How to submit annual tax reports as a freelancer in Spain (and everything else you might not know)

Everyone has a horror story of when they had to submit their first annual tax reports as a freelancer in Spain. In my first year, for example, I ignored everyone's advice to use a gestor ("I'm not paying someone else to do it — how hard can it be?!"). 

Then, once I'd eventually figured out how to log into my account with the tax agency, I was faced with a sea of tiny little boxes to fill in and a varied selection of long words ending in "ción". The mess I’d made with the Declaración de la Renta ended up costing me just under €1,500, which I didn't have, naturally. 

Enough time has passed now to admit that I had no idea what I was doing. And that's fine. But when your misunderstandings cost you one-and-a-half thousand euros, it's time to get informed on the freelancer tax obligations in Spain. 

When I started out as an expat freelancer, I hadn't heard of Xolo, so I scoured the web for contradictory information that often left me more confused than when I started. 

So if you're reading this, you're in luck! With the help of our team of experts, we've put together a full guide on annual tax reports for freelancers in Spain. It is designed to simplify the complex world of tax reporting and help you stay compliant with Spanish tax laws. We'll walk you through:

• The key terms you need to know
• Your obligations as a freelancer
• The types of tax reports you need to submit
• The deadlines you can't afford to miss

And while it's a good idea to have a full understanding of your tax reports, there are only so many hours in the day. That's why expat freelancers like you turn to Xolo, an online freelance management platform that gives you back one of your greatest assets: Time. 

A glossary of Spanish terms regarding annual tax reports

If you’re just starting out, annual tax reports are complicated enough without a bunch of confusing Spanish terms complicating things. So, to make life easier, we’re going to cover some keywords and phrases.

Understanding these terms is the first step towards being able to successfully submit annual tax reports as a freelancer in Spain. We’ll use them every now and then throughout this article to give you a bit of practice.

• Autónomo: The Spanish term for a self-employed person or freelancer. If you're working for yourself in Spain, you're an autónomo.
• Declaración de la Renta: Simply the annual income tax return that every taxpayer, including autónomos, must submit. It's a summary of your income, expenses, and the taxes you've paid over the year.
• IVA (Impuesto sobre el Valor Añadido): Value-added tax (VAT). As a freelancer, you'll need to charge this on your invoices and report it in your tax returns.
• IRPF (Impuesto sobre la Renta de las Personas Físicas): Personal income tax. It's a percentage of your income that you'll need to pay to the Spanish tax authorities.
• Modelo 303: The form for your quarterly VAT returns. Freelancers need to submit this four times a year to report the VAT they've collected and paid.
• Modelo 100: The form for your annual income tax return (Declaración de la Renta).
• Modelo 130: The form for freelancers to pay their income tax in advance every quarter.
• Agencia Tributaria: The Spanish Tax Agency, responsible for enforcing tax laws.
• Gestor: A gestor is a professional who can help you manage your tax and administrative tasks. Sometimes a single person, sometimes an entire team like at Xolo, think of them as a personal assistant for your paperwork.
• Retención: This is tax withholding or retention. Your Spanish clients usually withhold a portion of your payment and give it to the Agencia Tributaria as an advance on your income tax.

If you aren’t already fluent in the local language, these terms will make it easier for you to submit annual tax reports as a freelancer in Spain. But smart Xolo clients know they don’t have to navigate this murky world alone. They manage their freelance business and tax reporting seamlessly, turning to our team of local experts whenever they need a helping hand along the way. 

What are the freelancer tax obligations in Spain regarding annual tax reports?

As an autónomo in Spain, you have certain obligations when it comes to submitting annual tax reports. These are not just legal requirements, they also help you keep your business transparent and in good standing with the Agencia Tributaria. Here's what you need to know at a glance:

• Income tax (IRPF)
• Value-added tax (IVA)
• Information returns

Income tax (IRPF)

As a freelancer, you're required to pay income tax on your earnings. You'll do this every year through the Declaración de la Renta — your annual income tax return — which you submit through Modelo 100. Clearly, it would be a bit of a shock to be hit with your entire tax bill all at once. That’s why you pay small advance payments on your income tax in two ways:

• 15% IRPF retention on your invoices to Spanish clients, apart from your first year when you can charge 7%.
• 20% of your year-to-date earnings every quarter for your earnings from non-Spanish clients. You’ll pay these advance payments to the Agencia Tributaria through Modelo 130, but you can delay them if you need a little extra time to find the funds. 

