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Self-employed in Spain: six must-visit websites to apply for grants and benefits

Being autónomo in Spain has always been a tough gig, but the pandemic has tightened the screw for many more self-employed. Here are six websites through which SMEs and autónomos can get financing and government aid.  

A man walks past a closed British pub in Benidorm on June 1, 2020.
Many self-employed workers and SMEs have had to request government aid during the pandemic. Photo: José Jordan/AFP

Self-employed workers in Spain pay one of the highest monthly contribution rates in Europe, tend to receive state protection later than salaried workers and have to deal with complex bureaucratic processes throughout their careers. 

But whether through preference or necessity, around 3.2 million people in Spain are registered as self-employed. 

The fallout from the pandemic, spiralling energy costs and a higher consumer price index have contributed to making this year particularly hard for many autónomos

Fortunately, the benefits struggling self-employed workers have had access to during the pandemic have been extended until February 2022, and Spain is also set to receive €3 billion in EU funds for the digitization of businesses early next year.

So now is a particularly good time for self-employed workers in Spain to familiarise themselves with where they can claim grants and other aid from the Spanish government and other institutions.  

Here are six public organisations that offer grants and other financial incentives to self-employed people in Spain, some of which many foreign autónomos may never have heard of before.

If you have a gestor in Spain, you may want to run over these options with them in case they can advise you on the application process.

Ipyme 

This website belonging to Spain’s Ministry of Industry provides small and medium enterprises with information on the latest subsidies made available to them.

Click on the category Financiación, then scroll down and click on Ayudas e incentivos nacionales, where you’ll be directed to a search bar in which you’ll have to type your field of work to find available grants. 

SEPE 

Spain’s Public Employment Service (SEPE) is the state body that’s been charged with handling the country’s furlough scheme during the pandemic. 

Since 2014, Spain allows people claiming unemployment benefits to continue doing so whilst registering as self-employed and starting up their own business. 

There are also benefits and subsidies published on their website, with the English-language version again including some wonky translations.

Spain’s National Subsidy Publication System

Another portal in which to find government aid and subsidies for autónomos in Spain is the website of El Sistema Nacional de Publicidad de Subvenciones.

It’s here where you’ll be able to find the latest convocatorias, the announcement that public aid has been made available for a certain period.

As is often the case with Spanish government websites, it’s not the most user-friendly, but luckily there is an English-language search engine which isn’t perfectly translated but may help some of you. 

ICO

Spain’s Official Credit Institute, El Instituto de Crédito Oficial (ICO), is an organisation through which self-employed workers can request guarantees, loans and social bonds to boost their business.

ICO loans can be used to pay wages, utility bills, rental costs, to have circulating capital or pay taxes and meet other payment obligations. 

To apply for any of these, self-employed workers have to present a written document explaining the reasons for their request at one of the banks associated with ICO, which you can find out more about here

Foreign companies can also apply for ICO loans and other services.

Spain’s Chamber of Commerce 

The Cámara de Comercio offers new entrepreneurs and self-employed workers in Spain the chance to find grants with which to start a business, update their business as well as training courses for themselves or their employees. Here is the English-language version

You should also check the website of your region’s chamber of commerce as they may offer other incentives for businesses and autónomos.

Spanish Confederation of Young Entrepreneurs

The website of La Confederación Española de Jóvenes Empresarios (CEAJE) is as the name suggests aimed at self-employed workers in the country under the age of 41.

CEAJE offers its members free financial consultancy services and a handy comparison of all the grants and incentives available to younger autónomos. Even though it’s only in Spanish, their website contains a lot of useful information.

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SELF-EMPLOYED

Self-employed in Spain: Do I have to register and pay tax if I earn below minimum wage?

It’s illegal to earn below the minimum wage in Spain if you’re a full-time employee, but if you’re an 'autónomo' do you still have to register and pay tax when you're not earning much money?

Self-employed in Spain: Do I have to register and pay tax if I earn below minimum wage?

Being an autónomo (self-employed worker) in Spain can be challenging, given the high social security payments you have to pay every month and the bureaucracy that’s involved.

But is it actually necessary to register and pay tax if you’re earning below the minimum wage every month? 

In 2022, Spain’s Interprofessional Minimum Wage (SMI) is €1,000 per month if you’re paid in 14 instalments and 1,116 if you’re paid in 12 instalments throughout the year.

