‘Autónomo’ fees in Spain are notoriously high but there are a number of expenses that self-employed workers can deduct in order to cut costs on their quarterly tax returns.
If you’re one of the 3.3 million autónomos (self-employed workers) in Spain, you’re probably more than aware that the country isn’t exactly a haven for self-starters.
Convoluted bureaucracy, the highest flat monthly fees in the EU and meagre benefits all contribute to the sense that being self-employed in Spain is a costly matter.
Faced with this uphill battle where minimum monthly social security costs range from €205.88 up to €1,606.88, depending on how much you earn, and gestor fees cost from €50 to €100 per month, self-employed people need to claim back wherever possible.
READ ALSO: What does a gestor do in Spain and why you’ll need one
Income tax (IRPF) for autónomos in Spain starts at 19 percent (increasing incrementally depending on income bracket) and has to be paid every three months.
The following is a list of tax deductions self-employed workers in Spain can claim in either their yearly or quarterly income tax returns.
Tax deduction on economic activity expenses
Spain’s Tax Agency allows the deduction of expenses associated with the economic activity carried out by any self-employed worker.
But for this to happen, it is essential that these expenses are accounted for and justified with invoices and receipts.
Deductible expenses for economic activities in Spain cover a huge range from office materials, software and website hosting to maintenance, energy bills, training, and rental costs of business premises (or if you work from home the amount of the property that serves as office space).
You can even claim restaurant, transport and hotel costs, if they directly relate to your work, you have paid for them by card and have proper invoices for them.
Talking to your gestor or fiscal adviser about all the potential deductible expenses in your part of Spain is a must if you want to save money.
Social security deductions
Social security fees are counted as business expenses for all autónomos in Spain. This means that when you submit your quarterly invoices and expenses to your gestor, you need to deduct these fees from the amount you earned that quarter to get your real earnings and see how much you’ll be taxed.
READ ALSO: What digital nomads need to know about Spain’s annual income tax declaration
Tax deductions on food
If you need to work away from home or go on a business trip, you are able to deduct up to €26.67 per day in Spain or €48.08 when you’re abroad for food expenses while you’re away. Remember that you need to pay by card and get a proper invoice or receipt, paying by cash will not be accepted.
Tax deduction on energy bills
If you work from home and have notified the tax office officially that you are doing so, you can also deduct 30 percent of your water, electricity and gas bills of the proportional part of your home you use for working in.
So for example, if you work in a nine square metre office in your home, you can deduct 30 percent of the energy you use in this one space, not for the whole apartment. In reality, it means that you are usually only deducting €3 or €4 per energy bill, but as they say, every little helps.
Tax deduction for independent professional services
If they relate to your job, you can also deduct fees from independent professionals such as economists, lawyers, auditors, notaries, as well as commissions from commercial agents or independent mediators. This is in addition to the fees you are charged monthly or quarterly by your gestor.
READ ALSO: Do Spain’s self-employed pay more tax than employees?
Tax deductions on private health insurance
As an autónomo, you’re already paying a huge amount every month in social security in order to be able to have public health care access, among other benefits, so you may not want to pay for private health insurance on top of this. If you do have a private policy which directly linked to the professional activity, however, then this is deductible up to a certain amount.
Tax deduction for owning or renting a home
If you have a home in Spain which you bought before 2013, you can apply for the 15 percent home investment deduction.
In addition, tenants who have a main residence rental contract dated prior to January 1st 2015 can also deduct 10.05 percent of the amounts paid as long as the tax base is less than €24,107 per year. Find out more here.
Regardless of when you bought or rented your home, you can also deduct the proportion of your rent or mortgage expenses, according to the amount of space you use to work in from home and for how many hours per day. Be aware, this is only if you work from home, if you rent a premises or a co-working space then you can deduct expenses for these.
Tax deduction for pension plans
If you have a private pension plan, you deduct up to €5,750 a year for it (€4,250 for being self-employed and €1,500 individually).
BBVA bank offers an English-language tax calculator for private pension plans in Spain and explains it in detail.
Transport and vehicle costs
While you can’t deduct expenses for commuting to work, you can deduct transport expenses if you have a business trip or you need a vehicle for work. As long as you use your car exclusively for work, you can deduct 100 percent of the costs involved such as petrol and maintenance fees. You cannot deduct fuel costs for your personal car.
Tax deduction for donations and affiliations to political parties and NGOs
Any membership fees and contributions self-employed workers pay to political parties in Spain – as well as federations, coalitions or voting groups- are eligible for a 20 percent tax deduction.
There’s a limit to this rebate of €600 per year.
For donations to non-profit organisations the tax deduction is 75 percent for an amount no higher than €150.
Tax deduction for kindergarten expenses
Since 2018, self-employed mothers in Spain can claim a tax deduction of €1,000 for day care expenses, aside from the €1,200 that working mothers already get.
Registration and tuition expenses as well as food costs can be claimed back, as long as your child is under the age of three.
READ ALSO: What you should know before becoming self-employed in Spain
Regional tax deductions
Spain’s regions have around 200 different deductions relating to personal income tax (IRPF), some of which apply to self-employed workers.
These are far too many to list in this article but Spain’s Agencia Tributaria has categorised them according to each region in the following page.
You can also read our articles on what residents of Andalusia, Catalonia, Valencia and Madrid can deduct from their yearly personal income tax returns.
Our reporters at The Local are not tax experts, so if you’re unsure about anything regarding filing your return or which deductions you may be able to apply, it’s important that you contact a gestor or accountant.
