About us - Contact us - Site Map - Legal Notice - Select Language      
 
 
About us
  Our Office
  Our Staff
 
Conveyancing
  Introduction
  Process
  FAQs
  Propert related tax
 
Accounting & Tax
  Company Tax & Self Employed
  Company Tax
  Self Employed
 
  Resident & Non residents Tax
  Introduction
  No-Resident Tax
  Resident Tax
  Property related tax
  UK-Spain Double Tax Treaty
 
Setting up a Company
  The service
  Guide
  FAQs
 
Mortgages
  The service
  FAQs
  Associated Banks
  What we can do for you
  Mortgage calculator
 
Litigation & Legal Services
  The service
  Property dispute resolution
  Inheritance
  Inheritance taxes
  Wills
 
  Contact us
  Site Map
 
 
Subscribe to the e-newsletter
 
  View Last Newsletter
 
Self - Employed
 
A self-employed worker or sole trader is the physical person who usually, personally and directly carries on the gainful business activity, without being under a contract of employment and although he or she may use the paid services of other persons.
 
This figure exists in Spain and it's a very worthwhile way of starting a small-scale business, because it makes it very cheap and easy to start and run. It's often used as a way of starting a business with a view to forming a company later on.
 
Advantages:
 
  • Quick and easy to get up and running, because no legal personality is required, only a physical one.  One doesn't have to set anything up or put in a minimum amount of capital.
  • Low cost, and entitlement to health care under the Spanish Social Security system: the self-employed person will pay a contribution each month to the Social Security system (approximately €250; reductions exist, for the under-30's for example).

    These contributions entitle the self-employed worker to health care and a pension when he or she comes to retire.  If he or she is off work sick, from day 4 onwards he or she can claim financial aid from the Social Security system.

    However, although there are a few advantages, the status of a self-employed worker isn't completely comparable with that of an employed worker. But, in recent years in Spain, an attempt has been made to provide working conditions for the self-employed which are comparable with those of employed workers. Changes in the law to this effect are expected shortly in Spain. 

    On 29-09-2006 a Draft Statute Bill was passed which proposes improvements such as: the opportunity to retire early; a special rate of contributions for part-time working in certain types of business activity; maternity and paternity leave; and risk benefits during pregnancy or breastfeeding. 

    Sons and daughters under the age of 30 will benefit from reductions in payments to the Social Security system when they work as self-employed persons within the family business. And a type of aid similar to unemployment benefit will be brought in for when a self-employed worker gives up their business, trade or profession. 

    These significant improvements will, in some cases, entail a slight increase in contributions to the Social Security system, but the contributor's additional efforts will be repaid by quality social protection sufficient to cover all his or her needs.

    All these measures are going through Parliament now.  Therefore, they'll become Law and come into effect when they've been approved by the Congress and Senate.
  • Tax obligations are simpler than in companies: it isn't necessary to get entered in the Companies Register.
 
Drawbacks:
 
  • There's no difference between business and personal assets, therefore personal assets may be at risk if the business cannot pay its debts and meet its obligations.
 
Fiscal process and obligations
 
We take it upon ourselves to organize everything and once we have the documents we need, everything can be in place for the start of business in the space of a fortnight.
 
We need the person who is going to start up the business to obtain their NIE (foreigner's ID number), an address for tax purposes in Spain, a bank account in their name from which contributions may be collected by direct debit and a description of the type of business which they are going to carry on.
 
With this information we register their business with the Tax Office and Social Security system, obtain their Social Security number and get everything ready in a very short time.
 
Fiscal obligations:
 
  • The self-employed person has to issue an official invoice in his or her name for the services provided, and must charge VAT on his or her sales.
  • One has to make quarterly and annual VAT returns and pay a percentage of profits (quarterly income tax payments on account).
  • VAT incurred in relation to taxable goods and services is recoverable.
  • The businessperson is taxed on the business profits, and must declare them on the Personal Income Tax return.
 
  Offices in Spain (Murcia & Almeria)
& Portugal (Algarve)

+34 968 575 650
Contact us
Our Office - Our Staff - Conveyancing Introduction - Conveyancing Process - Conveyancing Faqs
Property Related Tax - Acounting Company Tax - Accounting Resident Tax - Non Resident Tax
Setting up a Company: The Service - Setting up a Company Faqs - Mortgages Services Mortgages Faqs - Litigation & Legal Service - Legal Inheritance - Legal Inheritance Taxes