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by Soluciones Moncloa
A huge percentage of autonomos are paying more taxes than they need to.
Thinking of working as a freelancer, or as is commonly known in Spain, becoming an autónomo? It is rather bewildering when you arrive in a new country with a different culture, different system and different ways of doing things. Here is a brief guide which will help you.
The first thing you need is to obtain a N.I.E. (Número de Identificación de Extranjero). Depending on whether you are a citizen of a country belonging to the EEC or not, the procedure for doing this will differ.
Once you have the N.I.E. the next step would be to register with the tax authorities (Agencia Tributaria). This is perhaps the most important step of all. Depending on the economic activity you are going to perform, you will have to choose an I.A.E. code (Impuesto de Actividades Económicas), from a list drawn by the tax authorities. This I.A.E. is not a tax to be paid by the freelance (autónomo), as the name implies, but a way to regulate the economic activity.
With your I.A.E. code, you can now register with the social security authorities (Seguridad Social), commonly known as becoming an autónomo. The code you got from the tax authorities will determine the code you are given by the social security authorities.
You are now registered as a foreign citizen authorized to work in Spain, with the Tax Authorities (Agencia Tributaria) and with the Social Security Authorities (Seguridad Social).
Are you now ready to start working? Yes, and to start paying your social insurance at the end of each month. The amount you pay will depend on how you have registered, and there are some discounts for new autónomos with certain conditions attached.
Income Tax will also have to be paid each quarter. The amount you pay will depend on your profits and how you report them. Some activities will also have V.A.T. (Value Added Tax) or I.V.A. in Spanish (Impuesto Sobre el Valor Añadido). The amount you pay on this will also depend on the way you have registered.
VERY IMPORTANT: taxes must be paid on time or you will have to pay penalties and interest which could increase your tax bill substantially. The best thing to do is to seek expert advice.
Soluciones Moncloa is run by a native English-speaking British professional who has lived in Madrid for 30 years. John worked as a senior auditor for Spain in Deloitte & Touche and he worked as a Finance Director for several companies.
As an autonomo, you get the same service as the big firms, only at a fraction of the price. Talk to John today to see how he can save you money.