Great, so you’ve decided that you want to register as self-employed in Madrid.
Having self-employed tax status is known as being autónomo in Spain. I recently registered as a self-employed teacher in Madrid so I know how daunting the process can seem. Arriving straight from the UK, having never lived/worked in Spain before, it’s taken me over 2 months to register.
Don’t be discouraged by this: I’ve made the mistakes so that you don’t have to. Keep reading to find out exactly what you need to do, to become autónomo in Madrid.
If you’re from the EU/EEA or Switzerland, you can set up as a freelancer or self-employed worker in Spain without restriction. Therefore, this blog is for you.
However, you need to already possess your NIE (Numero de Indentidad de Extranjero) to begin the process of becoming autónomo. Don’t worry if you don’t know what this is, I’ve written a step-by step guide for getting your NIE number in Madrid.
Hacienda or Agencia Tributaria
The Spanish tax agency. It collects taxes and fights against tax fraud. As a freelancer (autónomo), you’ll use its website to pay taxes: IVA (Sales Tax) and IRPF (Income Tax).
IVA (Impuesto del Valor Añadido)
Taxes the goods & services that you consume/offer in Spain. It’s 21% of the total amount and you must include it on every invoice that you make. There are a few exemptions: e.g. teaching English.
IRPF (Impuesto de la Renta de las Personas Físicas)
Taxes all income in a Fiscal Year. It is included in your invoices when you add retention (retención). This retention means that you advance future taxes to Hacienda, deducing – 9% for the first three years to – 20% for the following years.
The body that collects and manages social benefits. Autónomos have to pay a quota at the end of each month. This quota, known as Cuota a la Seguridad Social, represents 29.90% of your total income.
Before you can start working as self-employed (autónomo) in Spain you need to do two things. Register with the Spanish tax authority (Hacienda/ Agencia Tributaria) and then the Spanish social security system (Tesoreria General de la Seguridad Social).
Some blogs will advise you to obtain a social security number from Seguridad Social before registering as autónomo with Hacienda. This advice is incorrect: I was sent away from 3 different social security offices, trying to do get a number! You can only get a social security number, if you have a contract of employment or you’ve registered as autónomo.
Register as autónomo with Hacienda
Firstly, you must register with Hacienda as “Alta en el censo de empresarios, profesionales y retenedores”. Note, you don’t need to have a social security number to register as autónomo with Hacienda!
Don’t bother attempting the process online, the forms (036/037) are complicated, and mistakes could cause you to be taxed incorrectly. Better to simply follow the steps below and book an appointment with Hacienda. You’ll be in and out in 30 minutes and because you’re an “individual” the civil servants do everything for you. That means, you don’t need to fill in modelo 36 or 37. I wasted 3 hours of my life by not knowing this detail!
The Hacienda appointment is an extremely straight forward process:
Once called, you’ll be asked what economic activity you wish to perform (e.g. English teacher). The civil servants use this to register you under a specific tax activity code. Secondly, they’ll ask for the date on which, you wish to become autónomo. You can say the following day but know that you must register at Seguridad Social within 30days from your chosen date.
After registering with the tax authorities (Hacienda), you have 30 days to contact the Seguridad Social office to inform them that you’ve become self-employed in Spain. Before you do this, make sure you have:
You don’t need to book an appointment, just got to your nearest Seguridad Social office (look for the FM symbol.)
I recommend the office at Calle de La Cruz 7, which proved to be the most helpful out of all the offices I went to. They get busier as the day goes on and shut at 2pm, so it’s better to go in the morning. You’ll need to take the following as part of your social security application:
Filling in your TA.1 & TA.521-1 application forms
Don’t worry if you’re not sure about something on either form. Simply leave the section blank and the staff at the Seguridad Social office will help you. Really though, I didn’t even attempt the 2nd page of TA.521-1 and they didn’t mind. Remember, your “Documento Identificavo” is your NIE number and not your passport number!
Again, this process is pretty straight forward now that you know what to do. Simply go to the receptionist with all your documents from above and say that you wish to register as autónomo. You’ll be sent to wait on the 1st floor until you are called to one of the agent’s desks. The agent will input everything into the computer and help correct any mistakes you may have made.
You’ll also be asked to choose a health insurance fund or “mutua” as part of the application (section 4.2 of TA.521-1). This is mandatory and will entitle you to free healthcare through the Spanish state healthcare system. The Seguridad Social office has a card with a list of funds, but to me they were just names on a piece of paper. I asked about the best for my situation, but they couldn’t help. Unless you want to do some in-depth research, I’d suggest you take the most common one: Mutual Midat Cyclops.
That’s pretty much it, if everything has gone to plan you’ll be given back all your documents and 2 new additions:
If you’re like me and you’ve never worked in Spain, you’ll need to take the 2nd document (Regimen Especial....) to your bank. This let’s you prove that you’re now eligible to use your account for economic activities in Spain.
That’s you completed all steps and you should hopefully now be set up as a freelancer in Spain!
If you successfully register as self employed (autónomo) in Madrid using this guide, or you find somethings changed, then please do let me know. I’d love to hear from you and will update the blog in the latter case to help future readers.
Remember to share this post with your friends/colleagues and good luck freelancing in Madrid!