Because freelancers are not Solar Staff's employees and we don't pay taxes on their payouts, they must declare any income received via Solar Staff by themselves.
To carry on tax accounting in Spain for your Solar Staff income, you need to:
Be a tax resident
Obtain a tax ID number
Follow the applicable tax obligations
Tax residence
Spain taxes its residents on their worldwide income, while non-residents are taxed on their Spanish-source income only.
Individuals are resident in Spain for tax purposes if they meet at least one of the following criteria:
Spend more than 183 days in Spain during a calendar year.
Have Spain as their main base or center of activities or economic interests (for example, if their spouse and underage dependent children permanently reside in Spain).
Under Spanish law, the concept of part-year resident does not exist. An individual is either resident or non-resident and is taxed as such for the entire year.
Spain has double taxation agreements with a number of countries (full list), the provisions of which may override the applicable tax residence rules and other provisions of national legislation.
Tax ID number
There are two types of tax identification numbers in Spain:
NIF (número de identificación fiscal): Tax number for Spanish nationals.
NIE (número de identidad de extranjero): Tax number for foreigners in Spain.
IMPORTANT! For residence permit applicants in Spain, NIE is assigned automatically.
Otherwise, NIE can be obtained from the Immigration and Customs Commissioner General (Comisaría General de Extranjería y Fronteras) in Spain or at a Spanish embassy elsewhere.
To obtain a NIE in Spain, you need to:
Make an online appointment.
Fill out and print out the application.
Provide a document (both the original and its copy) confirming the existence of financial or professional interests in Spain (for example, a real estate purchase agreement, a mortgage agreement, an employment contract, and so on).
Provide identity documents and their copies.
NIE can be assigned immediately, but sometimes it takes several days or weeks for it to be issued.
To carry on business activities in Spain, you will also need to obtain a social security number (el número de la Seguridad Social, NUSS), which you can apply for online.
Taxes and contributions payable by freelancers
Tax liabilities in Spain depend on the freelancer's status and/or fulfillment of certain conditions.
Spain has three tax statuses for Solar Staff users to choose from:
Individual (persona física):
IMPORTANT! Solar Staff does not have the option to choose a tax status for freelancers based in Spain, but you can fill in your tax ID in your account.
Read on for more details.
Individuals
The status of an individual (persona física) does not require any special registration and applies to employed individuals and freelancers alike.
Individuals are liable to pay the following taxes and contributions:
Personal income tax (impuesto sobre la renta de personas físicas, IRPF) is levied at a progressive rate and calculated based on individuals' annual income.
The 2023 tax rates were as follows:
Taxable income, € | Tax rate, % |
Up to 12,450 | 19% |
12,450–20,199 | 24% |
20,200–35,199 | 30% |
35,200–59,999 | 37% |
60,000–299,999 | 45% |
Over 300,000 | 47% |
IMPORTANT! Depending on the type and amount of income, the taxpayer may be exempt from having to file and pay the tax (for example, if income generated from services does not exceed €1,000 per year). To learn more, see here.
Tax deductions. The types of deductions from taxable income that individuals are eligible for include regional deductions and those that do not depend on the individual's place of residence (registration) and fixed amounts depending on the sex and marriage status of the individual.
Filing and paying tax. Individuals must submit a tax return (modelo 100) along with supporting documents between April and June (reporting for 2022 took place from April 11 to June 30, 2023) in person to the tax inspectorate at the place of the taxpayer's registration or online. The tax is payable within the same time frame. There is no need to fill out the tax return manually: it is generated at the portal or via the Renta WEB service. You can also use the portal to send any missing data for the declaration or make changes to it. To learn more, see here.
Special tax regime under the Beckham Law (la Ley Beckham)
Foreign citizens can make use of this tax regime for the first six tax periods (that is, six years) from the date of obtaining Spanish tax residency.
Limitations and conditions. To apply this tax regime, a taxpayer cannot have been a tax resident of Spain for the last five years, and they must also have an employment contract with a Spanish company (or a remote work/services agreement with a foreign company).
Under this tax regime, you only pay income tax (impuesto de la renta de no residentes, IRNR) on income generated in Spain (for example, income from services is taxed in Spain if the freelancer was in Spain at the time of rendering such services).
IRNR is levied at a flat rate of 24% on income of up to €600,000 per year, or 47% on income exceeding that amount.
IMPORTANT! Foreigners who have received a digital nomad visa in Spain can use this tax regime only if they are employed.
