Today, we’re talking about tax forms for freelancers in Spain or modelos to the locals. And unfortunately, there’s no Adriana Lima nor David Gandy to be seen here. Modelos are the boring old forms that we freelance folks have to deal with all the time. You know, those pesky admin forms that make you want to rip your hair out? Yeah, those ones.
But hey, don't worry too much. If you don't feel like dealing with all that paperwork, you can stop reading right now and sign up with Xolo, where we’ll take care of all your forms for just €45 a month. But if you're still interested in learning more, check out our guide below.
What are the tax obligations of a freelancer?
Here we're going to break down all the tax obligations that come with being your own boss. Yes, we know it sounds boring, but trust us, it's important stuff.
So, what kind of tax obligations are we talking about here? Well, as a freelancer, you've got quarterly and annual tax returns. Plus, there are different processes related to personal income tax, VAT, and your initial registration as a freelancer.
But don't worry, we've got your back. We'll start by taking a closer look at each of these processes and then move on to the different tax forms you'll need to fill out.
Sound good? Great, let's get started!
Starting at the beginning: Registering as a freelancer in Spain
Before we can dive into all the fun paperwork, we need to cover the basics. And that means registering as a freelancer. Now, we know it may not sound like the most exciting thing in the world, but it's a necessary evil.
Basically, there are two tax forms for freelancers to register as self-employed workers in Spain. First, you'll need to sign up for the Special Regime for Freelancers (RETA) — that’s with the social security department. Second, you need to go to the tax authorities (Agencia Tributaria) and register for the Economic Activities Tax (IAE). Trust us, it's not as complicated as it sounds.
VAT
There are two kinds of tax that all freelancers have to deal with. First up, we've got VAT — value-added tax.
VAT facts:
- VAT is a consumer tax, not an income tax. Almost everything you buy has VAT attached, and your clients will probably have to pay VAT on your services.
- VAT is an indirect tax. The consumer (your client) doesn’t pay the government directly. They give it to you, you hold onto it, then pass it to the government in your quarterly and annual tax returns.
- You can get VAT tax breaks! When it comes to passing on your clients’ VAT to the government, you’re eligible as a freelancer to keep some.
- You have to include VAT on your invoices unless you’re exempt.
- VAT is not progressive. This means it is fixed, although there are three rates:
- General rate (21%): This is the general rate since the 2012 reform, which you will have to apply as long as your activity is not exempt or falls into the following two groups.
- Reduced rate (10%): This applies to basic products: most food, hotel services, housing, transportation, feminine hygiene products, cinema, and more.
- Super-reduced rate (4%): Only basic necessities such as bread, vegetables, newspapers, books, and medicine are included here.
Income tax
Next up, we've got the personal income tax, aka the IRPF.
Income tax facts:
- IRPF is a progressive tax, so the more you make, the more you have to pay.
- You have quarterly and annual tax returns.
- You have to include a 15% retention on your invoices to Spanish companies unless you qualify for an exception.
We’ve got another article that explains exactly what IRPF to include on your invoices to stay compliant with the Agencia Tributaria.
What forms does a freelancer have to file to register with the tax authorities and social security?
To take the most logical starting point, we’ll cover the three forms you need to register as a freelancer with the Agencia Tributaria and the Tesoreria General de la Seguridad Social — the tax authorities and social security, respectively.
Form 036
We'll start with the classic, the OG, the one and only Form 036. It's like your first date with the Agencia Tributaria, and hopefully, it's a long-lasting relationship, like Monica and Chandler in Friends.
With Form 036, you give the Agencia Tributaria your personal deets, what kind of work you're going to do, and where you're doing it. Then, the treasury (Hacienda) will register you as a freelancer and hit you with the IAE tax.
P.s. we’ll use Agencia Tributaria and Hacienda fairly interchangeably here. They both refer to the tax authorities.
Form 037
If you want to keep it simple, you can go for Form 037. It's like a Bumble date, rather than the theater then wine-and-dine date of times past. But the result is the same — you get registered as a freelancer with Hacienda and IAE.
Simple = good, right? Everybody wants to take this simple route, but Form 037 has a few requirements:
- You have to fill it in directly — not through a representative. If you want to leave it in Xolo’s capable hands, no problem, we’ll do Form 036 for you.
- Your tax and administrative addresses must be the same.
- You cannot be in a special VAT regime.
- You do not perform operations across the EU.
- You're not going to open a company.
