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Errors When Filing Taxes as Self-Employed in Spain

Errors When Filing Taxes as Self-Employed in Spain

Filing taxes as a self-employed in Spain can be a challenging task, often filled with misconceptions and potential pitfalls. Read this article by Entre Tramites.

Let’s first dive into the definition of self-employment and its requirements:

Definition of Self-Employment and Requirements for Registration


In Spain, a self-employed person is someone who carries out economic activity on their own behalf regularly, personally and directly, without being subject to an employment contract. To register as self-employed, certain requirements must be met, including:

  • Obtaining a Tax Identification Number (NIF) or Foreigner Identification Number (NIE).
  • Enrolling in the Special Regime for Self-Employed Workers (RETA) of the Social Security system.
  • Submitting the census declaration to the Tax Agency to report the start of economic activity.
  • Meeting specific requirements for the economic activity, such as licenses or special authorisations, as appropriate.

Common Mistakes When Filing Taxes as Self-Employed in Spain

Now that we understand the definition and requirements for self-employment in Spain, let’s explore some of the most common mistakes to avoid, along with key information to help you navigate the tax landscape effectively:

Misunderstandings About Deductible Expenses


One of the main mistakes self-employed individuals make is misunderstanding which expenses are deductible. While there are numerous expenses that can be deducted to reduce taxable income, such as office supplies, travel expenses and professional services, not all expenses qualify. It is essential to understand the specific criteria for deduction and maintain accurate records to support these deductions.

Incorrect Classification of Income


Another common mistake is incorrectly classifying income. Self-employed individuals may receive income from various sources, including sales of goods, services rendered and investments. Each type of income may be subject to different tax rates and filing requirements. Failing to classify income correctly can result in underpayment or overpayment of taxes.


Failure to Maintain Adequate Records


Keeping thorough and organised records is crucial for accurate tax filing. This includes invoices, receipts, bank statements and other financial documents. Without proper records, self-employed people may struggle to justify expenses, which can result in potential fines or tax audits by the tax authorities.


Ignoring Tax Deadlines


Failing to meet tax deadlines can have serious consequences, including fines and interest charges. Self-employed individuals must file several tax returns throughout the year, including quarterly income tax returns (Modelo 130), quarterly VAT returns (Modelo 303) and annual income tax returns. It is essential to stay informed about deadlines and ensure timely filing of all required documents.


Not Seeking Professional Advice


Navigating taxation as a self-employed individual can be complex, especially for those unfamiliar with the Spanish tax system. Not seeking professional advice from a qualified accountant or tax advisor like Entre Trámites can provide valuable guidance on tax planning, deductions, and compliance requirements.

Avoiding common mistakes and staying informed about tax regulations and registration requirements are essential for self-employed individuals in Spain. Schedule a completely free consultation with us and you’ll be able to resolve all your doubts regarding tax obligations and take advantage of the benefits available in the Spanish territory for you.

If bureaucracy in Spain is feeling overwhelming on top of all the stressors related to your life abroad, Therapy in Barcelona are here to help support you. Get in touch with us for a free 15-minute discovery call today.

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