Everything that changes for self-employed workers in Spain in 2024
Spain's 3.3 million 'autónomos' will have to get their heads around several new changes next year including amendments to social security payments, VAT and income tax returns.
Social Security payments
2023 was the first year that social security payments based on real earnings instead of a set amount for everyone were introduced. Next year, this will continue and amounts will be adjusted accordingly.
In 2024 the amounts will be reduced further for those on low incomes, while they will increase for those who earn more. Social security fees will be reduced between €3 and €10 per month for anyone earning €1,300 or more, while anyone earning over 1,700 per month will pay between 2.5 and 6 percent more.
READ ALSO - GUIDE: How to register with Spain's social security system
For example, an autónomo who is just starting to be financially stable and earning €2,030 per month will pay €10 more per month in 2024.
READ ALSO: Will you pay more under Spain's new social security rates for self-employed?
Changes in reporting VAT
The self-employed associations and the Treasury are working to carry out the transposition of European Directive 2020/285, which came into force in 2020. This means eliminating the obligation to declare quarterly VAT statements for those self-employed workers who invoice less than €85,000 per year.
The EU requires this by January 2025, so the changes will begin to happen in 2024, however, it will not be fully in force until the following year.
This means that self-employed workers will not be required to issue VAT invoices and those who earn less than €85,000 will be able to choose between the current general VAT regime or take advantage of the new special franchise regime.
Zero social security payments for those in the Canary Islands, Extremadura and Galicia
In 2024, new self-employed workers in the Canary Islands, Extremadura and Galicia will join those in some of Spain’s other regions (such as Madrid) and benefit from not having to pay social security when they first sign up.
Canary Islands: In the Canary Islands, the zero quota will apply from January 1st, 2024. The region will subsidise 100 percent of the Social Security contributions for new self-employed workers during the first two years. They can also benefit from a further year if they earn less than the Minimum Interprofessional Wage (SMI). Self-employed workers can benefit if they have not been registered in the two previous years, do not have outstanding debts, are not carrying out two different professions and are not invoicing through a cooperative.
Extremadura: Extremadura will also reward its new self-employed workers with aid of €960 per year which should be used for social security contributions. To be eligible they must maintain their business in the region for two years, not be a director or administrator for a commercial company, and not work for partners of public limited companies or civil societies. They must also not be registered as employees at the same time or for six months afterward.
All those self-employed workers in Extremadura who registered in the system during the second quarter of 2022 can also qualify.
Galicia: All new self-employed workers in Galicia will also be able to enjoy the zero quota from 2024. 100 percent of the social security payments will be subsidised during the first year only. It is expected to benefit some 10,000 new self-employed workers in the region.
Income tax returns
Another new rule in 2024 will be that all self-employed workers will be required to file their Income Tax Return, known as the Declaración de la Renta next year, regardless of their income.
Currently, those self-employed workers who earn an annual net income equal to or greater than €1,000 have to submit the Income Tax Return, but from 2024 everyone will have to do this, even if they earn less or have experienced losses and didn’t earn any more that year.
Digital improvement funding
From next year, Spain’s Kit Digital will also be available for communities of property owners and civil societies. The kits are aid for small businesses and the self-employed in the form of vouchers to carry out operations such as website creation, marketing campaigns and social media.
From 2024, both communities of property owners and civil companies with a commercial purpose of between 0 and less than 50 employees can apply for the kit. To be eligible, they must comply with the general requirements of the Digital Kit Program, like the other businesses. The deadline for applications will be December 31st, 2024.
READ MORE: How small business in Spain can claim €12,000 for digital improvements
The obligation to issue digital invoices has been delayed
Spain's Create and Grow Law, approved in September 2022, establishes that it will be mandatory for self-employed workers and small businesses to only issue electronic invoices, but it’s being delayed, largely due to the early elections this year.
Self-employed workers and companies with an annual turnover of more than €8 million will have one year to adapt and change over to electronic invoices.
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Social Security payments
2023 was the first year that social security payments based on real earnings instead of a set amount for everyone were introduced. Next year, this will continue and amounts will be adjusted accordingly.
In 2024 the amounts will be reduced further for those on low incomes, while they will increase for those who earn more. Social security fees will be reduced between €3 and €10 per month for anyone earning €1,300 or more, while anyone earning over 1,700 per month will pay between 2.5 and 6 percent more.
READ ALSO - GUIDE: How to register with Spain's social security system
For example, an autónomo who is just starting to be financially stable and earning €2,030 per month will pay €10 more per month in 2024.
READ ALSO: Will you pay more under Spain's new social security rates for self-employed?
Changes in reporting VAT
The self-employed associations and the Treasury are working to carry out the transposition of European Directive 2020/285, which came into force in 2020. This means eliminating the obligation to declare quarterly VAT statements for those self-employed workers who invoice less than €85,000 per year.
The EU requires this by January 2025, so the changes will begin to happen in 2024, however, it will not be fully in force until the following year.
This means that self-employed workers will not be required to issue VAT invoices and those who earn less than €85,000 will be able to choose between the current general VAT regime or take advantage of the new special franchise regime.
Zero social security payments for those in the Canary Islands, Extremadura and Galicia
In 2024, new self-employed workers in the Canary Islands, Extremadura and Galicia will join those in some of Spain’s other regions (such as Madrid) and benefit from not having to pay social security when they first sign up.
Canary Islands: In the Canary Islands, the zero quota will apply from January 1st, 2024. The region will subsidise 100 percent of the Social Security contributions for new self-employed workers during the first two years. They can also benefit from a further year if they earn less than the Minimum Interprofessional Wage (SMI). Self-employed workers can benefit if they have not been registered in the two previous years, do not have outstanding debts, are not carrying out two different professions and are not invoicing through a cooperative.
Extremadura: Extremadura will also reward its new self-employed workers with aid of €960 per year which should be used for social security contributions. To be eligible they must maintain their business in the region for two years, not be a director or administrator for a commercial company, and not work for partners of public limited companies or civil societies. They must also not be registered as employees at the same time or for six months afterward.
All those self-employed workers in Extremadura who registered in the system during the second quarter of 2022 can also qualify.
Galicia: All new self-employed workers in Galicia will also be able to enjoy the zero quota from 2024. 100 percent of the social security payments will be subsidised during the first year only. It is expected to benefit some 10,000 new self-employed workers in the region.
Income tax returns
Another new rule in 2024 will be that all self-employed workers will be required to file their Income Tax Return, known as the Declaración de la Renta next year, regardless of their income.
Currently, those self-employed workers who earn an annual net income equal to or greater than €1,000 have to submit the Income Tax Return, but from 2024 everyone will have to do this, even if they earn less or have experienced losses and didn’t earn any more that year.
Digital improvement funding
From next year, Spain’s Kit Digital will also be available for communities of property owners and civil societies. The kits are aid for small businesses and the self-employed in the form of vouchers to carry out operations such as website creation, marketing campaigns and social media.
From 2024, both communities of property owners and civil companies with a commercial purpose of between 0 and less than 50 employees can apply for the kit. To be eligible, they must comply with the general requirements of the Digital Kit Program, like the other businesses. The deadline for applications will be December 31st, 2024.
READ MORE: How small business in Spain can claim €12,000 for digital improvements
The obligation to issue digital invoices has been delayed
Spain's Create and Grow Law, approved in September 2022, establishes that it will be mandatory for self-employed workers and small businesses to only issue electronic invoices, but it’s being delayed, largely due to the early elections this year.
Self-employed workers and companies with an annual turnover of more than €8 million will have one year to adapt and change over to electronic invoices.
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