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The advantages of becoming self-employed with a new legislation

Last November, 2016, the Congress of Deputies (Congreso de los Diputados) approved the reformation of the Self Employment Law. It included a series of measures that, with total certainty, will imply a number of advantages for entrepreneurs and self-employed workers. In total, this legislation will affect 3.5 million people in Spain.

The first of the measures contemplated by this change in legislation affects those who are going to be registered for the first time as self-employed. The flat fee of 50 euros approved by the previous government at the beginning of the legislation, changes the duration of the registration from 6 months to 12 months. In addition, self-emplyed workers will also have the possibility of adding bonuses and deducting job-related expenses for common contingencies, although it does not affect those who are no longer trading. 

In addition, the legislative changes proceed to adjust the real income of the self-employed in relation to the contribution system. Thus, those whose income does not reach the Minimum Interprofessional Salary, which is currently at 655.20 euros but soon to be raised to 708 euros, will not be obliged to make any contributions. 

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On the other hand, this new law solves another one of the problems that self-employed workers have been complaining about. Up until the approval of this new law, the contributions accounted for a whole month, regardless of the day of the month in which they were made. However, from now on, they will only count from the very moment in which it takes place. It should also be noted that, in case of delay in the payment of the self-employed fee, the due date for surcharge payment will be more flexible.

The new legislation also contemplates changes in the contribution base. Before, a self-employed person could only make two payments a year, while now he can do four, that is, one for each quarter. In addition, there has been more clarity with regards to expense deductions, allowing the entrepreneur to differentiate more easily between VAT and IRPF. This is especially noticeable in the expense claims for a car that is used for business purposes.

Finally, from this point onwards, maternity leave allowances will be granted without an indispensable requirement for hiring a substitute worker. In fact, the goal is that female entrepreneurs do not have to pay the fee during the first four months after giving birth. These are, without a doubt, a series of great advantages specially designed to encourage the Spanish to register as self-employed.

Engel & Völkers

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28004 Madrid
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