Filing and paying tax. The tax return (modelo 210) must be submitted quarterly before the 20th day of the month following the end of the quarter (for the fourth quarter, the return is submitted between January 1 and January 31 of the following year). The declaration form and filling instructions are available here (registration required). The tax is payable within the same period.
Self-employed (autónomo)
In Spain, you can be one of the several types of a self-employed enabling you to receive income via Solar Staff (the exact kind is determined upon registration and does not affect either its process or the tax terms):
Autónomo empresarial: self-employed person whose activities are listed in the first section of Royal Legislative Decree 1175/1990 dated September 28.
Autónomo profesional: self-employed person whose activities are listed in the second section of Royal Legislative Decree 1175/1990 dated September 28.
Trabajadores autónomos económicamente dependientes (TRADE): self-employed person who has no employees and receives 75% of their income from a single client.
IMPORTANT! When getting paid for services via Solar Staff, autónomo profesional and TRADE workers need to withhold personal income tax upon issuing invoices. The PIT is normally withheld at a rate of 15%, but during the first three years of conducting activities, a reduced rate of 7% is applied. To learn more, see here.
Furthermore, if at least 70% of professional income is subject to withholding, the self-employed worker shall be exempt from filing a personal income tax return (modelo 130).
To register as a self-employed person in Spain, you must:
Submit an application using Form 036 or 037 (depending on the type of activity) to the tax service. For details and filling instructions, see here.
Within 30 days after applying, you must register with Spain's Ministry of Inclusion, Social Security and Migration (Ministerio de Inclusión, Seguridad Social y Migraciones) online and select the special regime for the self-employed (Régimen Especial de Trabajadores Autónomos, RETA). To register, use Form TA 0521 (see here).
During the same period, register for the tax on economic activities (impuesto sobre actividades económicas) at a tax office. The tax office will also issue an IRPF certificate for the payment of income tax.
The self-employed are liable to pay the following taxes and contributions:
Income tax (impuesto sobre la renta de personas físicas, IRPF), which is levied based on the chosen method of calculating the tax base.
In Spain, there are several such methods:
Direct assessment (normal mode)
This method for calculating the IRPF tax base can be applied by those whose turnover for the past year exceeds €600,000 and who has not used this method in the previous three years.
Self-employed persons can use this method to deduct expenses related to professional activity from income and apply deductions.
You must keep records when using the direct assessment method.
This method for calculating the IRPF tax base is for those whose turnover for the past year does not exceed €600,000.
The main difference from the direct assessment method has to do with amortization calculations and the fact that here you can apply a deduction in the amount of 7% of net income (but not more than €2,000) without having to provide documentary evidence.
Simplified direct assessment is applied by default for the first year of activities (regardless of the turnover for the year). This method is applied on a voluntary basis, meaning the self-employed person can cancel it by submitting an application during December of the given year. In this case, starting January 1 of the following year, the tax base will be calculated according to the direct assessment method for at least three years. This transition from normal to simplified mode will also occur automatically if the turnover amount exceeds €600,000. The new method will then go into effect from the start of the next calendar year. In other words, the simplified mode of direct assessment continues to be active during the year when the turnover threshold was exceeded, and from January 1 of the following year it switches to normal mode. To learn more, see here.
You must keep records, but the process is simplified compared to direct assessment.
Objective assessment sees percentages applied to certain modules (indicators) to determine the tax amount instead of keeping record of actual income and expenses associated with the activity.
IMPORTANT! Self-employed persons who receive income via Solar Staff cannot use the objective assessment method to calculate the tax base for such income, because the provision of services is not included in the list of permitted activities. The full list of the permitted activities can be found here.
After you calculate the IRPF tax base using one of the above methods, you pay the tax at the rates applicable to resident individuals. Unlike individuals, the self-employed must pay income tax in quarterly advances, which are calculated at a rate of 20% of taxable income for the quarter.
Filing and paying tax. Taxpayers are to submit quarterly declarations before the 20th day of the month following the end of the quarter. The declaration types are as follows:
Declaration on income tax withholdings applied for the rental of workspaces (modelo 115)
Declaration on advances (modelo 130, or modelo 131 for the self-employed using objective assessment)
Additionally, you need to annually submit the following documents:
Income tax declaration (same as resident individuals)
Declaration making a summary of all withholdings applied for the rental of workspaces (modelo 180), submitted between January 1 and January 30 of the year following the reporting year
VAT (impuesto sobre el valor añadido, IVA) is levied on income received via Solar Staff if the freelancer is registered as a self-employed person or an entrepreneur (Articles 4 and 5 of Spain's Law on VAT).
