Formalities and Obligations of Autonomo During the First Year (and How to Extend Tarifa Plana)

Starting as an autonomo, or self-employed worker, in Spain can feel overwhelming, but understanding the formalities and obligations for your first year can set you up for success.

It can also help you benefit from an additional year of the tarifa plana reduced Social Security contribution, if you meet the conditions and request the extension correctly.

Here is what you need to know.

1. Registering as an autonomo

Before you can start working, you need to register with the relevant Spanish authorities.

• Agencia Tributaria (Tax Office): submit Modelo 036 or Modelo 037 to declare your economic activity and VAT position, if applicable.
• Tesoreria General de la Seguridad Social (Social Security): register under the Special Regime for Self-Employed Workers, known as RETA.

You must complete these steps before issuing invoices or conducting business operations. Failure to register on time can lead to fines.

2. Obligations during your first year

Your first year is not only about registration. You also need to stay on top of Social Security, income tax, VAT and bookkeeping from the beginning.

Social Security contributions

Thanks to the tarifa plana, your monthly contributions to Social Security are significantly reduced during the first stage.

• First 12 months: pay a flat reduced rate, currently around EUR87 per month, regardless of income.
• After the first year, you can extend the flat rate for one more year if certain conditions are met.

This benefit is available if you are registering as an autonomo for the first time or if you have not been registered in the past two years, or three years if you previously used the tarifa plana.

Income Tax (IRPF)

Every quarter, you must calculate your net income and make advance payments toward your annual income tax where applicable.

• Calculate your net income: total earnings minus deductible expenses.
• Submit Modelo 130 when required.
• Pay 20% of your net profit as an advance on your annual income tax.

Value Added Tax (VAT / IVA)

If your activity is subject to VAT, you need to charge VAT on your invoices and file quarterly VAT returns.

• Charge VAT on your invoices where required.
• Submit Modelo 303 quarterly to declare VAT collected from clients and deduct VAT paid on eligible expenses.
• Review whether your activity has exemptions, reverse charge treatment or international VAT obligations.

Bookkeeping

You should maintain organised records from the first day of activity.

• Invoices issued and received.
• Business expenses with supporting invoices.
• Assets and their depreciation.
• Quarterly information needed for tax filings.

3. Additional formalities to keep in mind

Besides quarterly filings, many autonomos also have annual or informative tax obligations.

• Modelo 100 for annual income tax.
• Modelo 390 for the annual VAT summary, if applicable.
• Modelo 347 when transactions with a client or supplier exceed the reporting threshold.

Social Security adjustments

Since 2023, autonomo contributions are aligned with net income. You should regularly review your expected income and update your contribution base when needed.

4. Meeting formalities to extend tarifa plana

To extend the autonomo tarifa plana for an additional year, the following requirements must be met.

• Net income below the minimum wage (SMI): annual net income must be below the current SMI.
• Extension request: the extension is not automatic and must be requested before the first 12-month period of tarifa plana ends.
• The request is made through Social Security's Electronic Office, accompanied by a declaration stating that expected net income will be below the SMI.
• Compliance with tax and Social Security obligations: you must not have outstanding debts with the Tax Agency or Social Security to qualify for the extension.

Practical tips for your first year

• Search for other grants. Many regional governments and chambers offer additional help or grants to cover Social Security costs.
• Claim all deductions. Maximise deductible expenses, including office supplies, phone bills and business-related travel when properly justified.
• Hire a professional accountant. Navigating taxes and obligations can be complex, and professional review helps ensure compliance and identify savings opportunities.
• Plan for tax bills. Set aside at least 20% of your income for taxes to avoid cash-flow problems.

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