So how exactly do we go about this, and what benefits can we now obtain from the government when setting up as self employed.
If you have no debts with the Social Security or the Tax Office in Spain and have not been self employed in the last 5 years, there is a government scheme that may interest you.
Subject to your age:
For the first 6 months there is an 80% reduction in the self employment payment (so you would pay approximately 52,00€ per month).
For the following 6 months there is a 50% reduction (so that you would pay approximately 129,00€ per month).
And for the last 18 months there is a 30% reduction (so you would pay approximately 179,00€).
After this, you would pay the standard basic self employment quota of approximately 250,00€ to 270,00€, depending on your age, and the work you carry out.
This unfortunately does not apply to the self employed with workers. If you wish to employ someone else you will find that you have to pay the full rate right from the beginning. The government is however bringing out new schemes for employers giving healthy discounts on social security payments for their workers, making it more cost effective to employ someone.
The quickest and simplest way to set up is to do it through a “Gestoria” (pronounced hess-tor-ria). Your “Gestor” can take care of registering you with the tax office and the social security office. A quick trip to your local Tax Office with your Gestor will suffice, in order to apply for an online certificate for him to be able to apply and present all the paperwork, in your representation.
Once you have set up and are up and running you will have to submit your taxes every quarter. You will need to take all your invoices (incoming and outgoing) to your Gestoria and they will present your IVA returns, your income tax returns, and your retentions (if you have an establishment on which you pay rent).
The first step prior to setting up your business is to make an appointment with your Gestor and talk over the project with him. He will also be able to advise you as to what expenses are deductable, and the best scheme for your type of business.