The period of annual tax returns in Spain starts in early April, with tax returns for the year 2023-2024 now due by 1st July.
Commonly referred to as la renta for short, online filing is now open, but there are a few changes this year that people should know about to stay on top of their tax liabilities and available deductions – including:
- 15% deduction from the purchase value of registered electric vehicles (including expenses, taxes, and public subsidies) and charging point installation costs
- 1% increase to the capital gains tax rate for income over 200,000€ or 300,000€
- Up to 50% deduction for shares or holdings in start-up companies up to 100,000€
Most significantly, if you earn money through self-employment in Spain, there are some changes that apply specifically to autónomos (freelance workers) regarding filing requirements and additional deductions.
Here’s what you should know about declaring your income in Spain and filing a tax return this year if you are self-employed.
Compulsory tax returns
In previous years, self-employed people in Spain were only obligated to file a tax return if it was their first year of residing or working in Spain, or if their earnings for the year were above a particular threshold.
For example, self-employed or contract workers earning over 22,000€ annually and property owners earning more than 1,000€ a year in rental income would have to submit a declaration to the Spanish tax agency.
Now, regardless of income level or whether you made profits or losses in 2023-2024, it is mandatory for all self-employed people to submit a tax return and pay any tax owed within the filing period (ending 1st July).
Online filing is available from 3rd April, declaring over the telephone is possible from 7th May, and filing in person at a tax office is possible from 3rd June. Phone and office appointments are available by request only, and close on 28th June.
Increased deductions
If it’s the first year of registration as a self-employed earner, a deduction of 20% of profits is available – with the same right to deductions as a regular company paying corporation tax (e.g. research and development costs).
If you have an actual self-employed business, known as a small to medium enterprise (SME), you will be taxed through the module system. In this case, you can now reduce net returns by 10% instead of the previous 5% – and if you work from home, you can deduct up to 30% for work-related expenses.
Those who carry out professional self-employed activities without being an actual business will be taxed through the direct estimation system, which calculates taxes according to actual income and deductible expenses. In this case, you can deduct 7% of expenses to calculate profit or loss, increased from 5%.
These deductions can include business-related vehicle usage, training expenses, research and development expenses, regional tax reliefs, and monthly Social Security payments.
Help with self-employed tax returns
The Spanish tax agency does not have full information on every transaction a self-employed worker carries out in Spain, which is why it’s essential for the individual to provide complete verification when filing to avoid errors that could cause problems – potentially resulting in penalties for submitting incorrect information or missing deadlines.
This can be especially stressful if you do not speak Spanish fluently, making it difficult to fill out the forms or liaise with the Spanish tax authorities – even more so if you don’t actually live or work in Spain full-time or work remotely, and are considered a non-tax resident, as the process can be different.
To ensure that everything goes smoothly and you file your annual tax return correctly and pay on time, it can help to hire English-speaking solicitors in Spain to handle your tax affairs on your behalf.
At Manzanares Lawyers, we provide a selection of legal services, assisting with everything from Spanish visas and real estate to non-resident tax in Spain. For help with filing tax returns in Spain, you can get in touch with us by phone or email, and a member of our team will be glad to advise you further.
