We recently hosted an engaging webinar dedicated to freelancers interested in understanding what it takes to succeed as an autónomo in Spain.
The session was jam-packed with valuable insights that covered essential topics like the ins-and-outs of Spanish tax obligations for freelancers, the newly-popular Beckham regime, expert tips on thriving in Spain's freelance landscape and, of course, how Xolo’s services support autónomo’s journeys.
Here you’ll delve deeper into the webinar’s key points, and gain knowledgeable insights from these takeaways. We’ll also cover some of the audience’s most pressing questions, providing further clarity on what it means to go freelance in Spain.
As a tax resident in Spain, there are certain tax obligations you must meet. It's important to differentiate and clearly identify who manages taxes in Spain, as this may not always be obvious.
Taxes are handled by the Spanish Tax Agency, commonly known as Hacienda, or Agencia Tributaria (AEAT).
As a tax resident and freelancer, you’ll deal with two taxation types that depend on the nature of your activities: IRPF (income tax) and VAT (IVA in Spanish).
For income tax (IRPF), you must submit an annual report, where you include your worldwide income as well as your personal situation to determine your final tax rate as a Spanish taxpayer.
If you are engaged in a professional or artistic economic activity, you may need to make quarterly advance payments to the sum of 20% of your total profit. This 20% is not your final tax rate, as it's an advance payment to the Tax Office. You may also have withholding tax on your invoices, set at 7% for the first two to three years, and 15% thereafter. Like the advance payment, this withholding is not the final tax rate but rather a prepayment.
Regarding VAT (IVA), this is an indirect tax and is generally applied to everyone. You will add VAT to your sales invoices based on the recipient of the service. For example, if your client is a company based in the United States, you may not need to apply VAT on your sales invoices; however, this should be evaluated on a case-by-case basis. Additionally, you can deduct VAT on certain expenses as allowed by law—for instance, you may deduct 50% of VAT on fuel if your activity is not directly related to transportation, taxi services, or registered sales representation.
Below, you’ll find a summary table of the tax obligations and forms to be submitted, along with their respective filing periods:
Xolo keeps you updated on your obligatory taxes, by letting you regularly upload sales and expense invoices each month. Checking your reports forecast allows you to always maintain the right balance needed in your bank account prior to deadlines.
Let’s dive into one of the most interesting topics for expats: the Beckham Law and the regulations for digital nomads.
In 2022, Spain introduced a law commonly referred to as the "Start-up Law." In Spain, it's typical for new legislation to amend aspects of existing laws to adapt them to the latest regulations. The Start-up Law introduced several new measures:
To clarify, the digital nomad visa is an immigration status that allows you to live legally within Spanish territory, while the Beckham Law regime is a tax status applicable to those who become tax residents in Spain and meet specific eligibility requirements.
The Beckham Law offers beneficial tax treatment for individuals who have not been tax residents in Spain for at least the five years prior to relocating.
Main criteria: You must not have been a tax resident in Spain during the last five years to be eligible.
Under the Beckham Law:
While the Beckham Law is highly advantageous for many, it may not be suitable for everyone depending on your income level or personal circumstances.
You must apply within six months of registering with Social Security, while also confirming the year you become a tax resident in Spain. This year will be the first year the Beckham Law applies.
The law allows for the Beckham regime to apply for the year you become a tax resident and the following five years, totaling six years in practice.
You must submit an application to the Tax Agency (AEAT), including documents that verify your eligibility.
The Start-up Law expanded eligibility for the Impatriate regime, allowing more people to benefit if they meet the criteria. Currently, eligible cases include:
*ENISA is an organization that certifies the innovative nature of activities conducted in Spain.
If you’re curious to understand more about the Beckham Regime make sure to visit our detailed FAQ on the topic as well as this informative blog post.
The Tax Office hadn’t released the updated application form for new eligible cases until December 2023. This delay, combined with limited guidance for tax officers, has led to some unique situations throughout 2024. Here are some of the scenarios we’ve encountered:
Initially, the Tax Office approved these applications, but exclusions were issued a few months later. Why?
In some cases, applicants who were initially approved for the regime as teleworkers have not received any subsequent exclusion notices. This creates an uncertain situation, as these individuals rely on the initial approval. However, since no exclusion has been issued, the Tax Office may still request additional information and potentially revoke their status later.
For freelancers with an ENISA report, meeting all criteria for the Beckham Law regime, the application was straightforward, with no risk of exclusion—unless they no longer meet eligibility requirements in the future.
The Beckham Law, especially in light of recent changes, has generated substantial interest among expats and freelancers seeking favorable tax treatment in Spain. However, as with any tax regime, complexities and challenges have emerged due to evolving criteria, delayed administrative processes, and differing interpretations by the Tax Office.
For teleworkers, it’s essential to clearly understand the requirements, particularly the need for an employment relationship and Social Security registration under the General Regime. Freelancers should also be cautious, as initial approvals may be re-evaluated, potentially leading to unexpected exclusions. Meanwhile, those meeting criteria with supporting documentation, like an ENISA report, generally experience more straightforward outcomes.
Given the unpredictability in how the Beckham Law is currently administered, we recommend that applicants carefully assess their eligibility, understand the potential for exclusions, and stay informed of any policy updates from the Tax Office. Proper planning and awareness can help ensure that those eligible can fully benefit from this often advantageous regime.
Navigating the complexities of freelancing as an autónomo in Spain requires careful consideration of the tax obligations, social security requirements, and potential benefits such as the Beckham Law.
Recent changes and evolving policies highlight the importance of staying informed and proactive in your approach to business compliance. Whether you’re assessing the benefits of the Beckham regime, managing quarterly tax submissions, or evaluating the new digital nomad visa, thorough preparation is key to making the most of these options.
If you missed our live session, don’t worry––you can still catch up on all the valuable insights and expert advice! Watch the full webinar recording here.
With Xolo’s dedicated support for autónomos, you can manage your taxes, compliance and invoicing with absolute confidence. Don’t wait to establish your business.