# 20% tax deduction for new autonomos?



## ni68ana (Apr 4, 2016)

Hi all,
I'm thinking of starting off as an autonomo here in Spain. I was told by an asesor who I met with that when you first start off as an autonomo, you can deduct 20% from your gross income for tax purposes - in addition to your other expenses - in order to make it easier for you as a new entrepreneur. I think she said it applied for the first two years. Can anyone confirm this? I know there are social security benefits for new autonomos, but haven't been able to find any thing this 20% on income tax. 
Really hope it's true!
Thanks in advance for any advice


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## AllHeart (Nov 22, 2013)

ni68ana said:


> Hi all,
> I'm thinking of starting off as an autonomo here in Spain. I was told by an asesor who I met with that when you first start off as an autonomo, you can deduct 20% from your gross income for tax purposes - in addition to your other expenses - in order to make it easier for you as a new entrepreneur. I think she said it applied for the first two years. Can anyone confirm this? I know there are social security benefits for new autonomos, but haven't been able to find any thing this 20% on income tax.
> Really hope it's true!
> Thanks in advance for any advice


I think you're thinking of a reduction in the autonomo taxes that you're supposed to contribute monthly. Here are the reductions you may be eligible for:

_*Lower rates of autonomo social security*
While exemption from social security is very rare, there are some autonomos who pay less than the normal minimum. Some of these situations are as follows:

> Autonomos that are less than 30 years old (men) or 35 years old (women), receive a discount of 30% on the minimum contribution for the first thirty months.

> New autonomos that have not been registered as autonomo in the past five years may alternatively apply for a discount of 80% for six months, followed by 50% for six months, followed by 30% for three months. For those below the age of 30 (men) or 35 (women) the 30% discount is also extended for a further 15 months.

> Women returning to autonomo following a maternity break are be entitled to a 100% deduction of the minimum social security payment for 12 months.

> People who work "venta ambulante" (literally means peddling, but in reality normally refers to people who work on market stalls and similar) can chose to pay a lower rate of social security.

> There is a also a regime for people who work on their own account in agriculture who pay a specially reduced rate. You have to be registered as such and show you have been working and been paid by official agricultural employers to get this. You cannot just claim to be an agricultural worker by virtue of working on your own land."_

From here: Guide to Spain's autonomo system


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## AllHeart (Nov 22, 2013)

I wonder if there is some sort of subsidy in Zaragoza that the person is talking about? Here are some subsidies available in Spain:

Subsidies for newly self employed autonomos

Perhaps you can ask the person who told you about this 20% reduction in income tax as to what they mean?


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## snikpoh (Nov 19, 2007)

The first thing to note is that it is NOT a tax. As @Allheart states, it's your social security contribution.

You have to pay tax in addition to the SS contribution.


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## ni68ana (Apr 4, 2016)

AllHeart said:


> I think you're thinking of a reduction in the autonomo taxes that you're supposed to contribute monthly.


Thanks for your response. 
You mean the periodic contributions during the year that are fixed at 20%? That's not what I meant, I understand that anyway those are just estimates and need to will be adjusted at the end of the year
The asesor I spoke to mentioned this in a separate discussion about the annual calculation, saying that 20% would be deducted on top of all my other deductions, as a new entrepeneur.


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## ni68ana (Apr 4, 2016)

snikpoh said:


> The first thing to note is that it is NOT a tax. As @Allheart states, it's your social security contribution.
> 
> You have to pay tax in addition to the SS contribution.


I know, my question was about the tax, not about the lesser social security that can be paid in the beginning.


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## AllHeart (Nov 22, 2013)

ni68ana said:


> Thanks for your response.
> You mean the periodic contributions during the year that are fixed at 20%? That's not what I meant, I understand that anyway those are just estimates and need to will be adjusted at the end of the year
> The asesor I spoke to mentioned this in a separate discussion about the annual calculation, saying that 20% would be deducted on top of all my other deductions, as a new entrepeneur.


In my first post, I explained the reductions in monthly autonomo contributions. 

In my second post, I said there are subsidies for some autonomo and suggested that perhaps a subsidy is what the person (asesor) is talking about when talking about reduction in income tax. I suggested that you should ask them, since I've never heard about this. 

What is your asesor by profession - a lawyer, gestor, accountant, economist....?

P.S. Periodic (monthly) social security contributions are not fixed at 20%.


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## snikpoh (Nov 19, 2007)

ni68ana said:


> I know, my question was about the tax, not about the lesser social security that can be paid in the beginning.




Social Security payments are not "paid in the beginning" they have to be paid monthly and are a fixed cost and are not a percentage of earnings or profit.

Personally, I wouldn't say they were "lesser" either.


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## AllHeart (Nov 22, 2013)

snikpoh said:


> Social Security payments are not "paid in the beginning" they have to be paid monthly and are a fixed cost and are not a percentage of earnings or profit.
> 
> Personally, I wouldn't say they were "lesser" either.


"Paid at the beginning," as in paid at the beginning of being autonomo (new autonomo). 

"Lesser,"as in the reductions I showed that are reduced for new autonomos.

I'm saying the same thing in the P.S. of my last post, that autonomo fees are a fixed rate, not a percentage of earnings.


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## Barriej (Jul 23, 2012)

Taxes for freelancers and the self-employed in Spain | Finance | Expatica Spain

Try the link above. It explains some of the tax implications. But I would be visiting a professional tax adviser, and a Spanish one at that, just to make sure.

As to claiming personal expenses, you cannot even legally do that here. The only way you could pay your rent, mortgage etc, would be to start a limited company and be an employee. You can pay yourself as much as you like (you will still be liable for personal tax on your wages and business tax on any profit)

If the 20% you are referring to is, the one I think. Then it's the quarterly payment to the tax office. If you are sensible (as I've tried to be) you would be putting an amount equal to your tax rate away every week, month, whatever to cover your possible tax bill.

The 20% is not a benefit, it's a payment due on account and if you invoice businesses instead of dealing with the public, the system is different again. At the end of your trading year you would pay any extra or get a rebate. Well that's how it was explained to us when we looked at a business in Spain. 
And don't forget the Spanish vat. There is no minimum trading level as there is here, you pay (charge) it on all your sales.

Although for us the costs involved compared in running a business to the UK out weighed the benefits of moving to Spain at the moment.


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## Williams2 (Sep 15, 2013)

ni68ana said:


> Hi all,
> I'm thinking of starting off as an autonomo here in Spain. I was told by an asesor who I met with that when you first start off as an autonomo, you can deduct 20% from your gross income for tax purposes - in addition to your other expenses - in order to make it easier for you as a new entrepreneur. I think she said it applied for the first two years. Can anyone confirm this? I know there are social security benefits for new autonomos, but haven't been able to find any thing this 20% on income tax.
> Really hope it's true!
> Thanks in advance for any advice


Not sure whether the same is true in Spain but in the UK there tends to be greater tax benefits, setting yourself up as a Limited Company, as even Freelancers are eligible to get Limited Company Status.
So you can claim all manner of tax deductible expenses on items like business trips, company car, computers, 
etc, etc, etc.

Also in the UK there are Freelancers who choose to use Umbrella Companies, which negates the need to keep your own accounts and use the services of an Accountant. The Umbrella company does it for you.

Again not at all sure whether there are such things as Umbrella companies in Spain !!


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