At Xolo, we don’t want to see anyone in our community give up on their dreams. But whether you’re switching to a career contingency plan, moving abroad to explore pastures new, or taking an in-house job you just can’t refuse, we want to make deregistering as a freelancer in Spain as seamless as possible.
In this article, we’re going to cover the main reasons for leaving freelance life, provide a simple explainer of how to close a self-employed business in Spain, and explore how to avoid nasty surprises during and after the deregistration process.
Why would you want to deregister as a freelancer in Spain?
Just as the inspiration behind every business is unique, the reasons for deregistering as a freelancer (or autónomo, if you paid attention in Spanish class) are just as diverse. And one thing all of these reasons have in common — it’s really in your best interests to shut up shop. It will save you a whole host of bills, charges, and legal issues if you ever want to re-register in the future.
With that said, here are some common motivations that might lead you to deregister your business with the tax authority (Agencia Tributaria) and Social Security:
1. Financial challenges
Perhaps the most common reason, many freelancers find that the unpredictable income and the costs associated with running their own business can be overwhelming. If your outgoings consistently outweigh your income, it might be time to reconsider how you’re working in Spain.
2. Relocation
Scientists still haven’t found a reliable cure for the travel bug. And although Spain is awash with diverse cities and regions to explore, you might still want to deregister as a freelancer and continue your adventure in a new country.
3. New job opportunities
Even with the freedom and fulfillment that freelance life offers, sometimes a lucrative full-time job offer comes along that you just can’t turn down. If you’re transitioning back to a traditional employment role, you’ll need to go through the autónomo deregistration process first.
4. Changing business models
You don’t need to overhaul your entire business to deregister as a freelancer in Spain. We freelancers are adaptable and often shift our business model if it works out more profitable for us. For instance, you might partner with a larger firm or go full-time with your top client, which will likely involve leaving self-employment.
5. Personal or health reasons
It’s not something you particularly want to think about, but personal or health challenges can pop up out of nowhere and make the demands of freelancing untenable. In such cases, taking a break or shifting gears might be the best course of action.
6. Retirement
You don’t pay your freelance quota to Social Security for nothing. After a long and successful solo career, the time will come to hang up your hat and enjoy your twilight years in golden sunshine.
7. Taking a break
The Great Resignation didn’t come out of a vacuum. We really are living in strange times, and it can take a toll on us. That’s why some freelancers deregister to go on a sabbatical, whether it's to travel, study, or just take a breather, you can stop being self-employed in Spain then pick it back up after your break.
Whatever the reason, it's essential to ensure that the process of deregistering as a freelancer in Spain is done correctly. This way, if you ever decide to return to the world of freelancing, you'll be in a good position to pick up where you left off. And remember, whether you're thinking of starting, pausing, or ending your freelance journey, there are always resources and experts available to guide you through the process 😉.
What you need to know to deregister as a freelancer
First off, we have some good news for you: you can deregister as a freelancer without the Kafkaesque experience of going to a government office!
It’s also far easier than registering as a freelancer in the first place. But like with anything in life, it’s never as easy as you think it should be. To fully deregister with the Agencia Tibutaria and Social Security, you need to meet the following criteria:
- Leaving Hacienda and Social Security is like breaking up with an ex: It's best not to have any outstanding issues, or you'll end up paying dearly. In fact, your request to stop working as a freelancer in Spain will be denied if you have debts with the government. So, make sure everything is squared.
- Another tip is, if possible, to request your deregistration at the end of the quarter with all your accounts settled. This way, you avoid having outstanding payments after you've processed your deregistration.
- If you're a corporate freelancer and manage a company, you'll need to present official documentation that justifies the reason for your request to deregister as a freelancer.
- If you’ve been a freelancer for 12 months, you qualify for benefits related to the cessation of activity in Spain. However, you’ll also have to provide a solid reason for wanting to deregister.
How to deregister as a freelancer with the Agencia Tributaria
To deregister as a freelancer with the Agencia Tributaria online, you'll need to log in using your Digital Certificate, so make sure you’re up and running to avoid frustrations. You probably got your Digital Certificate when registering as a freelancer, so look for it in your browser settings to speed up the autónomo deregistration process.
Once you’ve got your Digital Certificate, here are the steps to deregister as an autónomo in Spain:
- After logging into the Agencia Tributaria website, you'll need to complete the Modelo 036 or 037 form. These should be familiar to you as they're the same ones you would've used to register as a freelancer.
- You must indicate your deregistration in all the IAE sections (if you're registered in more than one, like as a teacher and a retail merchant).
- Finally, you can review everything in the Mis Expedientes section. In addition to these steps, it's crucial to settle any debts and submit the forms at the end of the next quarter if your cessation date doesn't fall at the end of a quarter.
How to deregister as a freelancer with Social Security
Deregistering with Social Security is like activating legendary mode in the world of freelancing — it’s certainly no walk in the park. But you’ve really got to do it to make sure those payments aren’t leaking out of your bank account every month. At least you can do it online on the Social Security website though, by following these steps:
- Log into your account with your Cl@ve PIN or Digital Certificate on the site, then access the baja en trabajo autónomo page.
