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FREELANCING

Everything that changes for self-employed people in Spain this year

New social security contributions, a tax to top up pension funds, a reduction in retention rates for artists - 2023 will bring many developments for all self-employed workers in Spain.

Everything that changes for self-employed people in Spain this year
Everything that changes for self employed in 2023. Photo: Claudio CRUZ / AFP

New social security contributions for self-employed

From 2023, Spain’s autónomos will pay monthly social security fees based on how much they earn, instead of a fixed rate. Previously, freelancers have had to pay a minimum contribution base of €294 per month after they have been registered as self-employed for two years, regardless of how much they earn.

Instead of there being a fixed rate of €294, the fee will go down progressively to €200 a month for lower earners and progressively higher – up to €590 a month – for higher earners. This means that some self-employed workers will see their social security payments reduced, however, for anyone earning over €1,700 per month, they will increase.

New tax for all workers 

From 2023, all workers, whether self-employed or salaried in Spain will have to pay an extra tax to help fill up the country’s pension fund. Trade unions estimate that for autónomos, the average monthly payment will be around €5.

READ ALSO: Everything that changes about working in Spain in 2023

No social security tax for new autónomos in Madrid

Back in September 2022, the regional government in Madrid announced that from 2023, new autónomos in Madrid will have their social security fees paid for by the local government for their first year of self-employed work in the region.

If their monthly earnings are below minimum wage in the second year (€1,166 gross a month), they will also have their social security fees covered by the regional government. This means that new self-employed workers in Madrid will save hundreds or potentially several thousands of euros during their first year or two years of work.

READ ALSO: The tax changes in Spain in 2023 that you need to know about

Benefits for self-employed mothers

Women who are self-employed and have children under 3 years of age will receive a benefit of €100 per month until the child has their third birthday. 

To be eligible, at the time of giving birth, they must either be receiving a benefit or subsidy for unemployment or be registered with Social Security. Women who register later and have already accumulated at least 30 days of contributions will also be eligible. 

READ ALSO: How to hire someone if you’re self-employed in Spain

Reduction in retention rates for artists 

The withholding rate or IRPF for artists with the lowest level of income will be reduced to 7 percent. Previously, it was only 7 percent for the first couple of years of being an autónomo and from then on it went up to 15 percent. 

Changes for unpaid/late invoices  

As a freelancer, it’s unfortunately likely that you’ve been in a situation where you’ve had unpaid or late invoices and you’ve still had to pay tax on them, without having actually received the money yet. You then only had a limited amount of time in which to modify or change your invoice to reflect the fact that it hadn’t been paid. 

This situation is set to get easier in 2023 as the period in which you can rectify your invoice has been extended from 3 to 6 months. The methods used to claim payments have also been made more flexible and the minimum amount of the tax base that can be modified has been lowered from €300 to €50.

The threshold for tax declarations changes

In 2023 self-employed taxpayers whose gross income does not exceed €15,000 per year will not be required to file their yearly 2022 tax return. 

This means that in April when it’s time to file the Declaración de Renta, those who have earned income from more than one source will not be obliged to declare if the sum of all their income does not exceed €15,000. Previously, the threshold was €14,000. 

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For members

WORKING IN SPAIN

Your questions answered about Spain’s digital nomad visa

Spain's long-awaited digital nomad visa is finally available, but there is still much confusion about it, so we've answered all your burning questions.

Your questions answered about Spain's digital nomad visa

Spain’s Startups Law, which also introduced a new digital nomad visa, was approved at the end of 2022, but didn’t come into force until January 2023 and all the details are only just now being revealed. 

From how much money you need to your tax obligations and if you can bring family, members, here are all your questions answered. 

What are the financial requirements to apply for the visa?

You must prove that you earn 200 percent of the SMI or Minimum Interprofessional Salary. The current minimum wage in Spain is €1,000 per month (across 14 payments) or €1,166.67 across 12 payments.

Keep in mind though that the minimum wage is currently being re-evaluated and is likely to go up to €1,082 (across 14 payments) per month in the near future.

This means that currently, you must be able to show that you will have an income of at least €2,333.34 per month or €28,000 per year, but it is likely this will increase. You can prove this amount either with job contracts, invoices or bank statements.

Can I bring family members with me on the visa?

Yes, you are permitted to bring partners and children with you to Spain on the digital nomad visa.

In order to add a family member, however, you must prove that you have an extra 75 percent of the SMI or minimum wage. This currently equates to an extra €875. For each additional family member after this, such as children, you will have to prove you have an extra 25 percent of the SMI, currently €291.66.

READ ALSO: Ten of the best cities for digital nomads to move to in Spain

Do I need private health care?

You must also make sure that you have either private or public health insurance, simply getting travel insurance with health coverage is not enough.

The Spanish government mentions the option of getting public health insurance instead of private cover, but it is not yet clear whether this means that you will have to contribute to the social security system or be eligible for the convenio especial – the public pay-in scheme.

Do I have to have any professional qualifications? 

You must prove that you either have professional qualifications or a degree relating to your job or that you have at least 3 years’ experience working in your field. 

How long is the visa valid for?

The visa will be valid for an initial period of one year, however, it can be renewed for up to five years. After that, if you want to continue living in Spain, you will be able to apply for permanent residency.

Does the visa give me access to travel around the EU?

Yes, once you have your visa and you’re in Spain, you will be able to apply for a residency card. This will allow you to travel throughout the EU during the time that you’re living in Spain.

Keep in mind though, it won’t give you the right to work or live in other EU countries, but you will be able to go for short breaks. 

How long do I have to stay in Spain for the visa to be valid?

Many digital nomads choose to split their time between different countries. If this is your case, and you want to split your time between back home in the US or the UK for example, you must make sure you stay in Spain for a maximum of 6 months per year for your visa to remain valid.

Do I have to pay tax in Spain?

Yes. If you stay longer than 183 days, then you will be considered a tax resident in Spain. This means that any money you earn while working in Spain, even if it comes from clients or companies abroad will be taxable.

However, the digital nomad visa grants you tax benefits, such as being able to pay the Non-Residents Tax Rate (IRNR) rather than the regular progressive income tax (IRPF) that Spain’s resident workers pay.

Non-Resident Tax was previously only applicable to non-residents such as second-home owners, but an exception has been made for digital nomad visa holders even if they spend more than 183 days a year in Spain and are therefore technically fiscal residents.

IRNR is generally 24 percent in Spain but this will be reduced to 15 percent for digital nomads and remote workers, as long as you earn below €600,000 a year.

This favourable tax rate will be available for four years, if you choose to renew your visa. 

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