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Advice on being self-employed in Spain

Advice on being self-employed in Spain

Old Apr 30th 2016, 4:06 pm
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Default Advice on being self-employed in Spain

Hi,

I am looking for some advice on moving to Spain and becoming self-employed. My mum is retiring to Spain and would like me to go with her. I have recently started a small online business (been running for 4 months). Things are going well and hopefully will continue to grow but it is still early days.

The plan is to move over to Spain with my mum for 1 year and see how things go. If my business continues to do well and grow I will stay over there and if not I can return to the UK.

I have been researching what I would need to do to register my business and pay taxes, VAT etc. I must admit I am a bit baffled- either I am misunderstanding what I am reading or the Spanish system sounds slightly unreasonable.

Firstly I would like to say I never expected not to have to pay into the system. I expected to have to pay tax, VAT and the equivalent to our National insurance. On top of that I didn't expect to receive free healthcare and have already found private healthcare. I also planned to pay voluntary NI back in the UK to protect my pension.

So through my research I can see I will have to become a autonomos. I will pay 20% tax and this is paid every quarter. Then I will have to pay VAT yearly. This is all straight forward. But then I believe I have to register for social security within 60-90 days of registering as an autonomos and MUST pay 260 euros a month regardless of whether or not I actually make any money that month. This will entitle me to a pension after paying into the system for 15 years. One website stated that there is then an additional payment for healthcare???? This all sounds like A LOT- surely it should be income assessed. That being said I have no right to move to a country and then complain about how they run it.

Could someone please clear this up for me. Am I correct in thinking that by moving to Spain and having my own SMALL business I will need to pay the following:

1. Tax every quarter
2. VAT yearly
3. 260 euros social security a month
4. Additional healthcare

I would be so grateful for any tips, advice or shared experiences.
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Old Apr 30th 2016, 7:53 pm
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Default Re: Advice on being self-employed in Spain

Hi and a warm welcome to the Spanish forum on BE. Myself and Fred James are the moderators for the Spanish forums whilst BEVS moderates Europe. Moderators are there to ensure that the site runs smoothly within the rules of BE. This is so that members gain the information that they are looking for and find their experiences on the forums to be friendly and worthwhile.

Problems and complaints should always be addressed to a moderator who will look into the matter and deal with it efficiently and fairly. Our members who post in the Spain Forums are usually friendly and helpful with a wealth of knowledge about the issues of living in Spain. I hope that you enjoy your time participating in the forums.

Please let me know if you need any further help.

Rosemary
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Old Apr 30th 2016, 8:57 pm
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Default Re: Advice on being self-employed in Spain

Originally Posted by LJ84 View Post
Hi,



Could someone please clear this up for me. Am I correct in thinking that by moving to Spain and having my own SMALL business I will need to pay the following:

1. Tax every quarter
2. VAT yearly
3. 260 euros social security a month
4. Additional healthcare

I would be so grateful for any tips, advice or shared experiences.
You autonomo payment gives you Spanish healthccare in the same way that the Spanish get it, it's not free, you will have to pay something for any treatment etc you need, however it also does cover your spouse and children.

You will need at least a working knowledge of Spanish, and remember that Spanish electrics, plumbing etc are totally different to UK ones, you do not say what your business would be but if it anythng to do with construction then you need to train in the Spanish system to be licensed.

Last edited by mikelincs; Apr 30th 2016 at 9:00 pm.
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Old May 1st 2016, 9:56 am
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Default Re: Advice on being self-employed in Spain

LJ84
Your assumptions are correct


Autonomo payments from region to region vary but what you have quoted is roughly the minimum. However, there is a rebate system for new starters for the first 18 months
a. 0 to 6 months 80% discount


b. 6 to 12 months 50% discount


c. 12 to 18 months 30% discount


d. More than 18 months 0% discount full rate


Talk to an accountant


If you are paying autonomo all health care is covered even reduced fees for prescriptions - not sure what other treatments you would have to pay for mentioned by mikelincs other than dental or opticians




Electricity in Spain is the same as UK (230V & 50hz) just different plugs and sockets


Plumbing again just different connections
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Old May 2nd 2016, 11:57 am
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Default Re: Advice on being self-employed in Spain

Thank you. I just wanted to make sure I am aware of all taxes that need paying to ensure that I do everything legally and that I can actually afford the move.
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Old May 2nd 2016, 12:31 pm
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Default Re: Advice on being self-employed in Spain

Originally Posted by Tadd1966 View Post

Electricity in Spain is the same as UK (230V & 50hz) just different plugs and sockets

Hmmm, bit more to it than that! No such thing as a ring main in Spain, it's all radial.

Earth's work differently too - not all sockets etc. are earthed. Also, live and neutral get interchanged on a whim.
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Old May 2nd 2016, 9:38 pm
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Default Re: Advice on being self-employed in Spain

Did I miss something? OP said this:

Originally Posted by LJ84 View Post
I have recently started a small online business (been running for 4 months).
How did you guys get plumber or electrician out of that??

- Eric S.
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Old May 3rd 2016, 5:53 am
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Default Re: Advice on being self-employed in Spain

Originally Posted by Eric S View Post
Did I miss something? OP said this:



How did you guys get plumber or electrician out of that??

- Eric S.
We didn't but were just making a general comment as the OP had not stated what type of business, and a large number of expats moving to Spain want to do some sort of handyman work, plumbing, electrics, small building works. It was just an 'If' comment.
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Old May 4th 2016, 8:31 am
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Default Re: Advice on being self-employed in Spain

Just wanted to second what tadd1966 said RE: "Your assumptions are correct", the "rebate system", and the advice on "Talk to an accountant (or a good gestor)".

