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FREELANCING

UPDATE: How small businesses in Spain can get €12,000 for digital improvements

The Spanish government has unveiled how self-employed workers and small businesses in Spain can apply for the so-called ‘Kit Digital’ and get up to €12,000 to improve the digital side of their businesses. Here are the updated details, the requirements and why you should apply as soon as possible.

UPDATE: How small businesses in Spain can get €12,000 for digital improvements
If you're self-employed or run a small business in Spain, you can now apply for ways to improve your website, online marketing campaigns or social media presence with up to €12,000 in digital improvements. Photo: photosforyou/Pixabay

At the time of announcing the financial aid programme back in November 2021, the only real details announced were that the government’s so-called ‘Digital Kits’ would run until 2023 with an initial investment of €500 million and would be available to self-employed workers and companies with between 10 and 49 employees.

But on March 15th 2022 the Spanish government finally announced the details of the scheme, including how these digital bonuses will work, the requirements needed to get one and how to apply. 

Autónomos (self-employed workers) and small business owners in Spain have had a tough time during the pandemic, whilst also having to pay some of the highest social security contributions in Europe.

The Spanish government’s new ‘digital kit’ is aimed at helping many of these small business owners out by covering the cost of digital improvements, from their websites to social media management and marketing campaigns.

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

How will the Digital Kits work?

The Digital Kit funds will be distributed in the form of vouchers of up to €12,000 for small companies and autónomos who want to undertake a digital transformation of their businesses.

These vouchers will then be passed on to ‘digital agents’ – a series of companies authorised by the government to develop these projects, which they call “digital solutions”. That means that self-employed workers and small businesses will not receive the funds directly nor be able to choose which company to hire for the digital improvements.

Instead, it will be the digital agents who receive the final payment and will take care of the paperwork and digital improvements. Currently, there are already more than 3,000 companies authorised as digital agents, although the list is expected to continue to grow in the next few weeks.

Please note that €12,000 in funds is the highest amount and will only be available to businesses with the need for a complete digital overhaul. 

What digital improvements are available?

The digital transformation projects which can be financed with the Digital Kit fall into several different categories, which the government defines as:

  • The creation of web pages and visibility of the company on the internet (Google rankings, SEO)
  • Electronic commerce
  • Social media management
  • The improvement and digitisation of customer management systems
  • Business intelligence and analytics
  • Virtual office tools and services
  • Digitisation and automation of business processes
  • Electronic billing
  • Secure communications
  • Cybersecurity

Who will be eligible for the Digital Kits?

In order to be eligible for the Digital Kits, you must:

  • Be a small business, micro business or autónomo (A small business is considered to be one that has more than 10 employees and no more than 50 and a micro business has less than 10 employees whose annual turnover does not exceed €2 million).
  • Meet the financial and cash limits that define the categories of each type of company
  • Not be considered a company in crisis
  • Be up to date with tax and social security payments
  • Not be subject to an outstanding recovery order from the European Commission

When can I apply?

The Asociación de Autónomos (ATA) has confirmed to The Local that small businesses with between 10 and 49 employees are able to apply for the Digital Kits any time between now and 11am on September 14th 2022.

However, if you want to be in with a chance of receiving one, you should apply as soon as possible, as the aid will be granted on a first-come-first-served basis, depending on your needs and funds are already running out. 

ATA also confirmed that micro businesses with between three and nine employees are able to apply from June and sole traders or those with just two employees can apply from September. 

How do I apply?

In order to apply, you must register at www.acelerapyme.es and complete the self-diagnosis test. This will allow the government to know what level of digitisation your company has already and what you need. 

Remember, those businesses that have already registered will be given priority. 

You can also request ATA to help you apply for the kits by filling out the form found at https://autonomoskitdigital.es/.

You can then check the catalogue of digital solutions, where you can choose one or several of those offered by digital agents that best suit the needs of your business.

Next, you will request the Digital Kit aid at the Red.es electronic office (sede.red.gob.es) and complete the associated form.

Once your request for a Digital Kit has been granted, you will be able to access the catalogue of digital agents and decide which one you want to work with, before signing an agreement to start your project.

According to the latest stats available, there are approximately 2.9 million SMEs in Spain (around 70 percent in the services sector), and around 3 million autónomos. 

READ ALSO: How to set up an online shop in Spain

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For members

TAXES

La Renta: What items can you deduct on your Spanish tax return?

Find out what costs you can and can't claim back on your annual Spanish tax return or 'declaración de la renta'.

