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REVEALED: Spain’s proposed new tax rates for the self-employed from 2023 onwards

The Spanish government on Thursday proposed yet more changes to self-employed workers' tax contributions, with the new measures suggested for 2023 beneficial for low earners but bad news for higher earners. How much will 'autónomos' of all income brackets pay if the new laws are approved?

Spain's  Minister of Social Security Jose Luis Escriva has proposed changes that will be beneficial in particular for low-earning autónomos. Photo: PIERRE-PHILIPPE MARCOU / AFP)
Spain's Minister of Social Security José Luis Escrivá has proposed changes that will be beneficial in particular for low-earning autónomos. Photo: PIERRE-PHILIPPE MARCOU / AFP)

The self-employed in Spain – known as autónomos – have long felt they are burdened with unfair tax and social security contributions.

Throughout the last year the government has met with unions to try and level the playing field for low earners and increase flexibility in the system.

READ MORE: Self-employed in Spain – the key changes to expect in 2022

Major self-employed unions met again in January 2022 with Spain’s Ministry of Inclusion, Social Security and Migration to resume talks over changes to the system for the self-employed, and this most recent round of talks may present a step in the right direction for many. 

The Spanish government on Thursday revealed these plans for reforms to self-employed tax contributions based on income.

What are the proposed changes?

Social Security Minister José Luis Escrivá has suggested a system consisting of 13 different tax contribution brackets based on earnings, from those who earn less than €600 a month to those who make more than €4,050 a month.

The new model would introduce a minimum monthly contribution of 184 for low-earning autónomos and up to 1,267 for the top earners.

This would be done gradually over a period of eight years, so from 2023 to 2031 minimum earners would see their monthly tax contributions drop year after year, whereas high earners would seem them rise year on year.

The following table we’ve compiled using data by Spain’s Social Security Ministry shows the proposed tax contribution brackets for autónomos based on their monthly income over the next years. In yellow are the ones who would pay less, in turquoise the ones who would pay the same and in pink those who would pay more. 

chart proposed self employed tax contributions in Spain from 2023

Table: The Local, Source: Spain’s Social Security Ministry

The proposed changes also include a reduced flat rate of 70 for the first two years, and have been welcomed by many as the self-employed try to navigate the post-pandemic economy.

Half of Spain’s three million autónomos believe that they won’t recover to pre-pandemic financial levels until at least 2023, according to a poll from Spain’s National Federation of Self-Employed Workers’ Associations (ATA).

Who would these changes benefit?

According to government claims, the proposed changes would mean increased savings for two out of every three self-employed in Spain.

The plan, still in the negotiation phase and dependent on self-employed unions, would be applied over nine years starting from 2023, with measures to review the situation and contributions every three years. 

According to forecasts from the Ministry, the new system would generate savings of €1,300 per year for autónomos earning less than €600 a month; while for those who earn between €600 and €900 – a large proportion of Spain’s three million self-employed – the savings made under the new system could also be over €1,000.

However, for the higher earners being taxed on real earnings could result in considerably higher taxes over the next decade.

The contributions systems for autónomos in Spain has long been decried as unfair as it forced low earning self-employed workers to make contributions similar to higher earners with multiple income streams.

The reduced flat rate, and the improved flexibility of Escrivá’s new proposals, in particular, are aimed to level the playing field: the new system would allow each worker to increase or decrease their contributions throughout the year – up to six times – based on the ebb and flow of their income, something often unpredictable for the self-employed.

Does everbody agree with the proposals?

Although seen to be a step in the right direction, the proposals haven’t escaped criticism from some autónomo groups in Spain, however. Self-employed groups broadly welcome the return to dialogue and some view the proposal positively, but flaws have been noted in the proposed system. 

One criticism levelled at the Ministry’s proposals has been the speed with which the changes would be phased in. The Union of Associations of Self-Employed Workers and Entrepreneurs (UATAE) has stated that the self-employed “cannot wait nine years for the situation of the current regime to be modified until they are able to pay a fair quota.”

President of the  Union of Professionals and Self-Employed Workers (UPTA), Eduardo Abad, has suggested that negotiations so far are encouraging: “The objective for our organization, without a doubt, has been achieved, which is for this new system to return tax justice to a system such as the Social Security contribution.”