We've been looking into this recently (last 12 months) and talking to our friendly gestor and this is the current information that we have too.

I know what you mean about that fixed social security payment; it seems strange to us Brits that we have to pay a fixed - and not insignificant - amount regardless of whether we actually make any money or not, but you sound quite pragmatic and I believe that's the right attitude. I found it easier to swallow when I considered that, since any equivalent of "council tax" in Spain is likely to be far, far lower than what you pay in the UK, in the end (**overly-simplistic-view-alert...**) things probably balance out quite well - they are just different systems of collecting money.

FWIW We're in a similar boat - considering making the move and just trying to run all the numbers and see if we can do it or not. We wouldn't go back at the moment if it meant having to depend on work there - an online business is a great way to go, I reckon.

Sounds like you're well on the way - inform yourself, decide if you can afford it, be prepared to integrate, and if it's a YES then go for it! All the best!
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Old May 4th 2016, 9:06 am
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Default Re: Advice on being self-employed in Spain

Originally Posted by ados34 View Post
Just wanted to second what tadd1966 said RE: "Your assumptions are correct", the "rebate system", and the advice on "Talk to an accountant (or a good gestor)".

We've been looking into this recently (last 12 months) and talking to our friendly gestor and this is the current information that we have too.

Sounds like you're well on the way - inform yourself, decide if you can afford it, be prepared to integrate, and if it's a YES then go for it! All the best!
Hi and a warm welcome to the Spanish forum on BE. Myself and Fred James are the moderators for the Spanish forums whilst BEVS moderates Europe. Moderators are there to ensure that the site runs smoothly within the rules of BE. This is so that members gain the information that they are looking for and find their experiences on the forums to be friendly and worthwhile.

Problems and complaints should always be addressed to a moderator who will look into the matter and deal with it efficiently and fairly. Our members who post in the Spain Forums are usually friendly and helpful with a wealth of knowledge about the issues of living in Spain. I hope that you enjoy your time participating in the forums.

Please let me know if you need any further help.

Rosemary
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Old May 5th 2016, 6:33 am
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Default Re: Advice on being self-employed in Spain

Originally Posted by ados34 View Post
Just wanted to second what tadd1966 said RE: "Your assumptions are correct", the "rebate system", and the advice on "Talk to an accountant (or a good gestor)".

We've been looking into this recently (last 12 months) and talking to our friendly gestor and this is the current information that we have too.

I know what you mean about that fixed social security payment; it seems strange to us Brits that we have to pay a fixed - and not insignificant - amount regardless of whether we actually make any money or not, but you sound quite pragmatic and I believe that's the right attitude. I found it easier to swallow when I considered that, since any equivalent of "council tax" in Spain is likely to be far, far lower than what you pay in the UK, in the end (**overly-simplistic-view-alert...**) things probably balance out quite well - they are just different systems of collecting money.

FWIW We're in a similar boat - considering making the move and just trying to run all the numbers and see if we can do it or not. We wouldn't go back at the moment if it meant having to depend on work there - an online business is a great way to go, I reckon.

Sounds like you're well on the way - inform yourself, decide if you can afford it, be prepared to integrate, and if it's a YES then go for it! All the best!
Rents are also quite a bit cheaper, both commercial and residential. Bear in mind also that you can set the autonomo payment as a tax expense, so assuming you earn enough to make money, it's not so bad. Hard for those starting off of course - but as mentioned earlier there is the reduced rate start up scheme.
However bear in mind you are due for IVA (VAT) on whatever you sell - there is no equivalent to the UK 60k (or whatever it is now) allowance where you don't need to register and pay vat.
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Old May 5th 2016, 12:13 pm
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Default Re: Advice on being self-employed in Spain

Originally Posted by steviedeluxe View Post
Bear in mind also that you can set the autonomo payment as a tax expense, so assuming you earn enough to make money, it's not so bad. .
Are you talking about the social security payment, e.g. €260/mth? So if you have, say €10000 turnover in a year, you would only pay tax on €6880 (10000-3120)?

Originally Posted by steviedeluxe View Post
However bear in mind you are due for IVA (VAT) on whatever you sell
When you say "whatever you sell"... does this apply to any kind of turnover, not necessarily "sales of goods"? e.g. rental income if you rented something out, a concert payment for a musician etc.? An autónomo pays IVA on any kind of income?
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Old May 5th 2016, 3:20 pm
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Default Re: Advice on being self-employed in Spain

Originally Posted by ados34 View Post
Are you talking about the social security payment, e.g. €260/mth? So if you have, say €10000 turnover in a year, you would only pay tax on €6880 (10000-3120)?
That is my understanding, yes, unless anyone here has different feedback. It may be an idea to check with your gestor



When you say "whatever you sell"... does this apply to any kind of turnover, not necessarily "sales of goods"? e.g. rental income if you rented something out, a concert payment for a musician etc.? An autónomo pays IVA on any kind of income?
Liable for IVA on any income yes. But certain categories have different rates. For example teachers can get away with 0% and books and magazines have an IVA rate of 4% (or did). Again you will need to ask your gestor as rates can (and are) changed by the government in charge, especially if they need extra revenue.
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Old May 8th 2016, 7:25 pm
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Default Re: Advice on being self-employed in Spain

If you want to try Spain out for 12 months then you could always split the 12 months over two separate years, making sure you don't stay in Spain for longer than 6 months in any one year. That way you can remain registered as a UK business and not need to bother with the Spanish system (to begin with at least).
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