Read news from:
Austria
SHARE
COPY LINK

TAXES

New self-employed workers in Madrid to pay no social security tax

Madrid’s president on Monday announced that her government will cover the monthly social security fees of ‘autónomos’ that register in Spain’s capital, a decision which will save new self-employed workers hundreds of euros.

Published: 13 September 2022 09:35 CEST
madrid social security fees self employed
Madrid has long been considered to have the most lenient tax system in Spain, and the region's president Isabel Díaz Ayuso wants to continue promoting this image. (Photo by ANDER GILLENEA / AFP)

Madrid’s right-wing regional president Isabel Díaz Ayuso on Monday promised Madrileños a number of fiscal benefits and other improvements, with the standout announcement aimed at attracting new self-employed workers to the Spanish capital.

From Q1 2023, new autónomos in Madrid will have their social security fees paid for by her government for their first year of self-employed work in the region.

If their monthly earnings are below minimum wage in the second year (€1,166 gross a month), they will also have their social security fees covered by the regional government.

Self-employed mothers who have the right to a tax reduction after returning to work less than two years after the birth or adoption of their child will also not be charged social security tax during the first two years back in self-employed work.

The standard fixed fee for newly registered self-employed workers across Spain is currently just under €70 a month for the first year of work, rising progressively to €294 a month by the end of the second year of autónomo work.

Madrid already had more beneficial fixed social security fees for self-employed workers than the rest of Spain – €50 a month for the first two years – but this new ‘zero fee’ (tarifa cero) is even more alluring as the country’s social security ministry will next year start charging autónomos based on real earnings.

Therefore, new autonómos (self-employed workers) in Madrid stand to save hundreds or potentially several thousand euros during their first year or two years of work.

FIND OUT: Will you pay more under Spain’s new social security rates for self-employed?

There are currently 419,000 self-employed workers in the Madrid Community, although it is estimated that 30,000 new autónomos will benefit from the ‘zero fee’ offering.

Monthly social security tax payments give self-employed workers in Spain access to sick pay, maternity/paternity leave, the public healthcare system and other welfare benefits. This tax is separate from IRPF, which is income tax paid on earnings.

The general consensus is that Madrid is among, if not the top region, with the most lenient tax system in the country.

READ ALSO: Why you should move to Madrid if you want to pay less tax

Member comments

Log in here to leave a comment.
Become a Member to leave a comment.

PROPERTY

Spain’s Valencia reduces IBI property tax for 700,000 homeowners

Valencia City Hall has announced that it will reduce the IBI property tax bill by at least 20 percent for at least 70,000 property owners in the city, meaning the average homeowner will pay €72.50 less a year.

Published: 7 May 2024 09:47 CEST
Spain's Valencia reduces IBI property tax for 700,000 homeowners

IBI (Impuesto sobre Bienes Inmuebles) is similar to council tax bill in the UK, but is only paid once per year. How much you pay depends on the value and location of your home. Generally, it’s paid by homeowners only, not tenants. 

Valencia City Hall have said that 99 percent of residents will benefit from the lower rates, saving them a combined total of €70 million.

READ ALSO: What is Spain’s IBI tax and how do I pay it?

The Councillor for the Treasury and first deputy mayor, María José Ferrer San Segundo, has denounced “the fiscal hell to which the previous government subjected its citizens to for eight years”, and has celebrated that “the important respite that has finally arrived for the residents of this city, thanks to the reduction in taxes and rates approved by the government of mayor, María José Catalá”.

In real terms, it will mean an average reduction of €72.50 per household, which represents a total saving of €70 million as a result of the 20 percent reduction in the general tax rate.

IBI bonuses have already been applied to large families with reductions of 60 percent for those in the general category and 90 percent for those in the special category. In total, the 3,800 large families that pay IBI taxes in Valencia will be able to benefit from these measures.

“This is money that will stay in the pockets of Valencians and that will also contribute to further energising the economy and promoting job creation,” Ferrer said.

Other taxes besides the IBI will also be reduced in Valencia include the Vehicle Tax with an average reduction in rates of 8.5 percent. The reduction affects all types of vehicles and will mean a total saving of €2,082,542.40.

The capital gains tax for inheritance from relatives will also be reduced by the legal maximum of 95 percent, regardless of the cadastral value of the property.

SHOW COMMENTS