Question about the Spain Digital Nomad Visa
Spain digital nomad visa holders: Once you register as autónomo you’ll begin paying a tax flat rate of 24% of your income. Is this correct? I’ve been reading different things but this seems to be the most common answer on Google searches.
Answers
These are the answers of some Facebook group members:
”I believe the 24% is the Beckham Law scheme which is not in play yet”
”Not correct, as an Autónomo Spain, you pay an advance on your income tax through trimester income tax declarations. 20% over invoiced income. Then, the following year, you file your RENTA income tax return over worldwide income in the year before. Percentage increasing in brackets, from 19 to roughly 45%, but also with allowances depending on your personal situation”
”In addition to the trimestral tax on your income, you will also be paying your Social Security contribution monthly.
In conclusion, according to Spainguru Facebook group members, the perception that autónomos pay a 24% flat tax is not accurate. Instead, they make trimestral payments at on invoiced income, with the final tax rate ranging from 19% to 45% based on yearly worldwide income and personal allowances. Moreover, autónomos also have monthly Social Security contributions.
The primary taxes autónomos must pay are the Value Added Tax (IVA) and the Personal Income Tax (IRPF). The IVA is a quarterly tax that applies to the consumption of goods and services, while its calculation involves the difference between IVA collected on income invoices and IVA paid on necessary expense invoices. It’s important to note that Spain has multiple IVA rates, including general (21%), reduced (10%), and super-reduced (4%), and not all professional activities are subject to IVA.
The IRPF, or Personal Income Tax, is also mandatory for autónomos and directly affects the income earned from their economic activities. Some autónomos may need to apply IRPF directly on their invoices, with clients remitting these withheld amounts to the tax authorities. These payments are then accounted for when filing annual income tax returns.
Throughout the year, autónomos must submit various tax forms on a quarterly or annual basis, depending on their specific circumstances. These forms cover both IVA (3XX series) and IRPF (1XX series) taxes. The filing deadlines are generally in the first 20 days of January, April, July, and October. These filings provide a summary of the autónomo’s activity for the preceding three months.
In addition to quarterly forms, there are also annual tax forms that summarize the autónomo’s IVA and IRPF activities for the entire year. These typically need to be submitted between January 1st and January 30th of the following year. It’s crucial for autónomos to retain all related documentation for at least five years, as tax authorities may request documents to verify compliance. Ensuring timely and accurate submission of these tax forms is essential for self-employed individuals in Spain.
We recommend you to read this related article: “How challenging is it to file taxes in Spain without a tax accountant compared to hiring one?“