According to the Spanish news site The Objective, two-thirds of self-employed workers in Spain, around 2.2 million of the 3.3 million registered, earn below minimum wage.  

Currently, contract workers in Spain who earn €22,000 or above must present an income tax return and those whose annual income is less than €22,000 will be exempt from filing a tax return.

However, if you’re autónomo, you will still need to complete file la declaración de la renta, even if you have earned under €22,000.

The question of whether you need to register as self-employed in Span and pay tax even if you earn minimal amounts has been asked over and over again and is a bit of a grey area, with many lawyers not even being able to give a straight answer.

Take freelancers who are just starting out and are in the process of growing their business but who are not yet making enough sales to reach minimum wage. It could also be self-employed workers who are going through a period of financial difficulty or those who only work periodically such as language teachers, who may only give a few classes a week.

What does Spanish law say?

In 2007 the Supreme Court issued a ruling stating that it was not necessary to register as autónomo if you’re earning below minimum wage. Since then, there have been several self-employed workers who have won cases arguing and proving that they earned less than the SMI. 

However, there is no exact law on this and in 2018, Spain’s Social Security department issued a ruling stressing that everyone had to register as self-employed, regardless of the amount they earn.

READ ALSO: Why you should be raising your rates if you’re self-employed in Spain

According to InfoAutonomos, a website designed to help Spain’s self-employed: “The problem arises because the obligation to register as self-employed is independent of the level of income and the time dedicated to a work activity”.

Spanish Social Security legislation states that “you must register as self-employed if you regularly, personally and directly carry out an economic activity for profit, without being subject to an employment contract, even if you use the paid service of other people, whether or not you are the owner of an individual or family business”.

This means that you are supposed to register if you work on a regular basis, but you could still be earning below the minimum wage, whether you are working 40 hours a week or just for two afternoons a week.

The reality is that if you are not registered properly then you cannot legally issue invoices to clients in Spain and therefore cannot be earning anyway. You can issue invoices to clients abroad though, but may still not be earning enough to meet the Spanish minimum wage

Even if you do not exceed Spain’s SMI, if you issue invoices every month, Spain’s Seguridad Social Ministry and the Hacienda tax agency can potentially find out if you’re not registered. Other companies who you invoice will have a record that they’ve paid you and this will be submitted along with their quarterly tax returns.

There could be hefty fines to pay if you’re not registered when you’re supposed to be, but the amount will depend on individual circumstances. 

READ MORE: What are the fines and prison sentences for tax evasion in Spain?

Social Security payments

The main issue with having to register as an autónomo when you’re earning so little is that you have to pay monthly social security fees, regardless of how much you earn each month.

This means that someone who is earning below minimum wage is still having to fork out 289 per month (60 for the first year). Even if they earn nothing one month, they are still obliged to pay the social security fee.

Although these payments are set to change in 2023, those earning below minimum wage are still going to have to pay out a considerable amount. 

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What about paying taxes?

As an autónomo you pay your taxes every quarter as well as VAT.

You will pay 19 percent income tax on yearly earnings from 0 up to 12,450, 25 percent on earnings from 12,451 to €20,200, 30 percent on earnings from 20,201 up to 35,200 and 37 percent from 35,201 up to 60,000.

As you can see, this means that even if you’re earning below the minimum wage and get less than 12,450 per year, you still have to pay 19 percent in tax. 

When you fill out your yearly tax return, usually in June for the previous year, then Spanish authorities will calculate how much tax you’ve paid in total. If you’ve paid too much, which is likely if you earn below minimum wage, then you will get paid some of your tax back. What you won’t get back though are the social security payments.

What are the solutions? 

It is quite difficult as there are one-size-fits-all solutions, only certain actions you can take to make the financial situation easier for you.  

You can deregister from being autónomo up to three times per year. This means that if you think there are certain months you will be earning below the SMI, then you can deregister.  

READ MORE: How to de-register as autónomo in Spain

However, instead of just not declaring amounts earned, you invoice for them later when you do register. If you can make sure you hold out and invoice for several payments together, you can make sure you earn enough for that month to be able to pay the social security fee and the tax.  

Keep in mind that even though you are paying out a lot, there are several benefits to registering as self-employed and paying your social security and taxes. You are eligible for state healthcare, you can get sick pay, plus maternity or paternity pay.

You may also be able to get special financial benefits, as what happened during the Covid-19 pandemic when lots of autónomo saw their earnings drop dramatically and got help from the government (but only if they were registered).

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