Can I freelance or start a side business?

Many people in Spain work as self-employed (autónomo). It is quick to set up, but you register with both the tax office and social security, pay a monthly contribution and file returns every quarter. Check your permit before you take on a client.

Check your permit first

• A renewed work permit, long-term residence and citizenship let you work for yourself freely
• On a first-year employee permit, you can also do self-employed work, as long as your job remains your main activity
• A separate self-employed residence permit is limited to one region and one sector in its first year
• Digital nomad (international teleworker) permit: employees can only work for companies outside Spain. If you are self-employed, Spanish clients can be no more than 20% of your work
• The non-lucrative visa doesn’t allow any work. See Which Spanish visa do I need?

Registering

1. Tax office: file form 036 with the Agencia Tributaria before you start. It records your activity and your VAT and income tax obligations. The simplified form 037 was abolished on 3 February 2025, so everyone now uses 036. Changes go in within a month
2. Social security: register in the self-employed scheme (RETA, Régimen Especial de Trabajadores Autónomos) before you start, and no more than 60 days ahead. You need your NIE and social security number. See How much tax will I pay in Spain?
3. Ask for the reduced rate when you register: it isn’t applied automatically
4. Many people use a gestor (administrative agent) or asesor fiscal for the registrations and quarterly returns

Contributions by income

Since 2023 your monthly contribution (cuota) depends on your expected net income. You pick a band, pay provisionally, and social security adjusts it once your tax return shows what you really earned. Net income for this purpose is your business profit plus your contributions, less a 7% allowance for general expenses. In 2026 the total rate is 31.5% of the base you choose. These are the minimum monthly contributions in each band:

The 2026 bands are the 2025 ones carried over, as no new state budget was passed. The maximum base for anyone is €5,101.20 a month.

The tarifa plana

If you haven’t been registered as self-employed in the last 2 years (3 if you had the reduced rate before), you pay a fixed reduced contribution for your first 12 months: €80 a month for 2026, or about €88.64 with the intergenerational equity surcharge. You can keep it for another 12 months if your net income stays below the minimum wage (SMI). Ask for it when you register.

Tax: quarterly returns

• You don’t file form 130 if at least 70% of your professional income last year had tax withheld by clients
• Spanish business clients withhold income tax from professionals’ invoices: 15%, or 7% in your first year and the next 2 if you didn’t work as a professional the year before. Tell clients in writing if you qualify for 7%
• Services to a business based outside Spain, such as a UK company, are generally not subject to Spanish VAT. Check with your adviser how to invoice them
• No one sets aside the rest of your tax for you, so keep a separate account for it

Invoices and Verifactu

Every invoice needs a number in an unbroken series, the date, your full name and tax number (NIF, usually your NIE), the client’s details, a description, the VAT rate and amount, and any income tax withheld. Corrections go on a separate corrective invoice. Spain is bringing in Verifactu, a standard for invoicing software that stops records being altered and can send them to the tax office. After a delay, the deadline is 1 January 2027 for companies and 1 July 2027 for autónomos and others. Use software that says it complies.

Sole trader or company (SL)?

If you control the company and work in it, you usually still pay into RETA as a company autónomo (autónomo societario). Get advice from an asesor fiscal before you choose. For your UK tax position, see Do I still pay UK tax?