# How much income tax to pay as autonomo?



## fishwebby (Aug 11, 2010)

Hi,

I've recently become autonomo in Spain, and although I've got an accountant to do all the finance for me, I'd love a second (or more!) opinion on the whole tax thing.

I've got a contract (as a computer programmer) with a company for a few months, and they have agreed to pay me €2665.45 a month.

So I invoice them like this:

Subtotal €2665.45 (the amount on my contract)
+ IVA (18.0 %): €479.78
- IRPF (-7.0 %): €-186.58
Total: €2958.65

Ok. So this is how I understand it - the VAT I keep and pass straight through to the nice tax man. I also pay €251.70 a month to social security.

So basically what I want to know is how much I get to keep at the end of the month. My accountant tells me that this would be €2958.65 - €251.70 - €479.78 = €2227.17 (taking into account that the VAT is paid quarterly - I'm putting it aside into a different account).

What about income tax? In the UK I used to pay 20ish percent or something like that. My accountant tells me that the IRPF that the company retains for me I'll get back next year when I do my tax return. So I don't pay tax then? That's what I don't quite understand - I'm sure I'd have to pay something like 20-odd percent income tax on what I earn.

Basically all I want to know is how much of what the company pays me is mine and that I'm not going to get a nasty surprise next June when I do my "declaration of the rent" ;-)

I would be extremely grateful if someone more knowledgeable than me could shed some light on the subject!

Many thanks
Dave

P.S. would being married and having a mortgage make a difference to the tax situation?


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## Xose (Dec 10, 2008)

fishwebby said:


> Hi,
> 
> I've recently become autonomo in Spain, and although I've got an accountant to do all the finance for me, I'd love a second (or more!) opinion on the whole tax thing.
> 
> ...


Any idea why you're holding the IRPF. As I understand it, the company would keep the IRPF when they pay your invoice and submit it with your reference. This is called "retencion" and as far as I am aware, it is kept from the invoice payment to the autonomo, not by the autonomo. Also, again so far as I know, it's 15% retencion.

As for your "normal" tax, in june you will end up with a sum to pay, though usually that's not too bad due to the above 15% held back and submitted for you by the company you invoice. Depending on whether you and your wife do a joint declaration, you have an allowance, much like the UK, of individual or joint (joint is less than 2Xsingle). Then kids, mortgages, legit business expenses etc kick in and you end up with a balance. If your accountant is any good, the tax man will end up paying you what with all that paper, ink cartridges, electricity (working from home?!) etc., etc.

Any profit after the above is calculated will be subject to, as you say, 20ish percent.


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## fishwebby (Aug 11, 2010)

Hi, thanks for your reply. Sorry, I must have explained it badly - the company is keeping the IRPF, not me. It appears on the invoice that I give them but it's money that they keep.

So I do have to put aside 20ish percent to pay in June. I suppose I won't find out how much that is until then, as I'll have expenses up to the end of the year that I won't know about. So if I put aside say 25% until June, then worst case scenario is that I have to pay all of it to the nice taxman, but probably not, just a part of it. I'll raise this with my accountant as he's said on more than one occasion that after I've paid VAT and social security, the rest of the money is mine (which if I had believed him I would have got a potentially nasty shock in June)...

Many thanks
Dave


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## Guest (Sep 6, 2010)

You are paying the reduced IRPF rate which you are entitled to do for the first few years. However, if you can afford it, there is no reason to do this as you still have to pay the tax at the end. Much simpler to budget by paying the normal 15% rate. Since being autonomo for almost four years now I have never had to pay any additional tax (mainly due to all my clients being SLs and so I can apply the retencion)


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## fishwebby (Aug 11, 2010)

Ah ok, thanks for the advice, I'll talk to my accountant about it. So if I invoice a client who isn't an SL, then there is no retention then (and I'd have to pay tax in April)?


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## Guest (Sep 6, 2010)

Yes, you can only apply IRPF to companies, not indivduals

Tax can also be split into two payments (2nd is in November iirc) so shouldn't be a huge shock when you do your tax return!


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## fishwebby (Aug 11, 2010)

Good to know, thanks!


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