Starting a self-employed activity in Spain entails various tax obligations. From the date of registration (regardless of whether any income is generated), self-employed persons are required to file quarterly tax returns – the so-called “Modelos”. These serve, among other purposes, as advance payments towards the annual tax liability.

The most important tax returns that must be filed regularly are:

• Modelo 130 – Advance payment of personal income tax for the self-employed

• Modelo 303 – Quarterly VAT return (IVA)

• Modelo 349 – Recapitulative statement of intra-Community transactions

Unlike in Germany, these returns must generally be filed by the 20th day of the month following the end of each quarter (e.g. by 20 April for the first quarter). An informal estimate, as may be used in Germany for advance income tax payments, is not permitted in Spain. The actual income and expenses for the respective quarter must always be declared.

Modelo 130 – Advance Payment of Personal Income Tax

Under this return, 20% of the net profit generated during the quarter (income less expenses) is generally paid to the Spanish Tax Agency on a quarterly basis as an advance payment. The individual tax rate is only determined as part of the annual personal income tax return (Declaración de la Renta), taking into account the taxpayer’s worldwide income as well as their personal and family circumstances. If the effective tax rate is below 20%, any excess amounts paid are refunded.

Modelo 303 – Quarterly VAT Return (IVA)

Self-employed persons are required to declare and pay the VAT charged on their outgoing invoices on a quarterly basis. At the same time, input VAT paid on incoming invoices is deducted. The resulting difference must be paid to the Spanish Tax Agency. If the input VAT exceeds the output VAT (e.g. in the case of services provided to customers in other EU countries or investments), a negative balance arises. This balance may be carried forward to the following quarter. If the balance remains negative at the end of the year, a refund may be requested. However, in order to avoid unnecessary tax inspections, it may be advisable to carry the balance forward to the following year until the refund amount exceeds €300 (for individuals) or €2,000 (for companies).

Modelo 349 – Recapitulative Statement of Intra-Community Transactions

Modelo 349 is a purely informative return and does not involve the payment of any tax. It is used to report intra-Community transactions (supplies of goods, services and acquisitions within the EU).

Important information:

• Filed quarterly; where the volume of transactions exceeds €50,000 per quarter, it must be filed monthly.

• No filing is required if no intra-Community transactions (purchases or sales using a VAT identification number) have taken place.

Other Relevant Modelos (Depending on the Circumstances)

• Modelo 111: Declaration and payment of withholding tax on employees’ salaries as well as on professional fees (e.g. fees paid to self-employed professionals).

• Modelo 115: This return must be filed where commercial premises are rented from a private individual. In this case, 19% of the rental amount must be withheld and paid to the Spanish Tax Agency.

Regional Particularity – Canary Islands

Different rules on indirect taxation apply to activities carried out in the Canary Islands. Instead of filing Modelo 303 for VAT, the applicable tax is declared using Modelo 420. The return is filed with the Canary Islands Tax Agency (ATC).

Advice and Registration as Self-Employed

Although registration as self-employed can be completed personally if you have the necessary language skills, it is advisable to seek professional advice beforehand regarding the tax consequences and possible reductions in Social Security contributions. Many firms offer both registration and the filing of quarterly tax returns for a fixed fee, while some specialise specifically in advising and assisting self-employed professionals and business owners. Through firms authorised as a PAE, registration can be completed in less than 48 hours.

Your PAE: Sander, Santos & Partners
As a PAE (Punto de Atención al Emprendedor) authorised by the competent Spanish Ministry of Economic Affairs, our firm has direct access to the relevant public authorities, the Spanish Tax Agency and the Social Security authorities. This enables us to complete the most important administrative procedures electronically, accelerate the registration process and avoid the need for you to attend the authorities in person.

Registration as self-employed within 3 working days and without the need to visit the authorities in person. Further information.

As lawyers, tax advisors and a registered PAE, our firm will be pleased to assist you in analysing your specific situation, carrying out the relevant administrative procedures and preparing and filing the necessary tax returns on your behalf. Further information about our services for self-employed professionals and business owners can be found in the section Business. 

If you are interested in our services or have specific questions regarding this topic, please do not hesitate to contact us by email or telephone.

Author:

Lisa Wörfel
Tax Advisor
info@sspartners.es
Tel: (+34) 951 12 13 06
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