Freelance. You too?
Every year we meet more and more people who want to work as a self-employed or freelance in Madrid. Some come with this idea and others develop it once they have been living here for some time.
—The truth is that it’s an easy procedure —says Paloma, as always, seeing the positive side of life.
—But you have to know how to do it —Almudena affirms convincingly and putting his feet on the ground.
—Of course! As with everything, really —accepts Palo.
—Correct, the more information you have, the better —insists Almu.
The first thing to bear in mind is that there can be hundreds of cases, almost as many as professionals willing to work as freelancers in Madrid.
—Here we’re going to pick up the most common situation we’ve encountered —explains Palo cheerful.
—To clarify ideas.
—And to be used as a starting point.
—For the majority, at least.
The most convenient (especially if you don’t speak Spanish) would be to hire a professional (“gestor” or “asesor”) for the procedures to be carried out in Spain. This professional will inform you about the specifities of your particular case and may advise either how to do it by yourself or handle the fiscal and accounting management for some time (the first year, if possible). Later on, being aware of the obligations, you’ll be in a better position to decide.
Future freelance, non-EU citizens outside Spain
Non-EU foreign workers who are outside Spain must apply for the authorization for temporary residence and self-employed work that must be presented to the Spanish Consular Office corresponding to their place of residence, personally and in the official form.
Once this authorization has been granted, the applicant must collect the visa personally within one month and must enter Spanish territory during its period of validity, which in no case shall exceed three months.
As soon as you enter Spain legally, you can start the same procedure that Spanish citizens must follow: registration with the “AEAT” (Treasury) and Social Security.
The initial authorisation for residence and self-employment will last for one year.
Of course, you must meet certain requirements and present certain documentation.
You may find this info in your own language. Check the web of Spanish Consulate closest to your location.
Future freelance, non-EU citizens in Spain
Non-EU citizens who have been in Spain for at least one year in a situation of legal residence may access the situation of residence and self-employment following the same requirements and providing the same documents except for that related to the entry visa.
The work authorization granted is conditioned to the subsequent affiliation and/or registration of the worker in the Social Security within one month since notification.
It’s submitted in any public register and addressed to the “Oficina de Extranjería” corresponding to the province in which the worker resides. Information on the address, telephone numbers and opening hours can be consulted at
Future freelance, EU, EEA and Switzerland citizens
Citizens of these States and their family members have the right to access any activity, whether employed or self-employed under the same conditions as Spaniards.
If they are going to reside in Spain for more than three months, they are obliged to apply for registration in the Central Register of Foreigners (“Registro Central de Extranjeros”) and will be issued with a registration certificate.
To apply for registration in the Central Register of Foreigners of EU citizens or the family card:
The citizen or family member must submit their application at the “Oficina de Extranjería”) of the province where they are going to reside or at the Police Station.
The deadline for submitting the application is 3 months from the date of entry into Spain.
The registration certificate will be issued immediately. The family member card within three months of your application.
Future freelance, necessary formalities
These formalities are the same as those that must be carried out by Spaniards who want to work on their own account. Before starting any activity, you must register with the Treasury (“AEAT or Hacienda”) and with the Social Security.
The first step is register with the tax authorities:
1.- Registration in the Economic Activities Tax (“Impuesto de actividades económicas – IAE”): form 840.
You’re required to choose an “IAE epigraph” from a listing published with all the professional activities subject to be developed. This listing is a little out of date. There are many common professional profiles without denomination, especially those regarding digital job profiles.
2.- Census declaration, model 036 and model 037
With this declaration we indicate the Treasury the matter of our business and depending on it, the taxes we must declare.
Model 037 is a simplified version of model 036 that can be used by almost all freelancers.
The most complicated thing is the selection of some of the epigraphs of the Tax on Economic Activities (IAE) that we have already seen in the previous point. The majority will be exempt from the payment of the IAE.
In addition, each activity is assigned a code (CNAE: National Classification of Economic Activities) that you should know.
It can be submitted at any AEAT office (by appointment) and can also be processed online upon registration (with electronic certificate or similar).
The second step is the Social Security registration:
To do so, you will have to submit form TA0521 at one of the administrations of the General Social Security Treasury (TGSS) together with a photocopy of your National Identity Card or equivalent and a photocopy of your tax registration.
This is a Manual (in Spanish) explaining all about registration as a freelance published by Social Security.
Obligations of the freelance
Pay monthly freelance fee (“cuota de autónomos”) + flat rate
It is a mandatory monthly payment to the Social Security approved by the Government and may vary from year to year.
In 2022 the minimum contribution for the freelance is set at €294€
There is also a “Flat Rate”: freelance workers who are registered for the first time or who have not been registered in the two previous years (three if they have already been a beneficiary) may enjoy a bonus on their Social Security contribution which will be extended over time, up to 24 months.
In general, this means that during the first year the minimum contribution is 60€ per month and during the 2nd and 3rd years the contribution increases progressively. There are several particularities with higher bonuses.
The payment can be debited directly in one’s bank account. There will be changes in 2023.
Quarterly VAT (“Declaración trimestral de IVA”)
The quarterly VAT declaration is made by submitting form 303 every quarter until the 20th of April, July and October and until the 30th of January when you must add the Annual Summary by submitting form 390.
If you carry out intra-community transactions, you must also submit form 349.
This is an indirect tax on consumption and therefore falls on the final consumer. The freelance acts as an intermediary between the tax authorities and the final consumer, since they must pay to the tax authorities the difference between the VAT that has been passed on and charged to their clients and that which they have borne for their purchases from suppliers.
It can be processed online with an electronic certificate.
Quarterly Income Tax (“Declaración trimestral de IRPF)
It’s “Impuesto sobre la renta de las personas físicas”, Income tax for individuals. It’s the obligation to submit model 130 or 131 every quarter, until the 20th in the months of April, July and October and until the 30th of January when you must add the Annual Summary by submitting forms 180 or 190.
It taxes the business income obtained by the freelance, being able to choose between the Simplified Direct Estimation Regime, the Normal Direct Estimation Regime and the Objective Estimation Regime (Modules). Quarterly, an amount is paid and then, annually, the income tax return (model 100) is filed, which may be paid or returned.
Please, be aware that if you have employees, have a lease, etc. there are other obligations.
Besides, there is the annual personal income tax return, to be submitted using form D-100 from 2 May to 30 June.
If you are planning to move to Madrid soon, you’ll find all the relevant information in The secret of relocating to Madrid. If, in addition, you need help with the organization or even if you prefer that we accompany you, check out our services.
In the meantime, you can receive regular information by filling out this questionnaire. And if you find it useful, we thank you for sharing it.
