SPAIN: Experiences with Freelance SCM?
Thread poster: Johan Jongman

Johan Jongman  Identity Verified
Ireland
Local time: 12:58
English to Dutch
+ ...
Nov 5, 2008

Hello all

I was wondering if anyone has ever used companies like Freelance SCM (www.freelance.es) to take care of taxes, paperwork, etc. in Spain?

Apparently, the idea is to technically become a member of a society. You tell them how much you work and they will invoice your clients and then pay you accordingly after deducting taxes and social security contributions.

The advantage is that it saves you a lot of paperwork headache and also money (less tax, and you only pay social security contributions for the days you actually work). What are the downsides?

Would anyone recommend this? Any alternatives?

Many thanks for any information.

Johan Jongman


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tom_michell  Identity Verified
United Kingdom
Local time: 11:58
Spanish to English
+ ...
Do your sums carefully Nov 5, 2008

I'd not heard of such an organisation until reading your post but it caught my eye because when I was working in Spain part-time for a company and also freelancing, I was paying social security two times over, which was quite hard to take.

I just had a quick look at their site and they take a 6% commission on what you invoice but if you only pay SS on the days you work (does that equate to the number of days on which you produce invoices?) then I guess this could produce a saving, provided that you don't invoice large amounts each month. As freelance SS is a flat rate, you need to do your sums to work out whether you would gain or lose; and given the complexity of the freelance system in Spain as a whole, if you're able to work that out by yourself, I'd think you don't need the services they offer.


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Tomás Cano Binder, BA, CT  Identity Verified
Spain
Local time: 12:58
Member (2005)
English to Spanish
+ ...
Barely legal? Nov 5, 2008

I wonder whether this company is really legal or whether they will have problems with the tax authorities and Social Security at some stage. How can you be partner of a cooperative without paying social security all the time? I don't get it.

To be honest, I would recommend you do call the Agencia Tributaria (they don't ask you for any details, not even your name) and the Social Security (I never called, so I don't know whether they inform with sufficient quality and anonimity over the phone) and ask whether this system is legal.


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xxxLia Fail  Identity Verified
Spain
Local time: 12:58
Spanish to English
+ ...
agree Nov 5, 2008

Tomás Cano Binder wrote:

I wonder whether this company is really legal or whether they will have problems with the tax authorities and Social Security at some stage. How can you be partner of a cooperative without paying social security all the time? I don't get it.

To be honest, I would recommend you do call the Agencia Tributaria (they don't ask you for any details, not even your name) and the Social Security (I never called, so I don't know whether they inform with sufficient quality and anonimity over the phone) and ask whether this system is legal.


As far as I know, one can only sign on and off paying SS by the month. I smell a very smelly rat here, though, and would be very, very wary. I would do as Tomás suggests, contact Hacienda (and I don't see why one has to be anonymous, what's there to hide on your side?).

However, given how thick Hacienda can be - with all due respect - I would go in person, with a printout of the relevant pages, in other words with the hard-copy evidence.

Then, on the basis of what Hacienda says, I would contact the people offering this service and ask some for some hard facts, to contrast with what Hacienda says. As Hacienda employees are not always reliable with their info.

My very simple understanding of SS is that there are two situations: someone pays it for you (an employer) or you pay it and that you can be be "de alta" or "de baja", but not from one day to another, although you can change your status from one month to another. The only way I see that this company/site may function is that they factor your monthly payments of around 250 EUR into their costs, and go to the trouble of putting you "de alta" and "de baja" from one month to the next, depending on your invoicing frequency.

PS: I'm not especially impressed by the website (poor quality). Plus, I'd like to see a few more links to legislation, etc, and there aren't any. All in all, it simply doesn't look very pro to me.

So, following a very quick review, here are some Qs:

What exactly is a "permiso de trabajo"? I've never had one; I've always had a "permiso de residencia". As far as I'm aware, in Spain, one has to have the latter, and on that basis, one can work. So ... doubtful terminology to start with.

The charge system is, at best, obfuscating. What's one letting oneself in for here (just to figure out the calculations is going to take up hours of your time!)

