Changes for autónomos in Spain: the SLB view

Hot off the press from eldiario.es – some changes for autónomos in Spain, just approved by a majority in the Spanish congress and due to come into law in the coming months. In brief:

Changes for autónomos in Spain

The social security quota

Hoping for the long-promised abolishment of the fixed quota (around 270€ per month no matter what you earn) – to be replaced by a contribution based on earnings? Well, keep dreaming. The change is simply about when you register as autónomo. From now on, they’ll no longer charge you the full month’s quota if you register after the first of the month. It’ll also be possible to change your contribution base (base de cotización) up to four times a year, rather than two.

The introductory flat rate

Again, this is one for new autónomos. The introductory social security flat rate of 50€, which is currently for your first 6 months, will be extended to a year. For the whole second year you can also expect to pay a reduced rate.

Lighter sanctions for late payments

At the moment, late social security payments are punished with a surcharge of 20% (in some cases 35%). The penalties will now be 3% if you pay up the next month, 5% for the month after, 10% for the third month and 20% thereafter.

Improvements in maternity benefits

Apparently new mums (and dads) will now receive 100% of the allowance based on their contribution. We’re a little lost here, as to our understanding this is also the current arrangement.

Water and electricity are now tax-deductible

Actually, this has implicitly been the case since Madrid’s Superior Justice Tribunal ruled last year that work-at-home autónomos can deduct a percentage of their electricity, gas and telephone bills from their taxable base. All the new legislation will do is bring Hacienda (the tax office) in line with this ruling.

Our two bob

Although some points (especially maternity leave) need further clarification, our initial reaction – as you might just have got from our subtle editorial tone – is one of disappointment. There are plusses for new autónomos, but for the longer-suffering it is, to say the least, entirely underwhelming. Given that the proposals were a result of the pact between the Partido Popular (Popular Party) and Ciudadanos (Citizens) to invest Mariano Rajoy as president – and Ciudadanos have explicitly promised much more for freelancers – we can’t help but question the capacity of the “new politics” to radically shake up the old. As long as freelancers continue to be treated as if they are all prima facie tax dodgers, there is still much to be fought for.

There are 4 comments so far

  • 4 years ago · Reply

    Thank you for the update, I wasn’t aware of this new law.

  • Myles Klynhout
    4 years ago · Reply

    Thanks for the post Neil. I completely agree that the new changes do not go far enough to support freelancers. I’m afraid under the current government it may be another four years before we see changes to bring working conditions for freelancers in line with countries such as England & France as detailed here: //infoautonomos.eleconomista.es/blog/cuanto-pagamos-los-autonomos-espanoles-con-respecto-a-los-europeos/

    Barcelona Activa, who have have been up and running since 1986, are a local development agency of the Barcelona City Council tasked with (among other items) ‘providing business support for entrepreneurs and start ups through the management of business incubators and taylor-made programmes.’ In 2008, they had a budget of approximately €24.000.000. Just over 50% of the funds were provided by the Barcelona City Council, 27% from the Catalan government, 3.5% from the EU, and the Spanish central government chipped in 1.5%. Although I can not argue with the support they have been able to provide ‘NEW start ups’, I question whether these funds could have been, or could now be, better allocated to ease the burden on freelancers and small business owners who have been up and running for over 2 years and seemingly forgotten about.

    That said, I would like to offer two pieces of advice for those toying with the idea of freelance life (It is not all doom and gloom for newbies):

    Firstly, be sure to check out //emprenedoria.barcelonactiva.cat/emprenedoria/en/. You will need to do a short training course (can be done in English) which then gives you access to their resources and support centre. Make an appointment and head down to Barcelona Activa to have a chat. They are there to help and can do so in Catalan, Spanish and English. When taking the plunge into freelance life at the start of 2016 they were there to answer any questions I had and arrange the necessary appointments. This combined with the help from Neil & Irene at SLB (thanks for queuing with me in the cold for hours on end at the social security office & much more) set me on my way.

    Secondly, start up funds might be available for you to access. Many teachers working for private English academies (on the books) don’t realise that they have been making mandatory contributions to their unemployment benefits or ‘el paro’ from their monthly salary. If you have never used your unemployment payments over the Summer, these contributions can be accessed to help you start out as a freelancer. You can apply to have these provided either in a lump sum payment to be used towards set up costs and equipment (a full business plan is required) or as ongoing instalments to off set your monthly social security payments until the pot runs out (no business plan required). A more comprehensive description can be found in this PDF (in Spanish sorry) //empresarias.camara.es/estaticos/upload/0/007/7571.pdf.

    Finally, don’t be caught out. Paying only 7% IRPF is not a discount! As a first year you are able to deduct just 7% IRPF (opposed to standard 15-21%) on your invoices which the client then passes onto the tax man on your behalf. However, depending on your earnings, 7% won’t cut it and the tax man will be knocking on your door with a rude surprise at the end of the year. For every invoice you bill, keep a further 10% aside in a separate savings account ready for tax time- hopefully you will accrue enough business expenses that you won’t need to hand it over.

    So, does all this help the plight of the freelancer in Spain? Yes and no. I have felt comfortable during my first year as a freelancer due to the subsidies on offer. However, as my social security contributions rise incrementally every 6 months from now on, I feel I will need to further tighten my belt.

  • David Moxon
    4 years ago · Reply

    Do you reckon that if you start an autonomo before these new measures come into place, the six months of 50€ a month you get at the moment, will be extended to 12 months? i.e. imagine I have another two months at 50€ when the new law is passed, will I get another 6 ?? 🙂 or will it just be for those autonomos that start after the law is passed?

    • SLB Admin Author
      4 years ago · Reply

      Hi David and thanks for your comment. At the moment the details are a little vague as this is still only a proposal. The congress has approved it but the details still need to be thrashed out. We’ll keep you posted but I imagine they’ll need to put a start date on it, and it may be that people who register before this won’t have access. This is how it works in the health service when they introduce a new vaccine – if your kid is born the wrong side of the start date, they don’t get it! Anyway, if you can, it might be worth waiting a bit so you can take full advantage when it kicks in.

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