If you are self-employed or a freelancer planning to work in Spain you will need to register as Autonomo in Spain and pay taxes and social security.  What is an Autonomo and what is involved in registering as Autonomo?

 What is Autonomo?

If you plan to work as a freelancer, self-employed or run an unincorporated small business you need to be registered as Autonomo in Spain. These small businesses must register and pay taxes as well as charge their customers IVA (VAT). Most businesses regardless of their level of income are obliged to charge IVA in Spain, although there are some exceptions. If you have an employment contract with someone else, then the autonomo rules do not affect you.

Who Should Be Registered as Autonomo?

The rules in Spain regarding autonomo status apply to anyone working for themselves even if the earnings are casual and small scale with very few exemptions.   Builders, headhunters, consultants and bar-owners or anyone running their own small business that invoices their customers are required to register themselves as autonomo.  So are people like those who sell at local craft markets.

Although being autonomo has a level of administration it is much lower than for the equivalent of limited companies.

Where you are working in a partnership of more than one individual you should use a “Comunidad de Bienes“, which is similar legally to autonomo. This does not create a legal entity separate from the participants so all of the partners remain fully liable for any debts.

How to Register as Autonomo

It is a two-step process to register as an autonomo in Spain:

1. You need to register with the tax office (Agencia Tributaria or Hacienda)

You will need to have obtained your NIE number and you will need to open a Spanish bank account. If you are not from a country within the EU you will also need to have a work permit.

You will need to register for the Impuesto sobre actividades económicas (tax for economic activities) at a tax authority offices. A list of offices with contact details by region is available through the Agencia Tributaria.

2. You must sign on to the autonomo social security system (Regimen Especial de Trabajadores Autonomosor RETA) within 30 days of registering with the tax authorities.  To join the RETA you will need to have registered in the social security system already.

You need to complete the Modelo 36 or 37 known as the declaración censal.  You will be given a personal tax certificate (Impuesto sobre la Renta de las Personas Físicas or IRPF).

When you sign on to the RETA you need to provide:

• a photocopy of your passport
• your NIE number
• your IRPF form
• the pages of your Modelo 036 or 037
• a completed application form

You may also need to show your Padron certificate.

For tax purposes, you will be either a sole trader (empresario individual) or independent professional (profesional autonomo). The tax and social security offices will require you to be classified based on the type of work you wish to carry out and each has its own code number.

Whether you will be paying IVA or not depends on the nature of the products or services that you are charging your customers for. Some products and services are exempt from VAT.

Social Security Contributions

You need to make the necessary social security payments to be able to access public health services, receive a pension or sick-pay or paid maternity-leave.  Different categories of employment result in different amounts of social security payment with higher contributions if your work is considered to be dangerous.

Note that any social security payments are tax-deductible.

If you want to access the Spanish state healthcare system, as a self-employed worker you will have to join a health insurance fund (mutua). These are organised through RETA and you will get a health card from the month you join.  The cover can include you and any dependent family members living at the same address.