc... To bring down my income tax I pay off some of my mortgage each year (in December) and that payment counts against income tax, so I don't pay any. For the quarterly tax get a factura (not just a receipt) each time you fill up your petrol tank and make sure it includes your nie number and name and address, also get facturas for phone bills, internet, any flights you take, or hotels you stay in, printer cartridges and all that office stuff too...If you work from home you can even give in your electricity bill! 
So far as tax on Uk invoices, you're right about that. Don't add on the iva to those.
Hope that helps..

Keidi


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## Pesky Wesky (May 10, 2009)

chris(madrid) said:


> I'd suggest you look up the local Camara de Comercio (chamber of commerce) and have a chat. Also - whilst this may sound odd - Hacienda (here anyway) are quite good at advising.
> 
> The overseas VAT charging DEPENDS if the other party has a VAT number.


Do you go to the tax office in El Escorial who has the happiest and nicest security guard in Spain, and is famous all over the Sierra??


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## bakeja (May 26, 2009)

If you are based in Spain but invoicing a UK company for a service then you generally don't charge VAT but the transactions are not VAT free as such: the UK company is supposed to account for VAT at it's end but that is for them to sort out not Rob.

There are also exceptions to this general rule. The new VAT rules on cross border supplies of services are described here:

http://www.hmrc.gov.uk/VAT/ec-sales-lists.pdf

You will have to pay 20% tax on your income net of expenses every quarter. The 15% and 7% rates refer to the "retenciones" that Spanish business customers deduct from invoices of some autonomos. If your invoices have suffered retenciones (Rob's won't because they are not issued to Spanish businesses) your quarterly tax bill is reduced by that amount i.e. you don't pay 15% on invoices AND 20% quarterly. 

The quarterly tax operates like advanced income tax. Come the following year when you do your annual tax return (renta) any amounts paid quarterly the previous year are credited against your tax bill.

If your accountant gives you unlimited advice throughout the year, saves you tax, does all your quarterly and annual reporting (renta included) and keeps the accounting records you are obliged to keep, he is entitled to charge a reasonable fee. Some accountants have a flat monthly minimum rate which can seem high for the very simple autonomo situations with just a few transactions a month. We have a low entry level rate for these autonomos. 

Finally I put a video on You Tube called "autonomo basics" which covers the, er, basics. Good luck Rob.


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## Machiavelli (Nov 2, 2008)

So, let's say you teach guitar in Spain. You have a home/studio. Let's say you spend 2000 on music stuff/yr and you spend 700 on your home/studio/month. And let's say you make 35000 teaching. Plus you have the usual home/studio expenses such as heat, internet, telephone.

1) Would you have to register as an autonomo?

2) How much would you have to pay in tax and fees approximately? I asked a math question like this once before and nobody wanted to touch it


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## bakeja (May 26, 2009)

Machiavelli said:


> So, let's say you teach guitar in Spain. You have a home/studio. Let's say you spend 2000 on music stuff/yr and you spend 700 on your home/studio/month. And let's say you make 35000 teaching. Plus you have the usual home/studio expenses such as heat, internet, telephone.
> 
> 1) Would you have to register as an autonomo?
> 
> 2) How much would you have to pay in tax and fees approximately? I asked a math question like this once before and nobody wanted to touch it


Nice work this guitar teaching! You would have to register autonomo of course - there is a whole section of activities relating to Education (category 85 in the list of economic activities). Let's assume you make 3,000€ a month (!), pay social security of 250€ and have allowable expenses of 400€ a month (you can't assume all home rent, telephone etc is allowable) and pay your accountant 50€ a month. 

I will ignore the initial investment in equipment for simplicity but obviously most of this would be allowable as either expense or depreciation. I am also leaving out VAT which you will charge and then pass over to the tax office every quarter (less VAT on expenses). 

Looking at the ongoing situation you would be making 3000 - 400 - 250 - 50 = 2300 a month. You wouldn't suffer "retenciones" on your invoices because they are not to individuals. You would pay quarterly tax at 20% on the net income, approximately 1.400€ Your annual tax bill would be based on income of 2300 x 12 = 27600. Assuming you are single then you have a personal allowance of 5.151 leaving taxable income of roughly 22500 which would give a tax bill of approx 5.500 (the tax rate up to 17.707€ is 24% with the remainder taxed at 28%). This is roughly the same as the quarterly tax you would have paid already so your "renta" would probably not result in additional tax. All in all then you are paying the social security and tax of about 5500 a year.


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## Machiavelli (Nov 2, 2008)

1) 50 a month for my accountant! That sounds like nice work! 

2) I thought that there was some kind of autonomo monthly fee of 250 or so.


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## gus-lopez (Jan 4, 2010)

The social security or National ins. minimum payment for 'autonomo' is 250€ a month as bakeja said.


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## John Mac (Apr 14, 2010)

*Autonomo*

Can I ask all you Autonomo's a question please
I am in a similar situation, in that I am working as a consultant for one UK company. This was the best option for my company as advised by their Spanish accountants.
My problem is that (having a young family in Spain) if this company decided to end their activities in Spain then I would be left with no income and no unemployment benefit because I am an Autonomo.
How do the rest of you allow for this?.. is there an income protection type insurance I can take out for this in Spain? or is there an extra payment I can make to the social security to at least give me 80% of my salary for 3 - 6 months?
I would really appreciate any advice, thanks in advance.


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## robinspain (Mar 25, 2010)

Hi thanks for all ure responses,
I guess i should have made it clear that i have been here for 15 years working like this for the last seven, so i am prefft clued up, but like most folk, always looking to see if they have missed anything.
I do tend to count 20% retenciones and try and get as many receipts etc to count against my earnings.
Ive had various issues over the years with my differnt accountants, from being charged vat for 3 years on my earnings, and recently not being adviced of taxs i need to pay and thus incurring fines when not expetcing them
I agree if they give good valid advice they are worth the money, but if they dont there not.

Just regarding the last post, i dont think you have unemployment cover. what i have is a letter of employment with the company i represent in the uk. although this isnt a work contract it will give me some protection. Also if you end up working for the company for a along time, you will have proof that you have been basically "employed" by the comany in the uk which will help you should things go wrong

Regards,
Rob


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