- At this point, you can choose to deregister as a freelancer by filling out the Modelo TA.0521 form. Remember to include the same cessation date you previously provided to the Agencia Tributaria.
- At the end of the process, you'll have the option to download a PDF receipt to ensure everything is in order.
Nobody said any of this was easy, and you might run into trouble with the “special” way Spanish government websites are built. So if the thought of starting the process is giving you anxiety, or if you’ve just got better things to be doing with your time, you don't have to go it alone. At Xolo, we’re here to take the sting out of Spanish admin.
While our range of plans at Xolo offers a comprehensive suite of services, the option to deregister as a freelancer in Spain is a special add-on service for €90 + VAT. To see a detailed breakdown and explore other services we offer, check out our pricing page: Xolo Pricing.
I’ve now deregistered as a freelancer in Spain, what else can I expect?
In the wise words of Lenny Kravitz, “Baby, it ain’t over ‘til it’s over”. Even if you’ve gotten everything approved to stop being self-employed in Spain, you may still come across one or two surprises.
Here are some of the most common questions and issues freelancers have after deregistering:
1. Can I claim unemployment benefits after deregistering as a freelancer?
In the freelancer world, unemployment isn’t the same as it is for our employed friends. For us, it’s really more of a “cessation of activity”, and only 60% of applications for freelancer unemployment benefits get approved. To boost your chances of unemployment benefits, you need a solid justification for deregistering as a freelancer so the Agencia Tributaria doesn't suspect you of fraud. Another option is to resume your unemployment benefits if you had previously paused them when you registered as a freelancer.
2. Can I temporarily deregister as a freelancer?
Technically, you can deregister as a freelancer up to three times a year — something that is especially useful for seasonal self-employed workers in Spain.
3. What happens to the flat rate if I deregister as a freelancer?
You may have heard of the flat-rate freelance quota, which has been updated for 2023. It’s a reduced social security payment that is valid for at least the first year of your employment, providing you qualify for it. But it’s a privilege, not a right. Therefore, if you deregister as a freelancer, you lose the flat rate and shoot up to a standard freelance quota, unless you wait three years to restart your activity.
Got more questions about repercussions after the autónomo deregistration process? Drop Xolo a line at hola@xolo.io to discuss your specific case with experts who specialize in the process 🤗.
Do I still need to pay taxes after I deregister as a freelancer in Spain?
Navigating the tax landscape after deciding to stop working as a freelancer in Spain can be a bit tricky. It’s easy to believe that once you’ve deregistered with the Agencia Tributaria and Social Security, that’s it for your tax obligations. But come on, we all know nothing in life is that plain sailing.
Outstanding tax obligations
Even after deregistering, any taxes owed from your time as a freelancer must be settled. This includes any income tax, VAT, or other quarterly tax debts that might not have been paid before your deregistration. This is why we’d recommend deregistering at the end of a trimester whenever possible — everything will be settled, except…
Final tax returns
After you deregister as a freelancer, you're still required to file an annual tax return (la Declaración de la Renta) for the fiscal year you were active in. This ensures that all your earnings and expenses for that period are accounted for. Unfortunately, you can’t just call up the Agencia Tributaria and get this sorted overnight. You’ll need to wait until the following April to do your yearly tax returns.
Potential refunds
On the flip side, if you've overpaid on your taxes or are eligible for certain deductions, deregistering doesn't mean you forfeit potential refunds. Ensure you file your taxes accurately to claim any money owed to you.
Personal income tax
Remember, even if you're no longer a freelancer, you're still a tax resident. If you have other sources of income, such as rentals, investments, or salaried jobs, you'll need to declare these and pay the appropriate personal income tax.
Future ventures
If you decide to embark on a new business venture or freelance activity in the future, you'll need to re-register and adhere to the tax obligations associated with that new role.
Deregister as a freelancer in Spain the simple way with Xolo
As we’ve hinted at throughout this article, the team at Xolo is pretty good at the admin side of freelance work. While you can be the star of your own show when talking with your customers, we work away behind the scenes streamlining all these boring processes and making sure you are compliant.
And even though we’re champions of the freelance lifestyle, we’re more than happy to help you deregister when you need to.
- We’ll take care of your freelance deregistration for €90 + VAT
- We’ll also handle your yearly tax returns even after you’ve left us, starting at €90 + VAT
But for your entire time as a freelancer, you can count on us for:
✅ Automated, professional invoicing that keeps you compliant with the Agencia Tributaria and Social Security
✅ One-to-one advice and guidance from our team of local experts in Spain
✅ Easy management of your business costs and expenses to save $$ on your tax returns
Sign up to Xolo today and see how we can save you time (and your mental health!) throughout your freelance journey.
About James
James McKenna has been a freelancer since 2017, working in subtitling, translation, and his main passion — writing. He loves nothing more than falling down a rabbit hole, a habit that has helped him specialize in areas as diverse as biotech, climate change, higher education, and business strategy.
Based in Barcelona, James learned the ropes the hard way, making mistakes that turned into valuable learning experiences. After working hard to establish himself, he is now working smart, and is always on the lookout for ways to streamline his business.