Working in August
There are many reasons for going freelance in Barcelona. In a city where the ideal job can be hard to find, freelancing may be the only way to follow your passion and make some money at the same time. For some people, going solo is simply preferable to working for others. And sometimes it is born of necessity; a company may offer regular work but require that you are a registered freelancer (autónomo).
However, if you are considering going freelance you’ll need to first understand the costs and legal requirements involved and weigh up if it really makes sense for you. The autónomo system in Spain is often criticised for being costly and complicated.
REGISTERING AS AUTÓNOMO: REQUIRED DOCUMENTATION
- Current passport (valid for at least six months from the date of your application).
- Spanish ID (DNI or NIE).
- Recent proof of being ‘empadronado’ in Barcelona (Volante de Empadronamiento), not more than three months old.
- A detailed description of your proposed activity.
- Proof of sufficient economic resources to carry out and invest in your proposed activity.
- Any necessary academic titles or accreditation, authorisations, licences, or proof of ownership or rental of property (when necessary to carry out your proposed activity). For example, if your activity involves driving a car or vehicle, a Spanish or EU driver’s licence might be necessary.
- Proof of ownership or access to material necessary to carry out your proposed activity. For example, if you are planning to be a freelance graphic designer you may need to show proof of ownership or access to a computer and the necessary computer programmes.
- Accreditation or proof of any extenuating circumstances that require that your case be considered urgent.
IMPORTANT: All non-Spanish documents must be translated into Spanish by an official translator. All documents originating outside of Spain must be officially stamped and legalised by the Consulate or Embassy in Spain of the country of origin, unless the document has already been apostilled by the competent Authority of the Convention of the Hague in the originating country.
*As laws and regulations change frequently, we recommend that you conduct further research and confirm the information with an independent advisor to be certain that it is current.
STEPS TO BECOMING AN AUTÓNOMO
1. Registration for the Impuesto de Actividades Economicas (IAE)
The first step is to sign up for the Impuesto de Actividades Economicas. You are required to register under a specific category (epígrafe) when registering your professional activity. The category you choose determines whether or not you pay IVA (VAT). For example, educational, non-profit, and certain other categories are exempt from this tax. The form to present is the Modelo 037.
2. Registration with social security Social Security
The second step is to register in the RETA (Régimen Especial de Trabajadores Autónomos) at the Seguridad Social. The form to present is the TA.0521/1.
Minimum documentation requirements for the process are a Spanish NIE, social security number and a bank account.
The basic expense that a freelancer has to pay every month is their social security contribution. Most people opt to pay the minimum base contribution, which is currently €264 euros per month (a higher base contribution gives improved pension rights). This is considerably higher than in other European countries. And, if you were planning on doing a little freelance work on the side to the tune of a few hundred euros, you could well find yourself with little change once you’ve covered your monthly fee.
The government has recently started offering economic incentives to new and younger freelances: First-time autónomos under 30 pay €50 euro per month for 30 months. First-timers over 30 pay €50 euro per month for 18 months.
TAXES AND PAPERWORK
Most self-employed people (depending on their activities) are required to file quarterly returns for IVA (Impuesto sobre el Valor Añadido), meaning Value Added Tax (VAT), and IRPF (Impuesto sobre la Renta de las Personas Físicas), which refers to personal income tax. There may be other specific requirements depending on the nature of the activity. In addition, all autónomos are required to present an annual income tax return (Declaración de la renta) by June 30th each year with details of the previous year’s activities.
One of the benefits of being self-employed is that you can compensate expenses against your annual tax bill. Tax-deductible items can include social security contributions, accounting services, professional association fees, and the cost of raw goods and materials necessary for doing business. If you rent an office, shop or other premises, then certain additional tax deductions related to this space may be applicable, such as rent, utilities, office supplies, software and insurance.
One problem for newcomers is that you can’t register as an autónomo unless you’ve been a legal Spanish resident for at least one year, or if you can prove extenuating circumstances.
There are co-operatives that provide alternatives for freelancers who aren’t able or prefer not to be registered as autónomo. This is often a great option for people who do occasional freelance work or who work in creative fields, such as musicians, photographers, journalists and designers. Most co-ops require payment of an initial membership fee and some also charge a percentage of each invoice that they process on your behalf. The benefit of joining one of these organisations is that you are able to legalise your professional activities without having to start your own business or register as a freelancer.
One such co-op, here in Barcelona, is SMartIb, which originated in Belgium in 2011 (SMartBe), and has divisions in various countries in Europe. Pia Mazuela has been the administrative head of SmartIb in Spain since 2013. “We’re extremely proud to say that we have more than 65,000 members internationally and 1,500 in Spain,” said Mazuela. “We represent a large community of people who work in the cultural sector who want or need an alternative to being self-employed.” Organisations like this are the perfect solution for someone whose freelance work isn’t their main source, or only source, of income. “In today’s market, we are an extremely practical option for a number of people whose work may be intermittent. Freelancers are becoming more and more aware that there are different options and business models out there in order to legally make a living in a creative or freelance-based career.”
The most important services that SMartIb and similar organisations provide include educating their clients on the professional possibilities available to them and how to protect their rights as legal freelance workers, and providing a legal solution to working in Spain without having to pay autónomo fees.
IT freelancer Kathy de la Cruz is originally from the US and works for an American-based cruise line company. Although the company isn’t based in Barcelona, she lives here and works from home. She said, “I happen to only have this one client, but the system works the same if you have one client or a thousand. The amount you pay every month doesn’t change based on the amount of clients you have or the work you pull in.”
Kathy found online resources very helpful. “It’s amazing the amount of stuff you can do online, but it’s worth researching it ahead of time to make sure you do everything properly, especially the first time. I started out doing it all myself when I first moved here—I have never had a contract with a Spanish-based company, I have always worked in this same position, so I have always worked as an autónomo—but it was a lot of work, so I ended up hiring a bilingual accountant to make sure I did everything correctly. It’s not that it’s not doable yourself, but I travel a lot for work, and it just made life easier.”
For creative people, there are a few organisations in Spain that exist specifically to protect the rights of artists and musicians, such as AIE (Artistas, Interpretantes y Ejecutantes). AIE works alongside co-operatives, such as SMartIb, to educate freelance workers in creative fields about their rights and legal options, and to lobby the government regarding freelancing laws. Javier Cubedo has been the Vice President of the Barcelona branch of the organisation since 1989. “AIE partners and most musicians choose to become part of a co-operative in order to legalise their activities,” said Cubedo. “Only a minority choose to register as autónomos because the monthly costs are so high.”
If you aren’t sure which route to take, always seek advice from an independent adviser or accountant. A small investment early on can save a lot of headaches and paperwork later.
Website in various languages.
Website in Various Languages.
Resources and Courses for Autonomos. Website in Spanish.
Spanish Tax and Accounting Firm in English. Includes many articles and links. Website in English.
International Co-op for Freelancers in Creative Fields (EU). Website in English.
Co-op for Freelancers in Creative Fields (Spanish Division). Website in Spanish.