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Tax in Spain - better for freelancers than France?
Thread poster: Brian KEEGAN
Brian KEEGAN
Local time: 19:12
French to English
+ ...
Dec 17, 2002

Hi! I have a question about the level of taxation on freelancers in Spain.

At the moment I live and work in France, and my URSSAF (social security), compulsory pension contributions and taxes (not including VAT) come to around 50% of my total revenue. As I am not very happy about this, I\'ve been thinking about moving to Spain (Barcelona), where I believe the taxes are lower.

Can anybody give me a rough idea of what kind of tax rates I can expect to be paying in Spain?

Thanks a lot.

Brian


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Elena Miguel  Identity Verified
Spain
Local time: 19:12
English to Spanish
+ ...
Taxes in Spain Dec 17, 2002

In Spain, your clients have to withhold % of each bill and credit it for you before the tax authorities and then you have to pay your income tax in June depending on your total annual income.

That\'s all


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Patricia Posadas  Identity Verified
Spain
Local time: 18:12
Member (2002)
English to Spanish
+ ...
Professional taxes Dec 18, 2002

We contribute to Social Security depending on the income range chosen. This needn\'t correspond to your real income, and health services and conditions will be the same whatever range you choose. Health services included in Social Security are 100% free (unlike in France).



However your retirement pension will be based on this income range you choose, they calculate it using the last 15 years you paid, I think. So if you are young you can choose the lowest income range and lose nothing. Then as you get older you can change this or you will get retirement pension for the \'salary\' declared, which is very low, something around 600 EUR per month.

For this lowest income range you pay a bit over 200 EUR per month (Social Security).



Then you have to pay income tax. As Dyran explained, if you have customers in Spain they will make you pre-pay this deducing 18% from each invoice you send them. This amount prepaid will be deduced from what you have to pay after your annual income tax declaration, in May-June (for the previous year).



VAT is 16% .



If your customers are not in Spain, no VAT or tax prepayment is applied. So you would just have to pay for Social Security (starting approx. 215 EUR)and then your income tax, 18-22% of your income if you don\'t have a big salary, but it can go up to 40% I think.Then it depends on whether you have the right to deduce something, whether you have children etc. If you have 2 or more children stay in France!



There is an annual tax (IAE) of under 200 EUR but as far as I know we have paid it for the last time, next year it won\'t exist any longer.



If you wish to stay in France, I know creating a microenterprise is much cheaper than being a freelance professional. You can ask this in the French forum, or get info searching through this site:

www.motamot.com



HTH



Patricia.


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xxxampuria
English to Spanish
+ ...
En Epagne Dec 18, 2002

Quote:


On 2002-12-18 05:25, Patricia P wrote:

We contribute to Social Security depending on the income range chosen. This needn\'t correspond to your real income, and health services and conditions will be the same whatever range you choose. Health services included in Social Security are 100% free (unlike in France).



However your retirement pension will be based on this income range you choose, they calculate it using the last 15 years you paid, I think. So if you are young you can choose the lowest income range and lose nothing. Then as you get older you can change this or you will get retirement pension for the \'salary\' declared, which is very low, something around 600 EUR per month.

For this lowest income range you pay a bit over 200 EUR per month (Social Security).



Then you have to pay income tax. As Dyran explained, if you have customers in Spain they will make you pre-pay this deducing 18% from each invoice you send them. This amount prepaid will be deduced from what you have to pay after your annual income tax declaration, in May-June (for the previous year).



VAT is 16% .



If your customers are not in Spain, no VAT or tax prepayment is applied. So you would just have to pay for Social Security (starting approx. 215 EUR)and then your income tax, 18-22% of your income if you don\'t have a big salary, but it can go up to 40% I think.Then it depends on whether you have the right to deduce something, whether you have children etc. If you have 2 or more children stay in France!



There is an annual tax (IAE) of under 200 EUR but as far as I know we have paid it for the last time, next year it won\'t exist any longer.



If you wish to stay in France, I know creating a microenterprise is much cheaper than being a freelance professional. You can ask this in the French forum, or get info searching through this site:

www.motamot.com



HTH



Patricia.

mais si vous gagnez moins de 19000 euros par moi vous n´etes`pas obliger de faire votre declaration d´impots à moins vous ayez par ex.une hyphoteque bancaire pour vous faire rembourser une partie de ces 18$ irpf(impot) de chaque travail decleré en Espagne.



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Patricia Posadas  Identity Verified
Spain
Local time: 18:12
Member (2002)
English to Spanish
+ ...
????? Dec 19, 2002

Quote:


On , Ampuria wroteatricia.

mais si vous gagnez moins de 19000 euros par moi vous n´etes`pas obliger de faire votre declaration d´impots à moins vous ayez par ex.une hyphoteque bancaire pour vous faire rembourser une partie de ces 18$ irpf(impot) de chaque travail decleré en Espagne.





Where does this happen? In Spain a freelancer has to make an income tax declaration from the first Euro (s)he earns! If (s)he doesn\'t earn much, and 18% has been prepaid through his/her Spanish customers (s)he may get a return. If his/her customers are abroad, no IRPF retention is applied and then (s)he just pays. With Hacienda you pay first and perhaps you will get part of your money back then!

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xxxampuria
English to Spanish
+ ...
pour paticia Dec 19, 2002

Quote:


On 2002-12-19 07:25, Patricia P wrote:

Quote:


On , Ampuria wroteatricia.

mais si vous gagnez moins de 19000 euros par moi vous n´etes`pas obliger de faire votre declaration d´impots à moins vous ayez par ex.une hyphoteque bancaire pour vous faire rembourser une partie de ces 18$ irpf(impot) de chaque travail decleré en Espagne.









Where does this happen? In Spain a freelancer has to make an income tax declaration from the first Euro (s)he earns! If (s)he doesn\'t earn much, and 18% has been prepaid through his/her Spanish customers (s)he may get a return. If his/her customers are abroad, no IRPF retention is applied and then (s)he just pays. With Hacienda you pay first and perhaps you will get part of your money back then!



No he dicho que no tengas que pagar el 18 % lee bien, he dicho que no estas obligado a hacer tu declaracion en mayo, pero ese 18 por ciento no te lo quita nadie pero puede pasar que en mayo hagas tu declaracion y tengas que pagar mas o quizas te devuelvan si tienes hipotecas,solo eso,me gustaria se leyeran las cosas antes de ser tan agresiva porque das la sensacion de llamarme mentirosa y mira soy de caracter tranquilo pero hasta cierto punto.

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Brian KEEGAN
Local time: 19:12
French to English
+ ...
TOPIC STARTER
Thanks Dec 20, 2002

Thanks everyone for your help! If I understand correctly, taxes in Spain for freelancers are definitely lower than the 50% charged in France: in Spain, VAT is collected at 16%, you pay 200 euro social security per month, which you deduct from your revenue, and then you pay anywhere between 18% and 40% personal income tax on the rest, depending on how much it is. Is this correct, or have I got it all wrong?



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