Since 2013, individuals starting a self-employed activity in Spain have been able to benefit from both tax relief and reduced Social Security contributions. The €80 monthly Social Security contribution and the 20% reduction in taxable net income during the first two years can make self-employment a genuinely attractive alternative.

Pensions from Germany and Spain:

Flat-Rate Contribution (Tarifa Plana):

Another measure designed to promote self-employment in Spain is the reduced fixed contribution applicable during the first year of self-employment, commonly known as the Tarifa Plana.

Since 2023, individuals registering under the Spanish self-employed Social Security scheme for the first time may apply for a reduced contribution – the so-called Tarifa Plana – of €80 per month during the first 12 months of their activity. The reduced contribution must be requested at the time of registration.

If you opt for this scheme, instead of paying the standard contribution of approximately €205.00 to €608.00, you pay only €80 per month during this period. After the first 12 months, contributions are calculated according to your income.

The reduced contribution of €80 may be requested for a further 12 months if the expected net income is below the applicable statutory minimum wage (Salario Mínimo Interprofesional – SMI). In 2025, the SMI amounted to €16,576 gross per year.

B) Personal Income Tax

Tax reduction for economically dependent self-employed persons.

If the requirements established in Article 32.2 of the Spanish Personal Income Tax Act (LIRPF) are met (direct assessment method, a single client, no other income, etc.), taxable net income may be reduced by a fixed amount of €2,000.

Where net income is low, an additional tax reduction of up to €6,498 may be available. The full reduction applies where net income amounts to €14,047.50 or less. For net income between €14,047.50 and €19,747.50, the additional reduction is progressively reduced in accordance with the statutory calculation formula.

For taxpayers with low income, this reduction, which is applied after deducting allowable expenses and depreciation, may in certain cases reduce taxable net income to €0, meaning that no personal income tax is payable on this income.

As the present example assumes gross income of €70,000, the reduction is limited to €2,000.

Tax reduction for starting a self-employed activity.

In addition to the tax reduction referred to in the previous section, a further reduction may apply where the activity has recently commenced. This reduction can generally be applied in the first tax period in which positive net income is obtained and in the following tax period.

If the requirements set out in Article 32.3 of the Spanish Personal Income Tax Act (LIRPF) are met, positive taxable net income may be reduced by 20%. The net income to which this reduction may be applied is limited to €100,000 per year, resulting in a maximum reduction of €20,000. Exception: this tax benefit cannot be applied where more than 50% of the income earned during the relevant period is obtained from a person or entity from which the taxpayer received employment income in the year preceding the commencement of the activity.

C) Deductible Expenses:

As in Germany, various expenses and costs related to a self-employed activity may be deducted from gross income in Spain. These deductions are made before applying the tax reductions referred to in the previous section, as those reductions are subsequently applied to the taxable net income. Deductible expenses may include, among others:

- Advertising and promotional expenses, such as flights to Germany for the purpose of visiting clients.

- A proportion of rental expenses where the taxpayer's home is also used for business purposes and the applicable requirements are met.

- Depreciation of capital assets required for the self-employed activity.

- Fees for tax advisors, lawyers and other professional services.

- Social Security contributions.

- Where the activity is carried out from home, a proportion of certain household expenses, such as electricity, water, internet and telephone costs, may be deductible. For example, if 50% of the home is used as office space, applying the statutory 30% percentage to that proportion would result in a deduction of 15% of the relevant expenses. Where it can be demonstrated that an expense arises exclusively from the business activity, it may in certain cases be fully deductible.

- Business-related meal expenses incurred locally or while travelling: up to €29.34 per working day, subject to the applicable statutory requirements.

D) Invoicing German Clients without Spanish VAT:

Under Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, businesses and professionals registered for intra-Community VAT purposes may, under certain conditions, issue invoices without Spanish VAT where the recipient of the services is established in another EU Member State, is acting as a business or professional rather than as a consumer, and also holds a valid EU VAT identification number.

If a service provider resident in Spain has the corresponding intra-Community VAT identification number, an invoice issued to a German company may, provided that the applicable requirements are met, be issued without Spanish VAT. Registration in the Spanish Register of Intra-Community Operators (Registro de Operadores Intracomunitarios – ROI) and the corresponding VAT identification number may be requested when registering the business activity. Even if Spanish VAT does not have to be charged, these transactions must subsequently be reported in the relevant tax returns, in particular Forms 303 and 349 where applicable.

Your PAE: Recht - Spanien
As a PAE (Punto de Atención al Emprendedor – Entrepreneur Service Point) authorised by the competent Spanish Ministry, our firm has direct access to the relevant public authorities, the Spanish Tax Agency and the Social Security authorities. This enables us to carry out the most important administrative procedures electronically, thereby accelerating the registration process and avoiding unnecessary visits to public authorities.

Registration as self-employed within 3 working days and without the need to visit public authorities. Further information.

As lawyers, tax advisors and a registered PAE, our firm will be pleased to analyse your specific situation, carry out the necessary administrative procedures on your behalf and prepare and file the required tax returns. Further information about our services for self-employed persons and professionals can be found in the section Self-Employment.

If you are interested in our services or have specific questions regarding this topic, please do not hesitate to contact us by email or telephone.

Author:

Christoph Sander
Lawyer and Tax Advisor
CEO, Partner, Director
info@sspartners.es
Tel: (+34) 951 12 13 06
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