All of these pre-payments are then deducted when you submit your annual income tax reports at the end of the tax year. 

Until the Agencia Tributaria fully checks your Declaración de la Renta, it’s all a bit of a rough estimate. So once they’ve confirmed everything is A-OK, you’ll get a notification telling you whether you have to give the government a little extra or receive a welcome rebate. If you have to pay back a huge amount (like my €1,500 😱), the Agencia Tributaria will allow you to pay in two installments, the first in June and the second in November. 

You can submit annual income tax reports as a freelancer via three channels:

• Over the internet — this is how we do it for our clients at Xolo!
• By phone
• In person at an Agencia Tributaria office

Each of these has slightly different timeframes for when you can declare your tax return. More details on the dates and deadlines below 😉. 

Value-added tax (IVA)

Freelancers in Spain submit annual VAT reports at the end of every calendar year. But unlike their income tax reports, the VAT version is for informational purposes only and there’s nothing to pay 🥳. The form in this case is Modelo 390. 

So if you’re not paying anything at the end of the year, when do you pay VAT as an expat freelancer in Spain?

Starting from the beginning, if you're providing goods or services, you're likely required to charge VAT to your clients. There are reduced rates and some VAT-exempt activities, but generally, it’s 21% of your services. 

But this isn’t your money to keep. In this process, you’re simply an intermediary, responsible for passing on your client’s VAT payments to the government. Every quarter, you fill out Modelo 303 which subtracts your output VAT (the VAT on your business-related expenses) from your input VAT (all of the VAT your clients have passed on to you), and you give it to the Agencia Tributaria. 

If you’re new to freelancing, this might sound a bit pointless/confusing/crazy, take your pick. But at least it’s the most predictable tax return to file. Simple addition and subtraction with no complicated tax brackets 🤩.

Information returns

In addition to your tax returns, you have to submit information returns. In truth, your VAT report, Modelo 390, fits into this category, but it deserves its own section. 

Your other information returns could include: 

• Your summary of intra-community transactions. Intra-community always refers to other EU countries. For more info on intra-community transactions, check out our guide on the Register of Intra-community Operators 🕵️
• Your summary of “withholdings and payments on account”. If that doesn’t mean anything to you, you’re not alone. This bit of legalese refers to the annual salaries, wages, pensions, and other income sources you have paid to employees, freelancers, and other professionals. Basically, if you haven’t hired anybody else’s services, you’ve got nothing to worry about.

Is that all clear? 

It’s totally understandable if not. There’s a lot of information to take in. 

But when you’re with Xolo, we’ll submit all your annual tax reports as a freelancer in Spain for free, as long as you stay with us for six months. Now wouldn’t that be a load off your mind?

What annual tax reports do you have to submit as a freelancer?

We’ve mentioned a lot of the forms, or modelos, already. But now we’re going to delve even deeper to give you a clearer idea of what you’ve got to do. We would say it gives you more peace of mind, too, but that would be a half-truth. Let’s just say that no interaction with the Agencia Tributaria could ever be described as “a Zen experience”. 

For a full rundown on what these forms (modelos in Spanish) are all about, we’ve dedicated an entire article to forms for expat freelancers in Spain.

1. Modelo 100 — Declaración de la Renta — annual income tax return)

This is the big daddy among annual tax reports that freelancers in Spain need to submit. It's a summary of the income, expenses, and taxes you've paid over the year. You'll need to submit this report once a year, usually between April and June. 

2. Modelo 390 — Summary of annual VAT transactions

Your annual VAT report is no walk in the park, but it doesn’t strike fear into the hearts of expat freelancers in the same way as la Declaración does. As you don’t have to pay, you can rest easy from a financial perspective. Just make sure you’ve filled it in correctly to avoid any repercussions further down the line. 

3. Modelo 130 — Quarterly income tax payments

This report is used to make advance payments on your income tax — 20% of your year-to-date earnings. You'll need to submit this report four times a year, at the end of each quarter. After you receive your tax bill, you’ll have to cough up that money before the 20th of the following month.

4. Modelo 303 — Quarterly VAT return

Here, you’ll declare the VAT you've collected and paid during the quarter. You'll need to submit this report four times a year, along with Modelo 130. Once it’s processed, you’ll get an unwelcome bill — unless you’ve been smart and squirreled away your VAT and kept it safe.