Form TA0521
Moving from the tax authorities to the social security side now. Form TA0521 is how you register with social security, and will probably be the only form you fill in that isn’t for the Agencia Tributaria.
What forms does a freelancer have to file for VAT?
Now, let's talk about VAT. Lucky for some, if you're an artist, doctor, teacher, or work in finance or insurance, you can forget about this part. But for the rest of us, it's time to get serious with Forms 303 and 390.
Form 303
Form 303 is where we deduct all the VAT we have paid throughout a quarter from all the VAT that our clients have passed onto us. Then we pay the remainder to our friends at Hacienda — our quarterly VAT return.
In context, let’s say you bought a laptop for €1000, 21% of which is VAT (€210). You also had a good month and gathered a grand total of €500 in VAT from your clients.
€500 - €210 = €290 payable to Hacienda in VAT.
Form 390
Last but not least, we have Form 390 — the annual summary of all the 303 forms we filled out throughout the year. It might seem pointless, but it's mandatory. It's like those endless TV repeats we all watch when we’re in standby mode from 26 to 30 December.
What forms does a freelancer have to file for personal income tax in Spain?
Welcome to the world of personal income tax. Here, we’ve got not one, not two, but SEVEN different tax forms to deal with, depending on our situation. Yay, bureaucracy!
Form 130
First up, we've got Form 130 — the self-assessment form we need to fill out every quarter for personal income tax. If 70% or more of your earnings come from abroad, you’ll fill in Form 130 and pay 20% of your taxable amount for the previous quarter all in one go. Don’t worry, the books will all get balanced with your annual tax return.
Let’s take Lisa as an example. She’s a web designer who earned €5000 last quarter. She also bought a new laptop for €800 💻, spent €10 a month on a subscription to design software, and a massive €250 a month on her fancy coworking.
Math time!
€5000 - (€800 + €10x3 + €250x3) = €3420
With Form 130, Lisa has to pay 20% of her taxable amount €3420, which is €684.
Form 131
Now, if you're one of the lucky ones who gets to file Form 131, that means you're part of the objective estimation regime of the IRPF. This helps to simplify your tax and accounting. Fancy, right?
Basically, if you work in specific sectors — retail trade, hospitality, construction materials, care and beauty, or car workshops — and make less than €300,000 annually, you get to use this form instead of 130. #Winning
Form 100
And finally, we've got Model 100, the granddaddy of 'em all, your annual income tax return, La Declaración de la Renta. It’s the form that strikes fear into the hearts of workers all over Spain. Even if you’re not a freelancer, you have to complete Model 100, and honestly, it’s much easier to mess up than it is to get right.
That’s important because it’s the one that determines whether you're getting a refund or having to pay out of pocket to balance your books. It's a compilation of everything you've submitted throughout the year on Forms 130 and 131. And the deadline? 30 June of the following year. So for the 2021 tax return, you gotta get your butt in gear by 30 June 2022.
Form 111
Form 111 is how we pay our employee retentions to Hacienda or the retentions from invoices we pay to other freelancers.
Form 190
Form 190 is basically an annual summary of your quarterly 111s. But don't worry too much about those for now. Just remember to keep track of your expenses, and don't forget to deduct what you can to minimize your tax burden. Stay strong, fellow freelancers! 💪
Form 115
Form 115 is pretty much the same as form 111, except it's all about paying withholdings for renting the space where we do our freelance work. If you work from home and don't pay rent for an office, lucky you — no need to fill out this form and you can work in your pajamas!
Form 180
Form 180 is just a yearly summary of the four 115s we've filed over the year.
Other tax forms for freelancers in Spain
Almost at the end now! But there are some tax forms that are a bit unique. We’re on the final stretch now!
Form 347
Usually submitted in February, Form 347 summarizes the transactions we've made with customers or suppliers where we've accumulated more than €3,005.06 during the previous year.
Form 349
Form 349 is only really a concern if you're operating in other EU countries and making a lot of money — we're talking over €50,000 a month here!
Form 309
Finally, we've got Form 309. This is for self-employed retailers who need to submit a non-Spanish EU purchase, but it's just a one-off thing, so it's known as non-periodic liquidation.
Conclusion
So that’s it! A total of 15 different forms to deal with, including the final three special ones.
But if you're not feeling up to handling all that paperwork, we don’t blame you! Sign up with Xolo and we'll handle it all for you. No need to stress — we've got your back! 💪