They charge 6 EUR a month plus "Participación en la cooperativa: 80 €" (a flat charge or each time you sign on/off?) and "Gastos de Inscripción: 20 €" (ditto). Then they refer to deductions: SS (is that by day, weird!!! But if so, for a single billing day in the month, around 8 EURs), tax (that has to be done anyway, "10% a cuenta del impuesto sobre Sociedades de la cooperativa" (what's that? More to the point, what is is going to be in EURs? Is it charged on each bill?) and, finally, the 6% commission for them.

So, just imagine you had a single bill of 2000 EURS in a single tax year (and exc. the tax you have to deduct anyway): 80 + 20 + 8 + 200 + 120 = 428 EURS.

As it is, just to "have them available" you pay 100 EUR, plus 72 for a year's sub = 172 EURs (assuming that you can't go "de alta" and "de baja" at will).

For the same single bill of 2000 EuRs, I'd (optionally) pay a gestor about 70 EUR a month, plus my SS of around 250 EUR, total 320 EUR. And I know where I stand, no intermediaries with obfuscating billing systems. What's more, I can always go "de alta" and "de baja" with both a gestor and Hacienda, anyway, from one month to another ( I don't even need a gestor, if I have the time and not the work, makes sense to do one's own paperwork).

There are a few other issues I could raise here, but can't/won't, at the risk of being accused of slander etc:-)



[Edited at 2008-11-05 23:58]

[Edited at 2008-11-06 00:00]


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Grace Horsley  Identity Verified
Spain
Local time: 12:58
Member (2008)
Spanish to English
My experience Nov 6, 2008

This sounds very similar, if not identical, to the cooperative that I used to invoice through (SAPIC, SCCL in Valencia), which has legal status and has been running for several years. At the time I was working part-time as a freelance translator and part-time as an in-house translator at an agency, so it was ideal for me. I was already paying social security contributions as a result of my contract with the agency, so I obviously didn't want to register as 'autónomo' as well. I just calculated how much social security I should pay according to the amount of work I had.

Of course, I had to notify all my clients that I would be invoicing through the cooperative, but none of them had a problem with that. I never had to worry about putting money aside to pay the VAT at the end of the quarter because they deducted it before paying me. Another advantage was that, as the other members of the cooperative were from such a wide range of professions, not just translators, you could declare almost anything as work-related expenses. As far as their commission is concerned, I don't begrudge them that too much, as I'm now paying a 'gestoría' quite a considerable amount to do all my paperwork for me.

As I'm now working full-time as a freelance translator, I decided that it worked out better to register as 'autónomo', but I would recommend this to anyone who's working part-time and can't justify paying a full month's SS, or anyone who's already working part-time with a contract.


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Miguel Garcia Lopez  Identity Verified
Spain
Local time: 12:58
Member (2008)
English to French
+ ...
Not my direct experience... Nov 6, 2008

A colleague is working with Freelance SCM, and she is happy with the results.
Her comments are similar to those of Grace.
If you would like to have her e-mail address, I would be very pleased to share it with you in private.


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Feigola  Identity Verified
Spain
Local time: 12:58
Member (2007)
Spanish to Russian
+ ...
A small comment Nov 6, 2008

Lia Fail wrote:

What exactly is a "permiso de trabajo"? I've never had one; I've always had a "permiso de residencia". As far as I'm aware, in Spain, one has to have the latter, and on that basis, one can work. So ... doubtful terminology to start with.



I agree with Lia Fail, but I´d just like to clarify this point: a "permiso de trabajo" is actually different from "permiso de residencia". Depending on the country you come from, a residence permit alone may not give you the legal right to work in Spain. Having a work permit authomatically allows you to live in Spain, but not the other way round (especially for non-EU citizens). That´s why they are speaking about these two types of "permiso"...


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Johan Jongman  Identity Verified
Ireland
Local time: 12:58
English to Dutch
+ ...
TOPIC STARTER
Freelance SCM Nov 6, 2008

Thanks to all for your input. I'll do some research into the legality of this system and will let you know what I find out

Thanks again
Johan


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Lawyer-Linguist  Identity Verified
Portugal
Local time: 11:58
Dutch to English
+ ...
One thing I'd definitely want to know ... Nov 6, 2008

... apart from what's already been mentioned, is the type of banking account the proceeds of my work are going to be received into - if it's a general business account - i.e. shared with the company itself - where your proceeds are mixed up with everyone else's - beware!



[Edited at 2008-11-06 12:15]


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