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Income tax for self employed workers in Spain Income tax for self employed workers in Spain

Legal and the Law in Spain

New self-employed workers must submit tax returns irrespective of earnings



The self-employed will be the workers who will experience the most changes in their income next year. Furthermore, with the new contribution system, the Executive aims to ensure that self-employed workers contribute based on their real income, as salaried workers do, and to prevent them from contributing the minimum amount.

Thus, with this new contribution system based on real income, all self-employed people who have registered in 2023 or are going to do so shortly, will have to submit their Income Tax return, regardless of what their income has been and the time that their situation as self-employed workers has lasted, and therefore do not qualify for no submission due to low earnings.

This change is reflected in Royal Decree-Law 13/2022, of July 26, which modifies article 96 of the Personal Income Tax Law to establish this obligation to submit the declaration to all those individuals who have been registered as self-employed in 2023. Thus, the General Treasury of Social Security will be able to know what your real income has been, no matter how small it may be, and determine your contribution to pay for the following year.

With the entry into force of this regulation, a last paragraph is added to article 96 of this Law in which it is stated that “all those natural persons who at any time during the tax period would have been registered will be obliged to declare, as self-employed workers, in the Special Regime for Self-Employed or Self-Employed Workers, or in the Special Regime of Social Security for Sea Workers.”

To date, self-employed workers had limits that determined their obligation or not to submit the annual personal income tax return. In the case of self-employed workers, only those who had obtained profits greater than 1,000 euro per year had to declare personal income tax.

The previous Minister of Inclusion, Social Security and Migration, José Luis Escrivá (now Minister of Digital Transformation), already estimated that there were more than 200,000 self-employed workers who did not file the personal income tax return and that, with the new system, they will become be required to declare income.

One of the most recurring sanctions is that for not submitting personal income tax before June 30. And here two scenarios open up. In the event that the tax return is unpaid, the taxpayer will have to pay the result and a fine. According to the tax experts, the penalty consists of the payment of between 50% and 150% of the total debt, a charge that may increase if the Treasury considers that it has suffered economic damage or if this has already occurred. It has happened on other occasions.

On the other hand, there are people who do not present it, either due to ignorance or simple laziness. This practice also carries a penalty, which could reach 200 euro. Consequently, if the refund is less than this fine, it could happen that a taxpayer who receives a positive result at first will later have to pay.

The review period by the Tax Agency for personal income tax can be extended up to 4 years. Therefore, the Treasury has until 2028 to notify us of any mistakes we make in our next income and could send us a letter after that time.

According to data from the Tax Agency, this year a total of 22,889,072 taxpayers submitted their income tax return, 3.88% more than last year, with more than 6 million of these returns having a result to be entered by the taxpayers. To this will be added next year 200,000 new self-employed workers.

The post New self-employed workers must submit tax returns irrespective of earnings appeared first on Spain Today – Breaking Spanish News, Sport, and Information.



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