# Autonomo tax question



## AllHeart (Nov 22, 2013)

I've been going through the requirements to set up as self-employed/autonomo in Spain, and have a question that hopefully someone can answer... 

For the autonomo 'monthly fee' of 256 euros, is this considered income when calculating retirement income? Another way of putting this is, currently after 15 years of working, a person is eligible for the minimum Spanish pension, which is 50% of your earnings. Does the 256 euros count towards that calculation of earnings? Or is it excluded? 

Thank you in advance for anyone who might be in the know and willing to help.


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## AllHeart (Nov 22, 2013)

I know that's a tough question that I asked. I just wrote the Embassy of Spain in Ottawa Social Security Department. I asked them the question and will post their answer here, since I know there are some forum members that are autonomo who just may be interested in this answer.

So here's the question in English:
Hello. I am living in Canada and will move to Spain soon as a national. I plan to be autonomo in Spain. I plan to work in Spain for 15 years to qualify for Spanish pension. My question is if the monthly fee of 256 euros to be autonomo will be considered income when calculating my pension. Fifty percent of 256 euros (128 euros) will make a big difference. Thank you for your assistance.

Here's the question in Spanish:
Hola. Estoy viviendo en Canadá y se trasladará a España pronto como nacional. Tengo la intención de ser autonomo en España. Tengo la intención de trabajar en España durante 15 años para tener derecho a la pensión española. Mi pregunta es si la cuota mensual de 256 euros que se autonomo se considerará ingreso al calcular mi pensión. El cincuenta por ciento de 256 euros (€ 128) hará una gran diferencia. Gracias por su ayuda.

(I know it's probably a perfect translation, but close enough.)

I'll post the answer when I get it. Cheers!


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## baldilocks (Mar 7, 2010)

AllHeart said:


> I know that's a tough question that I asked. I just wrote the Embassy of Spain in Ottawa Social Security Department. I asked them the question and will post their answer here, since I know there are some forum members that are autonomo who just may be interested in this answer.
> 
> So here's the question in English:
> Hello. I am living in Canada and will move to Spain soon as a national. I plan to be autonomo in Spain. I plan to work in Spain for 15 years to qualify for Spanish pension. My question is if the monthly fee of 256 euros to be autonomo will be considered income when calculating my pension. Fifty percent of 256 euros (128 euros) will make a big difference. Thank you for your assistance.
> ...


What you are trying to say is: "Is the pension calculated on gross pay on net pay?"

AFIK it is calculated on your gross pay, i.e. before social security and tax are deducted, but don't quote me.


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## AllHeart (Nov 22, 2013)

baldilocks said:


> What you are trying to say is: "Is the pension calculated on gross pay on net pay?"
> 
> AFIK it is calculated on your gross pay, i.e. before social security and tax are deducted, but don't quote me.


Hi Baldilocks. "Is the pension calculated on gross pay on net pay?" Yes, that's exactly what I'm trying to say. This question would also include the question if my paid income tax are also used in the calculation. I'll ask them that once I get their answer.

What does AFIK mean? (Then I can understand your 2nd sentence.)


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## xabiaxica (Jun 23, 2009)

AllHeart said:


> Hi Baldilocks. "Is the pension calculated on gross pay on net pay?" Yes, that's exactly what I'm trying to say. This question would also include the question if my paid income tax are also used in the calculation. I'll ask them that once I get their answer.
> 
> What does AFIK mean? (Then I can understand your 2nd sentence.)


it should be *AFAIK

Internet Acronyms Dictionary
*


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## AllHeart (Nov 22, 2013)

xabiachica said:


> it should be *AFAIK*
> 
> *Internet Acronyms Dictionary*


Excellent link. Thank you. Saved to favourites.


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## baldilocks (Mar 7, 2010)

AllHeart said:


> Hi Baldilocks. "Is the pension calculated on gross pay on net pay?" Yes, that's exactly what I'm trying to say. This question would also include the question if my paid income tax are also used in the calculation. I'll ask them that once I get their answer.
> 
> What does AFIK mean? (Then I can understand your 2nd sentence.)


"As far as I know"; just as IMO is "In my opinion"; IMHO is "In my honest opinion"


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## AllHeart (Nov 22, 2013)

Baldilocks, that would be great if it is in fact calculated on gross income. I'll post the answer. Sorry for quoting you when you asked me not to.