The basic VAT rate is 21%. The full list of VAT rates for 2023 can be found here.
Filing and paying tax. The tax return is submitted quarterly before the 20th day of the month following the end of the quarter. Filling and submitting the quarterly tax return (modelo 303) must be done online. Additionally, by January 30 of the year following the reporting year taxpayers must electronically fill and submit an annual summary return (modelo 390), which contains all the payments carried out throughout the year (it must be fully in line with all the quarterly returns). The self-employed also file an annual return listing all operations with customers and/or suppliers (modelo 347), provided that the total amount of the operations exceeds the annual threshold of €3,005.06 (including VAT). The return is submitted annually in February of the year following the reporting year (the submission deadline is the last day of February). To learn more, see here.
Useful links: virtual VAT assistant.
The self-employed pay contributions to social funds based on the amount of their estimated monthly income: the minimum amount of contributions for 2024 is €735.29, and the maximum is €4,139.4. For details on the base amount for calculating contributions and their exact amounts, see Royal Decree-Law 13/2022 dated July 26, 2022. The basis for calculating contributions is established when you register with Spain's Ministry of Inclusion, Social Security and Migration, and the self-employed can request to change this basis online. Even if you pay contributions under private medical and pension programs, you are still required to contribute to the RETA.
Contributions are paid automatically before the last business day of each month. To pay contributions, you need to open an account with a bank that is approved for working with the social security system (the full list of the approved banks is available here).
The economic activities tax (impuesto sobre actividades económicas, IAE) is a local tax, meaning it depends on the province where the self-employed person or entrepreneur is registered.
This tax is payable if net turnover for the year exceeds €1 million. Importantly, the self-employed and entrepreneurs are exempt from paying this tax in the first two years from the date of their registration.
To pay IAE, you must register using Form 840 (modelo 840). You must submit the form within one calendar month from the date you register as a taxpayer, reach the net turnover threshold, or terminate your activities.
The amount of tax depends on the type of activity and the province where the self-employed person is registered, but is generally calculated using the following formula:
Rate (based on the type of activity)
Area fee (depending on the size of your business premises)
Situational fee (determined by the city council)
Weighting coefficient (depending on net turnover)
A full list of activities and rates is available here.
Filing and paying tax. If net turnover for the year exceeds €1 million, you need to file a return (modelo 848) in the period from January 1 to February 14 of the year in which the turnover threshold was reached.
IMPORTANT! In addition to other reporting documents, the self-employed must also submit a declaration with information about all accounts payable and accounts receivable transactions with companies that are within the EU (modelo 349):
Monthly (between the 1st and the 20th day of the next month): When the total amount of transactions exceeds €50,000 per month.
Quarterly (between the 1st and 20th of April, July, and October, or until January 30): When the amount of transactions does not exceed €50,000 either in the current quarter or in any of the previous four quarters.
The self-employed do not need to prepare annual financial statements. However, it is advisable to keep accurate and systematic records.
There is also no need to open a bank account for business, although creating a separate account for business operations may be convenient (you will be able to receive remuneration to your personal account).
Limited liability entrepreneur (emprendedor de responsabilidad limitada, ERL)
The main difference between ERLs and the self-employed (autónomo) is that the place of residence of an entrepreneur cannot be seized to pay their debts.
You can register as an ERL one of the following ways:
Via a notary who will fill out the documents and send everything required to the Mercantile Register (Registro Mercantil).
Send in an online application for the ERL regime, signing it with an electronic digital signature (to learn more, see here).
Within seven months after the end of the financial year, you will need to submit accounting on your activities to the Mercantile Register (see the types of accounts here).
IMPORTANT! In all documents, entrepreneurs must indicate their status of a "limited liability entrepreneur" or the "ERL" abbreviation along with their first name, last name, and identification information.
ERLs pay taxes and social contributions the same way as the self-employed.
Additional information
Spanish Tax Agency (Agencia Estatal de Administración Tributaria, AEAT).
Ministry of Inclusion, Social Security and Migration (Ministerio de Inclusión, Seguridad Social y Migraciones).
Mercantile Register (Registro Mercantil).
FAQ for entrepreneurs.
Income received through Solar Staff is declared based on the Offer Agreement using data from certificates and invoices.
If you have any questions, get in touch via the chat in your Solar Staff account or email us at [email protected].