Before you jump into self-employment, you’ll need to inform the Spanish tax authority. In this article, we explain what the Special Regime for Self-Employed Workers (RETA) is and how you can register.
6 min read
Thinking about starting a business, becoming a freelancer, or providing professional services in Spain? It’s an exciting step! Before taking the plunge into self-employment, there are some things that you need to consider when it comes to Spanish taxes, though—and we’re here to help.In Spain, self-employed workers have to contribute to a special tax regime that has its own rules, conditions, and forms. Already feeling stressed about more paperwork and procedures? Don’t be alarmed—in this article, we explain what the RETA is (including what that acronym stands for) and how you can register as a self-employed worker. Let’s go!
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RETA: The social security regime for self-employed workers
RETA stands for “Régimen Especial de Trabajadores Autónomos” (Special Regime for Self-Employed Workers). As the name suggests, it’s a special social security regime that applies to people who are self-employed and is part of the general Spanish tax system.The following groups of people must contribute to the RETA:
Civil societies and societies or individual co-owners that hold communal property.
Self-employed workers who need to be members of a professional association, due to the nature of their work.
Directors and administrators of commercial companies, if they hold 50% or more of the capital shares.
To qualify for the RETA, workers must engage in a professional or economic activity that’s done on a regular basis, directly for profit, and independently, i.e. without any employment contract—for example, setting up and managing an online store.
Differences between the RETA and the general tax regime
Despite having the same powers, there are some differences between the RETA and the general tax regime.Under the general regime, companies set an employee’s contribution basis according to their salary. Under the RETA, however, self-employed workers choose their own contribution basis from within a range.The self-employed are also responsible for paying their own monthly social security contributions. For employees who are taxed under the general regime, this is handled by their employer.
How to register for the RETA
If you meet all the requirements for the Special Regime for Self-Employed Workers, then it’s time for you to register. First, you need to submit a completed T10521 form to any of the offices of the General Directorate of Social Security. You can also submit the form online through their main website. There are different versions of this document, depending on the type of self-employed work you plan to do. The next step is to tell the tax authorities about your registration by filling out form 036 or 037. Both documents are used to make changes in the Spanish business register and must be completed in order to start your professional activities. Keep in mind that form 037 is a simplified version of form 036 and is limited to self-employment. If you want to incorporate a company, you have to fill out form 036.
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Even if you’re eager to start your freelance work or your new business, it’s important to submit the proper paperwork first. According to the Spanish self-employment law passed in 2018, you must register for the RETA and with the Spanish tax authorities in the 60 days prior to beginning your professional activities. Once you’ve registered for the RETA, you can deregister or register again up to three times per year and change your tax basis up to four times per year.
How do I pay the RETA?
The purpose of RETA contributions is to ensure that self-employed workers have the same coverage as other taxpayers. That’s why self-employed workers pay the social security freelancer quota each month. The amount varies for each person, depending on their contribution basis.To help people determine their contribution basis, the Spanish government annually sets minimum and maximum amounts. In 2022, the minimum contribution basis is €960.60 and the maximum contribution basis is €4,139.40. The following bases have also been set:
Common contingencies: 28.30%.
Occupational contingencies: 1.30%.
Ceasing trading: 0.9%.
Professional training: 0.1%.
Rebates/incentives under the Special Regime for Self-Employed Workers (RETA)
In order to encourage people to become self-employed or found a company, the Spanish government provides self-employed workers with a whole array of rebates and incentives. These are offered through the RETA and have various requirements or conditions:
Flat rate of €60, aimed at new self-employed workers. Under this rate, self-employed workers are paid €60 per month for their first 12 months of professional activities.
Flat rate for young self-employed workers, aimed at women under the age of 35 and men under the age of 30. This is offered for an additional 12 months after the self-employed flat rate.
50% rebate for self-employed workers with disabilities, offeredduring the first five years of professional activities.
50% rebate for those collaborating with self-employed workers, during the first 18 months of professional activities.
50% rebate for self-employed residents of the autonomous cities of Ceuta and Melilla.
100% rebate during maternity or paternity leave.
50% rebate for self-employed workers working multiple jobs for the first 18 months.
100% rebate for leave to take care of minors or other dependents for 12 months.
100% rebate for self-employed workers who end their professional activities due to gender violence.
Besides the rebates and incentives we’ve mentioned here, there are many more listed on the social security website—so it’s worth checking which others might benefit you.
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Itching to start your own business in Spain? Here, you’ll learn what paperwork you have to complete, where to do so, and what you need to bear in mind on your journey into freelancing.
Itching to start your own business in Spain? Here, you’ll learn what paperwork you have to complete, where to do so, and what you need to bear in mind on your journey into freelancing.