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## AllHeart (Nov 22, 2013)

I forgot to post this... If you want to ask questions from of the Social Security Ministry, there is a contact form online. For some reason, they would not accept mine. I think it's because my Canadian phone # is not recognized as a correct phone #. They only allow six digits for a phone #, but Canadian numbers have seven digits.

So here's the link in case anyone else wants to use this (it's only available in Spanish):

http://www.seg-social.es/Internet_6/Lanzadera/index.htm?URL=3


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## xabiaxica (Jun 23, 2009)

AllHeart said:


> I forgot to post this... If you want to ask questions from of the Social Security Ministry, there is a contact form online. For some reason, they would not accept mine. I think it's because my Canadian phone # is not recognized as a correct phone #. They only allow six digits for a phone #, but Canadian numbers have seven digits.
> 
> So here's the link in case anyone else wants to use this (it's only available in Spanish):
> 
> http://www.seg-social.es/Internet_6/Lanzadera/index.htm?URL=3


Spanish numbers have 9 :confused2:


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## AllHeart (Nov 22, 2013)

Sorry, Xabiachica. My counting is off. First of all, it's early morning here. Then I can always rely upon the other excuses that I typically use: I'm female, I'm old and I'm blonde. 

We have 10 digits, and without the area code it's 7...

(123) 456-7890

So the online form asks for 9 digits.


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## AllHeart (Nov 22, 2013)

So I asked the Ministry of Employment and Social Security whether the 256 euros is considered as income in calculating retirement income, to which they said:

"Por supuesto que sus cotizaciones a la Seguridad Social se tendrían en cuenta a la hora de calcular su pension."

So this is a yes.

But then they said, 
"Además de la que nos menciona, también existe un tarifa plana de 50 euros mensuales para nuevos autónomos durante los primeros seis meses de actividad."

So I asked them to explain this 50 euros, to which they replied,

"La tarifa plana para autónomos consiste en el pago mensual de una cuota de 53,07 euros y está dirigida a nuevos emprendedores y con los siguientes requisitos y reducciones variables en los primeros meses de actividad:

No haber estado de alta como autónomo en los cinco años anteriores.
No emplear trabajadores por cuenta ajena
http://www.seg-social.es/prdi00/groups/public/documents/binario/142496.pdf
*Primeros 6 meses*: 80% de reducción de la cuota, con lo que con las bases y tipos de 2014 se queda en *53,07 euros*.

*Meses 7 al 12*: 50% de reducción durante el segundo semestre, que se quedaría en 2014 en *131,36 euros.*
*Meses 13 al 18*: 30% de reducción durante el siguiente semestre, que se quedaría con las bases y tipos de cotización de 2013 en *183,55 euros*."
I asked one of my Spanish-speaking friends to translate this, and he can't understand. Is it possible that someone here could help me understand this, please? I'd really, really, really, really appreciate your help. :fingerscrossed:


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## xabiaxica (Jun 23, 2009)

AllHeart said:


> So I asked the Ministry of Employment and Social Security whether the 256 euros is considered as income in calculating retirement income, to which they said:
> 
> "Por supuesto que sus cotizaciones a la Seguridad Social se tendrían en cuenta a la hora de calcular su pension."
> 
> ...


we've discussed this here before

basically you start off for the first 6 months paying 53.07€ a month
then for 6 months you pay 131.36€ a month
then for the next 6 months 183.55€ a month & then full rate thereafter

this is based on the current 'basic' autónomo payments - which vary according to age & other things

my payments are around 282€ a month - so if I was starting out now, I'd pay 56.40€ a month for the first 6 months (20%) , then 141€ for 6 months (50%) then 197.40€ for 6 months (70%) & then the full 282€ a month thereafter


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## Lynn R (Feb 21, 2014)

AllHeart said:


> So I asked the Ministry of Employment and Social Security whether the 256 euros is considered as income in calculating retirement income, to which they said:
> 
> "Por supuesto que sus cotizaciones a la Seguridad Social se tendrían en cuenta a la hora de calcular su pension."
> 
> ...


It means that (on condition that you have not previously had autonomo status during the preceding five years, or are working as an employee elsewhere as well as being autonomo) that for the first six months after registering as autonomo you would pay €53.07 (a reduction of 80% from the normal charge),then for the following six months you would pay €131.36 (a reduction of 50% from the normal charge) and for the six months after that you would pay €183.55 (a reduction of 30% from the normal charge).

