Freelancing in Spain: Legal Setup, VAT & Deductions

 

Thinking of working as a freelancer in Spain? Whether you’re a digital nomad, remote contractor, or creative entrepreneur, understanding Spain’s freelance system is essential for staying legal and optimizing your taxes. Here's your 2025 guide to freelancing in Spain.

Are you considering freelancing in Spain while enjoying more flexibility and legal residency? Learn how the Spain Digital Nomad Visa can help you work remotely with legal status, tax perks, and access to Europe.

 

🧾 Legal Setup: Becoming an Autónomo

To legally freelance in Spain, you must register as an autónomo (self-employed worker). This process allows you to issue invoices, pay taxes, and contribute to social security.

Steps to register:

• Obtain a NIE (Foreign Identification Number)
• Register with the Spanish Tax Agency (Agencia Tributaria)
• Enroll in the Social Security system (Seguridad Social)

Most freelancers will register under the modelo 036 or 037 form for tax purposes.

💶 Monthly Social Security Payments

Freelancers must pay a fixed monthly social security contribution. In 2025, the standard base rate starts at around €230/month, but a progressive system applies based on your income.

Note: New freelancers may benefit from a reduced rate (tarifa plana) of €80/month during the first year.

💼 Invoicing & Taxes

Freelancers must issue invoices with the correct information:

• Your name, NIF (tax ID), and fiscal address
• Client’s name and NIF
• Date, invoice number, description of service
• VAT (IVA) and income tax retention if applicable

🔢 VAT (IVA) for Freelancers

VAT in Spain is called IVA and usually sits at 21%. You must add IVA to invoices for services provided within Spain or the EU (unless exempt). Quarterly VAT returns are mandatory.

• IVA collected from clients → paid to the tax agency
• IVA paid on business expenses → deductible

Services offered to non-EU clients may be VAT-exempt (consult your tax advisor).

📄 Quarterly Tax Declarations

Freelancers in Spain file taxes quarterly:

• Modelo 130: Income tax prepayment (IRPF)
• Modelo 303: VAT return

Additionally, an annual income declaration (Declaración de la Renta) is required each spring.

📉 Deductions & Allowable Expenses

You can deduct many business-related expenses to reduce your taxable income:

• Home office expenses (proportional use of rent, electricity)
• Software and equipment
• Phone and internet bills
• Transportation for business purposes
• Professional training and coworking spaces

Keep all receipts and use accounting software or a gestor (tax advisor) to stay compliant.

🌍 Can Foreigners Register as Freelancers?

Yes, non-EU citizens can register as autónomos, but they typically need a residency permit that allows self-employment. The Spain entrepreneur visa or the digital nomad visa are common options.

📚 Final Tips

• Work with a gestor for tax filings and deductions
• Track income and expenses monthly
• Don’t miss quarterly deadlines—fines apply
• Apply for reduced social security if eligible

📺 Want to Understand Spain’s Freelancer System Better?

Here’s a practical video that walks through how to become autónomo, how VAT works, and how to avoid common mistakes as a freelancer in Spain: