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SELF-EMPLOYED

The financial aid available to Spain’s self-employed workers in 2024

We all know that being autónomo or self-employed in Spain can be tough, but thankfully there are several benefits available to help you out in the new year.

Published: 20 December 2023 12:05 CET
The financial aid available to Spain’s self-employed workers in 2024
Financial aid for self-employed workers in Spain in 2024. Photo: Liza Summer / Pexels

There are different types of financial aid available depending on where you live in the country, the aims you have for your business and the help you need. 

Aid for autónomos in Valencia

The regional government of Valencia, through the Valencian Institute of Business Competitiveness (IVACE), offers an annual aid programme to promote the digital transformation of small businesses. The aid consists of non-refundable subsidies of up to 40 percent of eligible costs, with a maximum of €100,000 per beneficiary. You can find out more about the programme via the dedicated page on the Valencia government website. 

READ ALSO: Everything that changes for self-employed workers in Spain in 2024

Aid for autónomos in Madrid

There are in fact three different types of benefits self-employed in Madrid can apply for next year. These are:

– Madrid offers subsidies to maintain the employment of self-employed workers and micro-businesses, to facilitate the transition of their activity towards a digital and environmentally friendly economy. These grants are awarded directly.

– The Madrid Collective Entrepreneurship Promotion Programme encourages collective entrepreneurship in the region by granting aid that covers part of the initial expenses necessary for the constitution of cooperatives and labour companies. This could include investments for expansion and development. 

– Madrid also offers aid for workers who become self-employed which subsidises part of the expenses necessary to start their businesses. The aid aims to promote corporate social responsibility and work-life balance. New autónomos can also benefit from not having to pay social security in their first 12 months of operation, providing they haven’t previously been self-employed in the last two years. 

You can find out more about each of these aid programmes via the dedicated page on the Madrid government website. 

READ ALSO: How self-employed workers in Spain can get a better pension 

Financing

The Official Credit Institute (ICO) offers to guarantee financing for self-employed and small businesses that need liquidity or to make investments. The guarantees cover up to 80 percent of the principal of loans or leasing granted by financial institutions, with a maximum term of eight years and a grace period of up to 24 months. You can find out more about how to apply for financing via the official ICO website.

Benefits for those hiring unemployed workers

The Ministry of Labour and Social Economy, through the State Public Employment Service (SEPE), manages an incentive programme for the permanent hiring of unemployed people to promote the creation of stable employment.

The incentives consist of bonuses on business contributions to social security of up to €1,800 per year for three years, for each unemployed person who is hired on a permanent full-time basis. You can find out more about this aid on the following website. 

Zero social security payments for those in the Canary Islands, Extremadura and Galicia

In 2024, new self-employed workers in the Canary Islands, Extremadura and Galicia will join those in some of Spain’s other regions (such as Madrid) and benefit from not having to pay social security when they first sign up.

In the Canary Islands, the so-called zero quota will apply from January 1st, 2024. Extremadura will reward its new self-employed workers with aid of €960 per year which should be used for social security contributions. All new self-employed workers in Galicia will also be able to enjoy the zero quota from 2024.

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For members

TAXES

The big tax declaration change Spain’s self-employed need to know

If you're self-employed in Spain there are a few new changes you need to be aware of when it comes to submitting your income tax return this year.

Published: 22 March 2024 12:08 CET
Updated: 31 March 2024 08:07 CEST
The big tax declaration change Spain's self-employed need to know

As if being self-employed in Spain wasn’t complicated enough, there are several new changes you should know about for 2024. 

The Personal Income Tax (IRPF) campaign for 2023 campaign runs from April 3rd to July 1st this year. This means you must submit your annual Declaración de Renta for the money you earned last year between these dates. 

This year is different for autónomos because you’ll be required to present your tax return whether you had losses or profits in 2023. In previous years, it was only necessary if you had profits over a certain threshold or if it was your first year filing it.

READ ALSO: Everything that changes for self-employed workers in Spain in 2024 

But this year, even if your business has not performed as expected and you actually incurred a loss, it will still be mandatory to present these to the Tax Agency. 

According to experts from the financial comparison site Banqmi, “The Tax Agency does not have complete information on the activity of each self-employed person and that is why an adequate check and verification must always be carried out”. 

The second change that’s new for this year is that the percentage of expenses you are allowed to deduct has been raised from 5 to 7 percent. 

READ ALSO – La Renta: What items can you deduct on your Spanish tax return?

Banqmi expert Antonio Gallardo, states: “It is important to note that only the self-employed who carry out professional activities who are not an actual business, and who do so through the direct estimation regime, are entitled to this right, therefore, those who do it by modules are excluded”. 

The direct estimation regime is when taxes are calculated based on the actual income and expenses of the business during the fiscal year. This means that net profit or loss is calculated by subtracting the deductible expenses of the activity.

READ ALSO: Nine mistakes to avoid when filing your Spanish tax return

The types of tax deductions those on this type of regime can apply include:

  • Monthly Social Security contributions
  • Deductions for the vehicle usage (if it applies to your business)
  • Deductions for business-related training expenses
  • Special deductions, such as research and development expenses
  • Tax relief at a regional level

When it comes to regional tax deductions, self-employed workers have access to special rates depending on the region they live and work in. For example, Madrid, Asturias and the Canary Islands offer these types of tax reliefs.

READ ALSO – Q&A: What is Spain’s flat fee for new self-employed workers?

Additionally, during the first year of being registered as self-employed, 20 percent of your profits can be deducted. If this is the case, you have the right to apply the same deductions as a company registered for Corporate Tax (25 percent of research and development expenses for example).  

One of the main obstacles for self-employed workers when filing their annual personal income tax return is that the Tax Agency does not have complete information on all transactions carried out. 

“Although they receive information about part of your expenses and income, this is incomplete, so you must always carry out adequate verification to avoid errors and the hassle of making rectifications or complementary statements,” Banqmi experts conclude. 

If you’re unsure about any of your tax returns this year, whether you have to file, and exactly what you can deduct, it’s important to contact your gestor or a tax advisor. Remember that everyone’s situation is slightly different. 

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