The main concern for a self-employed worker is the taxes they have to pay, as these freelancers must meet a series of recurring tax obligations. No self-employed person wants to be in debt to the Tax Agency or Social Security, but what taxes must they pay in 2023?
First of all, let’s clarify the concept of a self-employed worker. This professional is defined as a natural person who, on a regular, personal, and direct basis, carries out an economic activity for profit on their own behalf. The main characteristic of these individuals is that they are not subject to any type of employment contract.
They work for themselves and often have employees, in addition to operating a business open to the public. And of course, since they are not hired by anyone, they must pay certain taxes to the Tax Agency and Social Security. At Educa.Pro, we review these taxes and break them down in detail.
VAT is a tax added to the value of any good, service, or import. If you, as a self-employed worker, offer services or products, you must include VAT on your invoices and later reconcile your accounts with the Tax Agency.
However, the payment is calculated through the difference between the VAT charged on income invoices and the VAT paid on expense invoices necessary to carry out the activity. How often must you pay VAT? It is paid quarterly.
IRPF is an income tax on individuals that also applies to the self-employed. Essentially, it means paying taxes based on the income generated. The IRPF applies equally to all, depending on their income bracket. The more you earn, the more you’ll pay in income tax.
First, it’s important to note that Spain has a “objective estimation” or module system. In this system, IRPF is calculated based on objective parameters such as the size of the business premises or the mileage of a vehicle. Therefore, only certain activities can be taxed under this system—never those earning over €250,000 annually.
For regular IRPF withholdings, in 2023 the following tax brackets apply based on income:
To be a fully registered self-employed worker, you must first enroll in the Special Regime for Self-Employed Workers (RETA). Registering means you must pay a monthly fee known as the “self-employed contribution.” This fee must be paid from the very first day you begin your activity.
One key factor here is that the contribution base determines both how much you pay and the benefits you are entitled to as a self-employed worker. In other words, depending on your contribution base, you’ll have access to different benefits in case of retirement, sick leave, or cessation of activity.
As of January 1, 2023, a new contribution model for the self-employed was introduced. It’s a progressive model valid for three years (2023–2025). During this period, those earning less will see their fees decrease, while those earning more will see an increase.
Here are the 15 contribution brackets for self-employed workers:
Bracket Minimum contribution base 2023 (€) Contribution 2023 (€) Up to 670 751.63 230 Between 670 and 900 849.67 260 Between 900 and 1,166.70 898.69 275 Between 1,166.70 and 1,300 950.98 291 Between 1,300 and 1,500 960.78 294 Between 1,500 and 1,700 960.78 294 Between 1,700 and 1,850 1,013.07 310 Between 1,850 and 2,030 1,029.41 315 Between 2,030 and 2,330 1,045.75 320 Between 2,330 and 2,760 1,078.43 330 Between 2,760 and 3,190 1,143.79 350 Between 3,190 and 3,620 1,209.15 370 Between 3,620 and 4,050 1,274.51 390 Between 4,050 and 6,000 1,372.55 390 6,000 or more 1,633.99 420
You’ve probably heard the phrase “this is tax-deductible” many times — but what expenses are actually deductible? You can deduct all expenses that are part of your professional activity and directly related to it. In some cases, you’ll only need a receipt; in others, you’ll need a full invoice.
Below is a list of deductible expenses. Keep in mind that it depends on the nature of your activity.
IAE is classified as a municipal tax, meaning it’s managed and collected by local councils in each municipality. This tax applies to performing economic activities — professional, business, or artistic — within a municipality’s territory.
The tax is based on the economic capacity of the activity and is determined by several parameters such as the specific activity, company size, and revenue generated.
The main characteristics of the IAE include:
If you wish to obtain accurate information about the IAE in your country or region, we recommend consulting your local tax authorities or professional tax advisors.
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