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José M.
José M., Attorney
Category: Spain Law
Satisfied Customers: 6056
Experience:  Spanish Attorney
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I am moving from the UK and wishing to live in Tenerife, I

Customer Question

I am moving from the UK and wishing to live in Tenerife, I will become a Fiscal Resident and be self employed Autonomo.
Can you confirm that the following simple example for the Annual income Tax calculation is correct
Annual income from sales and services = €15,000
Annual costs and expenses = €5,000
Profit = €10,000
Assume No IGIC on this example
Single person’s Allowance Assume €5,500 ( No extra allowances )
Annual Tax to Pay
(€10,000 profit – Personal allowance €5,500) = €4,500 tax @19% = €855
Submitted: 1 year ago.
Category: Spain Law
Expert:  José M. replied 1 year ago.
Hi thereThe first thing to know is that you pay no taxes when your total income is under 22.000 euros from your jobExpenses to be Autonomo is about 300 euros ( Social security cost ) even when first year you could get to pay less, but 300 euros per month is a real estimationSo, if you makes bills of 15.000 euros, you will have to pay 300*12 = 3.600 So you relly earn 11.400 and you do not have to pay IRPF for that money at all11.400/12 = 950 per month euros in your example. No expenses no other taxes included
Customer: replied 1 year ago.
Hi Jose M,
Are you saying that if I register with the Local Tenerife Tax office to become Autonomo I will only have to Pay Social Security of approx €300 per month and If my sales income are less that €22,000 per year, I will pay no other Taxes, will I still have to submit a Quarterly modelo 130 and year end modelo 100 ?
Regards John.
Expert:  José M. replied 1 year ago.
Hi JonhYou will have to pay 4 every three months IGIC ( diference between you pay and you charge for, and personal taxes IRPF, 19 percent, but next year you could claim for the total sume paid for IRPF as long as you do not get more minimum to ay what is 22000 eurosBut Autonomos has to be paid and it is about 300 euros monthlyThank you
Customer: replied 1 year ago.
I Do not fully understand your replies.
I am aware you have to pay the Social Security of approx €300 per month, but if you do not pay any Tax on incomes less than €22,000 as you state, why do the Spanish have a list of income Tax bands as shown below – Earnings for 2015 rates
Rate bands from Rate Bands to ***** %
0 12,450 19%
12,450 20,200 24%
20,200 34,000 30%
34,000 60,000 40%
Can you explain how the rates are applied ? are these rates used on earnings minus costs and allowances and the % tax applied to the earnings balance.Regards John.
Expert:  José M. replied 1 year ago.
the list is real but the first 22.000 euros do not have To pay, so they charge you but at the end of the year you can get your money back if you are under 22.000 Its called mínimo exento
Customer: replied 1 year ago.
I understand the €22,000 only applies if you are employed by a legal Spanish company who pays you a wage and deducts Tax & social from your monthly payments. If you are Autonomo, you pay your Taxes Quarterly at 20% on your income minus expenses, at the end of the year you pay in accordance with the Tax bands, and could get a refund depending on your annual allowances.
is this not the case ?
Regards John
Expert:  José M. replied 1 year ago.
Yes Sir, I was wrong, as Autonomo the 22.000 euros limit does not fit the case and then you have to apply the table, 20 per cent of your incomeSorry for thatThank you