bob3

I have spoke to 2 different advisers in Spain,and read a lot of posts. The opinion seems to be split down the middle, half think self employed people in Spain have to pay the same tax as normal employed people, half think that the rate is fixed at 20% or similar.

Does anyone know what the actual situation is? I.e are there any autonimos out there?

Do you know what the self employed tax rate will be in 2013 and 2014?

Thanks!

Rosemary

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Rosemary

billgates

Don't you just get the same allowances as anyone else and then pay the standard rates of tax on the remainder?

That's what I have to do anyway.
IVA returns get filed quarterly, then an annual tax return in June detailing all income, less expenditure and allowances for family, etc. then the remainder gets taxed at whatever the current bands are set at.

That's what my gestor does but she's not very good at thinking outside the box.

cricketman

Yes exactly

Where bob3 might be confused is that you must pay a flat rate of 20% income tax every time you submit your income each quarter. But then all that gets revised at the end of the end of the year and you either get a rebate or have to pay more tax depending on how much you have earnt

IamStu

I was of the thought that you pay a fixed amount. Approx €250 per month. If you´re earnings don´t come to much you still pay this. If you earn a decent amount, you still pay this?
Then again, I think you have an option to do as above or pay a given percentage.

cricketman

No, you are confusing social security with income tax

You must pay a minimum of 250 euros per month in social security and then a minimum of 20% each quarter in income tax

IamStu

ohhh ... I´ll get my coat

billgates

That's right.
On top of your annual tax bill you have an extra 3000 euros for your autonomo payment, regardless of whether you end up actually paying any tax or not.

steviedeluxe

Not in the first 18 months of operation. First 6 months as an autonomo is 50 euros a month, then it's around 50% for the next 6 months and then it's 75% for the next 6 months. If I understand correctly what's been told to me.

IamStu

I believe that to be a very new scheme.

sam54140

this is the correct answer indeed but I still think there's an age limit ? not sure on that.
otherwise it was 250euros per month, whether you make EUR 1000 or 10000
a month and that's at least good. in other EU States, it can go much much higher...

the gvt wants people to become autonomos or create their own SRL
as they can't find a solution to the unemployment rate...

also all new businesses created since 1.1.2013 benefit of a low 15% income (corporate) tax up to EUR 300,000 income a year.
could be an alternative to just become autonomo and you are protected through your SRL or SA as long as you dont put much capital in it of course.
if you put EUR 20,000 in it, you are responsible up to that amount.
It's not that much more red tape than being just self employed and it helps separate better your assets, home etc and the company.
better to create the SRL for EUR 3.000 which is the law and loan money to your SRL...

as for the tax rate as self employed and employees (also remember as an employee if i am correct, you dont have to pay income tax unless you salary is more than EUR 22.000 a year but ask others here).
http://www.spainaccountants.com/rates.html

you can see again why an SRL might be wiser, especially if you make good profit... with the 15% tax rate for new companies created

make sure you find a good bilingual accountant. companies who help you create your business often provide such services.
but it can via your bank too. often good to have all from the bank.

I just googled "spain tax rate" and found that site. No affiliation with them but it looks interesting.

Fred James

That's not quite correct.

Everyone pays income tax but if you are employed it is deducted from your salary just like PAYE in the UK.

If your income is less than 22k and you have had the tax deducted at source then you do not have to make an individual tax return. However many people do so as the PAYE tax deducted may not be correct as it doesn't necessarily take into account some of the extra allowances that you might get.

bob3

So the answer seems to be that self employed pay exactly the same bands of income tax as employed people.

I don't quite understand this statement:

Because if you are self employed, all your income goes to you as personal income, you dont have to pay any corporate tax.

Basically, I can see no advantage to being self employed. You pay the same income tax, and you pay more Social Insurance (ignoring their starter offer of initially reduced amount), and have to pay a gestoria every 3 months to file tax returns. To offset these extra costs, you can claim some expenses such as maybe your laptop.

sam54140

imho since anyway you need a gestor even as autonomo unless you really are familiar with all the Spanish filings intricacies, an SRL allows you
to pay only 15% on profits, deduct a lot more in expenses imho, protects much better your assets, and you can take a minimal salary for yourself, so
you end paying the lowest tax bracket.
it all depends on the forecast profit also, the income you think you'll make I guess best to consult first a good accountant .
might be good to make a comparative table for X income-profit and see the ending tax amount you'd pay in both cases. imho.

bob3

Thanks for the great advice. However, I dont undestand this one. If you are self employed, you have to pay all your income as salary. Anything left over as "profit" gets taxed at 15%, then when you pay it to yourself later, you pay incometax on it so you pay tax twice. I cant see how this can be an advantage, unless someone knows how to take profit out of the company without attracting income tax. In the UK this used to be done with a limited company as dividends, but these are taxed in more or less the same way so are not much benefit.

Any ideas?