For a while now, the government has been muttering about a new set of reforms to the Spanish tax system. They’ll be being discussed and confirmed all throughout the month of June, but to give you a special “taster” of how taxes for “autónomos” (the self-employed) in Spain could be affected, here’s some of the proposals Rajoy’s government have come out with.
Please note that none of these proposals have been confirmed as of yet. This article is based on things I’ve heard, people I’ve spoken to and Spanish-language newspapers and blogs I’ve read. Above all, I’d like to thank the infoautonomos blog in particular for being – as always – a great source of info.
1. VAT increase to 23%
Here comes the whopper: a maximum VAT rate increase from 21 to 23% has been proposed, with many of the goods and services that currently benefit from reduced rates being reclassified and put into the highest-rate category. Let me know what you think of this in the comments box below.
2. Goodbye to the modular system
Some classes of freelance worker in Spain currently pay tax under a system of “módulos” – that is, they pay some of their taxes according to predicted rates for their sector, rather than having to present records of all their earnings. This applies to a minority of workers such as plumbers, fishers, construction workers, taxi drivers, hairdressers and some hotel and bar owners. The modular system is being phased out, and will be kept only for a very limited percentage of taxpayers.
3. Lowering business tax
Don’t get excited: the business tax (“Impuesto de Sociedades”) only applies to societies, companies and associations. Run-of-the-mill freelancers do not pay this in any case.
4. No excuses for not paying your IRPF
At the moment, some types of income are not charged IRPF income tax. An example of this is redundancy payments, which until now have been exempt from this kind of tax. The proposal is to change this, and so make all forms of income taxable.
5. The cost of hiring will be lowered
To sugar the pill of pushing up VAT, it’s been proposed that employers’ social security contributions for new employees are lowered.
What do you make of the new tax reforms? How will they affect you?
Photos and text by Penelope