After 18 months, presumably you would go on to paying the full rate.

Are you sure your friend speaks Spanish?


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## xabiaxica (Jun 23, 2009)

Lynn R said:


> It means that (on condition that you have not previously had autonomo status during the preceding five years, or are working as an employee elsewhere as well as being autonomo) that for the first six months after registering as autonomo you would pay €53.07 (a reduction of 80% from the normal charge),then for the following six months you would pay €131.36 (a reduction of 50% from the normal charge) and for the six months after that you would pay €183.55 (a reduction of 30% from the normal charge).
> 
> After 18 months, presumably you would go on to paying the full rate.
> 
> *Are you sure your friend speaks Spanish*?



I refrained from asking that


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## AllHeart (Nov 22, 2013)

You guys are awesome. Absolutely awesome. Thank you.

LOL! Yes, he speaks Spanish. He's from El Salvador.  What we were thinking is that this was fees on top of the 256 euros. We didn't clue in that they were talking about the 256 euros. That's a huge difference in fees. Yay! 

I also read on Advoco that new autonomos get a tax break for the first three years, where we only pay 9% taxes, 

"Spanish businesses and autonomos have to contend with a system of _retenciones _which has no equivalent in the UK. If Bill invoices another autonomo or company for his services they are obliged to retain a proprtion of the amount due to him and to pay it over to the tax office. The rate of retencion starts at 9% for new businesses rising to 19% in their third year. The retentions are not additional taxes but count towards the quarterly tax bill. If Bill had suffered retentions of 9% on half his invoicing (being work he did for businesses) this would amount to 405€ over the quarter. This would be deducted from the quarterly tax bill making it 849€ instead of 1.254€ i.e. he pays the same tax but the timing is altered."
Reference: Autonomo tax burden

So that's a great break too. Things are looking sunny here in Canada today. 

Thank you so much for your help!


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## littleweed (Sep 20, 2013)

AllHeart said:


> I've been going through the requirements to set up as self-employed/autonomo in Spain, and have a question that hopefully someone can answer...
> 
> For the autonomo 'monthly fee' of 256 euros, is this considered income when calculating retirement income? Another way of putting this is, currently after 15 years of working, a person is eligible for the minimum Spanish pension, which is 50% of your earnings. Does the 256 euros count towards that calculation of earnings? Or is it excluded?
> 
> Thank you in advance for anyone who might be in the know and willing to help.


Hi, 
Eligibility to a Spanish pension is not based on your earnings - there is no connection between the two. The 256 euros is a contribution to the Spanish Social Security - a form of social insurance which will pay you a pension and also unemployment benefit. provided you meet the eligibility criteria). Fraid I can't give you the exact figures but the 256 euros paid over around 44 years (full working life) would give a final annual pension of around 9000 euros. If you want more pension you can pay in more to the system - the 256 euro figure is the minimum. The catch is if you are a non-EU citizen you must get a minimum of 15 years in otherwise you lose your contributions - no pension.

Hope this helps


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## AllHeart (Nov 22, 2013)

littleweed said:


> Hi,
> Eligibility to a Spanish pension is not based on your earnings - there is no connection between the two. The 256 euros is a contribution to the Spanish Social Security - a form of social insurance which will pay you a pension and also unemployment benefit. provided you meet the eligibility criteria). Fraid I can't give you the exact figures but the 256 euros paid over around 44 years (full working life) would give a final annual pension of around 9000 euros. If you want more pension you can pay in more to the system - the 256 euro figure is the minimum. The catch is if you are a non-EU citizen you must get a minimum of 15 years in otherwise you lose your contributions - no pension.
> 
> Hope this helps


Hi Littleweed. Thank you for your comments. I think you may have misunderstood what we're talking about here. 

After the minimum of 15 years of contributions to pension (which is my plan), pension is calculated as 50% of my earnings. My question was whether the 256 euros that is the monthly autonomo fee is counted as part of my earnings in calculating my pension. The Ministry of Employment and Social Security said yes.

I believe the minimum of 15 years is for both Spanish citizens and EU citizens who are residents working in Spain (and maybe even Spanish residents/new citizens from other countries). But I'm not sure about that. I'll be moving to Spain as a Spanish citizen, so that's the context I'm looking at the pension plan. 

I hope that's a little clearer now. Again, thanks for your comments.


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