Self Employed

Many people decide to become self employed (autonomo) in Spain. This is easily done but you have to remember that it has to be done correctly and in accordance with the laws. Firstly you will need to have your NIE if you are not a Spanish resident and then register with the Social Security as autonomo in order to receive your Social Security number. As an autonomo you are responsible for paying your own Social Security, you will receive the payment slips to take to your bank in order to do this, as en example a single person will normally pay around 250 euros per month.

When you raise your invoices to your clients you will need to add VAT at 16% to your fee and deduct 15% with-holding tax. This with-holding tax is very confusing if you have not seen it before, but basically it is a method of you paying a portion of your income tax as you receive your “income” via your invoices. Your customer will pay this over to the tax authorities on your behalf every quarter. The 16% VAT that you have added to your invoices you will need to pay over to the tax authorities every quarter also.

The benefit of being autonomo is that you can have many clients and not be tied to just one employer. One of the disadvantages is that you cannot claim any expenses against your income. As such many people start off as autonomo in order to get a business started and then form a company in order that the business expenses can be claimed against profit.