5. Modelo 349 — Summary of Intra-community transactions 

This is for freelancers who do business with other EU countries. It's a summary of your transactions with other EU businesses, so again, nothing to be paid, but you’ve got to keep your records accurate and up-to-date. The frequency of this report can be monthly, quarterly, or annual, depending on the volume of your intra-community transactions. 

6. Modelo 190 — Annual summary of withholdings

If you’ve withheld taxes from your payments to other providers, you'll need to submit this report. It's a summary of your providers’ income tax that you have retained and passed on to the government during the year. This is a once-a-year deal, usually in January. 

If that all sounds a little complex, give Xolo a call and leave it to the experts 😉.

Deadlines for annual tax reports in 2023 for freelancers in Spain

It’s a great idea to have the Spanish annual tax report deadlines for freelancers front and center to stay compliant, so get these dates in your diary. If you’re not on the ball, you can easily end up with penalties for late tax reports in Spain, and they add up quickly. 

So without further ado, let’s take a look at the key deadlines for 2023 that you need to mark on your calendar:

Managing these deadlines can be a challenge, especially when you're juggling client work and other responsibilities. But with Xolo, you can stay on top of your tax deadlines effortlessly. We’ll send you reminders for upcoming deadlines and help you prepare your tax reports in advance so you can avoid last-minute stress and potential penalties. 

Speaking of penalties…

What are the penalties for failing to submit annual tax reports as a freelancer in Spain?

Failing to submit your annual tax reports on time can lead to a range of penalties from the Agencia Tributaria. Penalties for late tax reports in Spain can be quite hefty, raining on the parade of your profits and potentially leading to legal issues. Here's what you need to know:

Late submission fines and surcharges

If your tax return states the government owes you money, miraculously comes out at zero, is simply informative, or is offset, it does no harm to the Agencia Tributaria. Therefore, the penalty is a light one, just €200. 

However, if you are late in applying to become a freelancer, you’ll be fined €400.

For informative reports, such as your yearly VAT report, the penalty is €20 for each piece of information or set of information. The minimum penalty is €300 and the maximum is €20,000. 

If you pay your fines quickly, without the Agencia Tributaria chasing you down, your penalties will be reduced by 50%.

For late submissions where you don’t owe any tax, you’ll get a standard fine of a nice €100 if you voluntarily make the payment. However, this increases to €200 if the Agencia Tributaria needs to come chasing you.

Failure to submit

If your submission is so late that the Agencia Tributaria has to contact you, expect a beefy fine:

• Minor infraction: 50% of tax + fine + interest

A minor infraction is when the fine is equal to or less than €3,000, or if it’s more than €3,000, but there is no concealment.

• Serious infraction: 50 to 100% of tax + fine + interest

If your fine is over €3,000 and there is concealment, you’re looking at a serious infraction.

• Very serious infraction: 100 to 150% of tax + fine + interest

Very serious infractions are for cases of fraud. Here, you can also expect legal issues. Just ask Shakira, who is now facing fresh charges for allegedly (this cool, legal team?) failing to pay €14.5 million in tax. 

Reductions

Even if you get a fine, you can potentially reduce it in the following cases:

• Conformity reduction: If you accept the fine, you could get a 30% reduction.
• Reduction for payment: If you pay your penalty within the stipulated term, you can qualify for a 40% reduction.

In addition to your fine, the Agencia Tributaria can even suspend you from working, employment, or public office for a minimum of three months and a maximum of 12 months.

Xolo: Helping you steer clear of tax troubles

When you’re faced with steep penalties, you don’t want to take any chances. That’s why so many expat freelancers in Spain turn to Xolo, where we prepare your tax reports accurately and submit them on time, every time. We help you avoid costly mistakes and penalties, giving you peace of mind and more time to focus on…well, literally anything more fun than endless admin forms.

Stay with us for six months and we’ll fill all your annual reports for FREE!

You’ll also get access to a bunch of other freelance-focused benefits:

✅ A user-friendly online platform to create sleek, compliant invoices

✅ One-to-one support from our team of local experts

✅ Business expenses management to reduce your tax bill

Sign up to Xolo today and take the stress out of your freelance life in Spain.

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.