La Renta: What items can you deduct on your Spanish tax return?

Spain’s annual tax return is known as the declaración de la renta and completing it or knowing what you can claim back as an expense can be quite tricky, particularly because there are many regional differences too. 

Anyone residing in Spain for more than 183 days and earning over €22,000 a year, who is self-employed (autónomo), or moved here in the last year, must complete it. 

Your Spanish income tax return has to be filed by June 30th for the preceding year, in this case for 2021.

READ ALSO – La Renta: The important income tax deadlines in Spain in 2022

There are many different allowances or deductions that can be made on your tax return such as deductions for couples, children, single parents, elderly parents, disabilities and large families, may of which we have covered in previous articles such as this one here

This article, however focuses specifically on costs that you can claim back on your tax return. For example, can you deduct rental or mortgage expenses, property tax or private health expenses? Read on to find out. 

READ ALSO: How to complete Spain’s Declaración de la Renta tax return

Spanish pension contributions

Up to €2,000 can be deducted for contributions to pension plans or up to 30 percent of the tax base (total income).

Property tax

Those who own a property in Spain will pay the yearly Impuesto Sobre Bienes Inmuebles, better known as IBI. This is similar to council tax in the UK and one of the expenses you can claim back on your annual declaration.

The costs of renovating your main home

Keep in mind, that you can’t just deduct the cost of any renovations on your home, particularly if they’re just cosmetic, but you can deduct for any renovations which reduce the demand for heating and cooling by at least seven percent. In this case, you can apply a 20 percent deduction, with a maximum of €5,000. 

Buying or rental costs of your main home

This expense can only be deducted by those who bought their property and signed the mortgage before January 1st, 2013 and must have included it in previous declarations. In the case of those who are renting, the signing of the contract must have been made before January 1st, 2015.

The tax benefit is up to 15 percent with a maximum limit of €9,040, while the maximum deduction will be €1,356.  

Some regions will also allow you to deduct further expenses if you buy a house in a rural area or habitually live in an area at risk of depopulation, such as in Andalusia, Cantabria, Castilla La-Mancha, Extremadura, Galicia, La Rioja and Valencia.  You can also deduct expenses for the cost of buying a residence for a particular group of people, be it young people in need, victims of domestic violence, disabled people or large families.

Donations

Donations of many kinds can be deducted on your annual tax declaration, whether they’re charitable donations, donations to cultural institutions, donations for scientific advancement, innovative technologies or the environment.

Generally, you can deduct 80 percent of the first €150 and 35 percent of any donations after that. If you have any doubts as to whether the donations you made last year can be included, it’s best to check with your accountant or gestor.

For educational studies and textbooks

Many times, you can deduct the cost of education and the textbooks associated with them. In general, you can deduct 15 percent of school fees; 10 percent of language courses and; five percent of the cost of purchasing clothing for exclusively school use.

However, this does not include claiming back for all courses, unless you are autónomo (self-employed) and they are designed to help improve your business. If you’ve taken a course, it’s best to check with your gestor or accountant to see if the fees can be included on your declaration as there are slight variations between regions too.

Investments in environmental installations (some regions only)

Many regions in Spain allow you to deduct costs of investing in environmental installations such as solar panels, thermal installations, and water-saving devices. This category also includes improvements made to your habitual residence due to disability or adaptation because of technical or structural issues. Some of the main regions you can deduct these expenses include Valencia, Balearic Islands, Canary Islands, Murcia and Galicia. Unfortunately, these are not included for Madrid or Catalonia.

Domestic help (some regions only)

In some regions in Spain, you can even deduct expenses for domestic help, such as cleaners, nannies or au-pairs. This is true in Madrid, Andalusia, La Rioja and Castilla y León.

Electric cars (some regions only)

Those who make an investment in buying an electric car may also be able to deduct the cost of this, depending on where they live. This is true if you live in Valencia, La Rioja and Castilla y León.

Standout regional differences

  • The Canary Islands and Cantabria are the only two regions that allow you to deduct private health insurance and other health-related expenses, but make sure you contact your gestor to find out exactly which health costs can be claimed for.
  • Andalusia is the only region where you can deduct legal expenses.
  • Public transport costs can be deducted in Aragón and Asturias.

Please note, we at The Local are not financial experts. What we’ve learned, we’ve learned the hard way — by getting on the phone and listening to all those frustrating automated messages. 

The information above is designed to help, but if you are in doubt or unsure of exactly what you can claim back, seek professional advice.

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