However, President of the National Federation of Associations of Self-Employed Workers (ATA), Lorenzo Amor, panned the government proposals and suggested that “they have no idea what it means to be self-employed.”

The latest round of negotiations between self-employed groups and government is set to continue from Monday. 

READ ALSO: Self-employed in Spain – What you should know about being ‘autónomo’

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Spanish government divided over proposed menstruation leave bill

Talk of abortion policy reform and proposed menstrual leave has dominated Spanish discourse this week, but it’s also dividing Spain’s coalition government.

Spanish government divided over proposed menstruation leave bill

Spain’s PSOE-fronted coalition government recently outlined proposals that have dominated public discourse in the country.

But the legislation, which would allow women over the age of 16 to get abortions without the permission of their parents and introduce ‘menstruation leave’ for those suffering serious period pains, has not only divided Spanish society but the government itself.

The proposals would make Spain a leader in the Western world, and the first European Union member state to introduce menstrual leave, and changes to abortion law would overturn a 2015 law passed by the conservative People’s Party that forced women aged 16 and 17 to obtain parental consent.

The wide-ranging bill would also end VAT on menstrual products, increase the free distribution of them in schools, and allow between three and five days of leave each month for women who experience particularly painful periods.

READ MORE: What are Spain’s abortion laws for foreign residents and visitors?

Menstrual leave

Ángela Rodríguez, the Secretary of State for Equality, told Spanish newspaper El Periódico in March that “it’s important to be clear about what a painful period is – we’re not talking about slight discomfort, but about serious symptoms such as diarrhoea, fever and bad headaches.”

“When there’s a problem that can’t be solved medically, we think it’s very sensible to have temporary sick leave,” she added.

Cabinet politics

The proposals are slated for approval in cabinet next week, and judging by reports in the Spanish media this week, it is far from reaching a consensus. It is believed the intra-cabinet tensions stem not from the changes to abortion and contraception accessibility, but rather the proposed menstrual leave.

The junior coalition partner in government, Podemos, largely supports the bill, but it is believed some in the PSOE ranks are more sceptical about the symbolism and employment effects of the proposed period pain policy.

Vice President and Minister of Economic Affairs, Nadia Calviño, said this week: “Let me repeat it very clearly: this government believes and is absolutely committed to gender equality and we will never adopt measures that may result in a stigmatisation of women.”

Yet Second Vice President and Minister of Labour, Yolanda Díaz, who is viewed as further to the left than President Pedro Sánchez and other PSOE cabinet ministers, is reportedly “absolutely in favour” of the measure to reform Spain’s “deeply masculinised” labour market.

Sources in the Spanish media have this week also reported that some PSOE cabinet ministers feel the proposed paid leave not only plays up to stereotypes of women, or stigmatises them, like Calviño says, but also places them at a disadvantage in the world of work.

Minister of Inclusion, Social Security and Migration, José Luis Escrivá, stated that while the government should seek to improve women’s employment protections, it should also seek to boost their participation in the labour market under “better conditions.”

In that vein, some feel menstrual leave could be used a form of of employment discrimination similarly to how pregnancy has been historically, and the policy would, in that sense, actually be more regressive than progressive in enshrining women’s workplace rights. 

READ MORE: Spain eyes free contraception for under-25’s

Trade unions

Trade unions are also sceptical of the menstrual leave legislation. Cristina Antoñanzas, deputy secretary of UGT, one of Spain’s largest trade unions, has echoed those in the cabinet who feel the proposals could “stigmatise women.” She added that “it does women a disservice.”

Public opinion

A survey run by INTIMINA found that 67 percent of Spanish women are in favour of regulating menstrual leave, but also that 75 percent fear it is “a double-edged sword” that could generate labor discrimination.

The survey also found that 88 percent of women who suffer from disabling and frequent period pain have gone to work despite it. Seventy-one percent admitted that they have normalised working with pain.

Cabinet showdown

The proposed menstrual leave policy will be debated in cabinet next week when the Council of Ministers debates and approves the broader abortion and contraception reforms. According to sources in the Spanish media, and many cabinet ministers themselves, it seems a consensus on menstruation leave is a long way off.