In Spain, self-employed persons are generally understood to be individuals who are not employed under an employment relationship and who personally and habitually carry out an economic activity on their own account, using their own means of production and organising their activity independently. EU citizens are subject to the same rights and obligations in this respect as Spanish citizens.
In the age of booming e-commerce and dynamic marketplaces, retailers are facing increasingly complex tax challenges. Particular attention must be paid to the Recargo de Equivalencia, a special regime that imposes specific VAT requirements on retailers.
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.
Purchasing a vehicle through a Spanish Sociedad Limitada (S.L.) is a common consideration for business owners, particularly shareholder-directors. In Spain, this may offer certain tax advantages, but it also entails specific obligations. The appropriate approach depends largely on how the vehicle is used and whether it is a new purchase or a vehicle that is already privately owned by the shareholder.
The number of people living in Spain who continue to hold interests in German partnerships is steadily increasing. This particularly affects partners in a German civil-law partnership (GbR) who work from Spain or carry out their activities partly in both countries.
In order for expenses to be tax-deductible as business expenses in Spain, they must generally be supported by a corresponding invoice (Factura). Unlike in other countries, such as Germany, Spain does not provide for automatically applicable flat-rate deductions, and the possibility of substantiating expenses by means of receipts (Recibos) is very limited.
Holding structures play a central role in international tax planning. They enable corporate groups to manage shareholdings efficiently, distribute profits in a tax-efficient manner and avoid double taxation.
In Spain, certain professional services are subject to withholding tax on personal income tax (IRPF withholding – Retención IRPF). This is an advance payment of income tax that is not paid directly by the professional, but instead withheld by the Spanish business client and paid to the Spanish Tax Agency.
The introduction of electronic invoicing in Spain represents a significant change in the country's economic and legal framework. But what exactly does this reform involve, and which deadlines do companies and self-employed professionals need to be aware of?
More and more self-employed professionals and businesses are generating revenue through digital channels – whether through downloads, online courses, subscriptions, apps or platforms such as Amazon or Etsy.
From a tax perspective, it is essential to determine whether the activity constitutes an electronically supplied (digital) service or merely a traditional service provided online. This classification determines the country in which VAT is due, the applicable VAT rate and whether the OSS scheme must be applied.
The term freelancer or independent professional is commonly used to refer to a person who, on the basis of a service agreement, carries out specific assignments independently and, as a general rule, personally, without being employed by the client.
“I sell through Amazon.”
This is a statement we regularly hear in our advisory practice. However, on its own, it says surprisingly little about how an activity should be classified for tax purposes. Earning money through Amazon does not automatically mean that you are engaged in retail. What matters is how the specific business model actually works.
E-commerce, as a form of retail trade, is characterised by automated processes and international sales markets. Particularly within the EU, the One-Stop Shop (OSS) enables small and medium-sized businesses to sell products throughout the EU without having to establish complex and costly local administrative structures, as separate local VAT registrations are generally no longer required.
In recent years, influencer marketing has developed rapidly in Spain, not least because of the attractive lifestyle the country offers. Sunshine, beaches, Mediterranean cities and a relaxed way of life make Spain an ideal setting for lifestyle content shared daily on platforms such as Instagram, TikTok, YouTube and Twitch. Whether fashion, travel, gastronomy or fitness – many influencers take advantage of precisely these factors to create authentic content with a wide reach.
Depending on your involvement in the day-to-day business, both business owners and company directors are responsible for ensuring that invoices are issued correctly. Even if your accounting department independently reviews and correctly records incoming invoices, it is always advisable, even if you are not directly involved in invoicing, to review at least the larger invoices once a quarter.
Entrepreneurs and self-employed professionals planning to move their residence to Spain should consider more than just the pleasant climate and quality of life. Far more important are the tax rules applicable in both countries. A key issue in this context is the concept of a “permanent establishment”, which plays an important role in international tax law and, in particular, under the Double Taxation Agreement (DTA) between Germany and Spain. For entrepreneurs and self-employed professionals, it is essential to understand how and where their business profits are taxed in order to avoid unpleasant tax surprises.
In Spain, as a general rule, all economically active persons (employees and business owners) are required to contribute to the statutory pension and Social Security system (Seguridad Social). Although everyone contributes to the same statutory pension and Social Security system, there is an important distinction depending on the type of employment or professional relationship.
The GmbH & Co. KG is one of the most popular business structures in Germany, combining the tax advantages of a partnership with the limited liability of a corporation. But what happens when a partner moves their residence abroad, for example to Spain?
When the Panama Papers revelations shook the world in 2016, one thing became clear: offshore companies are not only used by corporations and financial experts, but also by smaller taxpayers, celebrities and politicians seeking to manage assets discreetly.
Since 2013, individuals starting a self-employed activity in Spain have been able to benefit from both tax relief and reduced Social Security contributions. The €80 monthly Social Security contribution and the 20% reduction in taxable net income during the first two years can make self-employment a genuinely attractive alternative.
The Spanish Sociedad Limitada (S.L.) is by far the most commonly used type of company in Spain. It is comparable to the German GmbH and can be incorporated with a share capital of just €3,000. This apparent simplicity, however, often leads to insufficient corporate planning and, in many cases, can ultimately contribute to the failure of the company.
Particularly in cross-border e-commerce using the OSS (One-Stop Shop) scheme from Spain, businesses are often required to finance VAT for up to one year. This is because VAT must be paid separately in each country of consumption, while input VAT can generally only be reclaimed after filing the final VAT return in January of the following year. Further information about the OSS system can be found in our article: E-Commerce and the OSS (One-Stop Shop) Scheme.
When structuring the ownership of real estate or financial assets in Spain, many investors choose to establish a company. However, where the company's principal purpose is to hold, manage or exploit real estate or other assets, it is necessary to determine whether the company carries out an economic activity or is classified as an asset-holding company (sociedad patrimonial) for Spanish tax purposes.
The remuneration of shareholders (shareholder remuneration) is one of the key areas reviewed by the Spanish Tax Agency. It automatically falls within the scope of related-party transactions (operaciones vinculadas), as shareholders and their companies are deemed to have a special relationship under Spanish tax law. This article explains the legal framework, provides practical guidance and highlights the most common tax risks.
The internet and the evolution of modern marketing have significantly increased the visibility and reach of businesses offering services and marketing products both nationally and throughout the European Union. This not only facilitates customer acquisition but also makes it easier to promote products and services across international markets.
While the concept of a permanent establishment plays a key role in international tax law when determining where business profits are taxed, a foreign subsidiary is a separate legal entity and therefore does not constitute a permanent establishment of its parent company. Nevertheless, even where no permanent establishment exists for tax purposes, important tax issues arise within a corporate group, particularly with regard to the distribution of profits.
Globalisation, the digital age and the rapid expansion of e-commerce have enabled many businesses to access international markets and expand their operations across national borders.
Donations made to organisations qualifying under Law 49/2002 are directly tax-deductible in Spain for both individuals (Personal Income Tax) and companies (Corporate Income Tax):
Originally associated mainly with the software and telecommunications sectors, remote work has now become common across a wide range of industries. For many employees, this creates the opportunity to fulfil what was once an unattainable dream: living in Spain while working remotely.
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