Bookkeeping for Self-Employed Foreigners in Spain

Registering as autónomo takes an afternoon. What follows is permanent: four filing periods a year, each with at least two returns, statutory registers that must be kept up to date, and an annual summary in January. None of it is intellectually difficult. All of it is unforgiving about dates, and almost none of the official guidance is available in English.

The freelancers who come to us after a bad first year tend to tell the same story. They filed the VAT return but not the income tax instalment, because nobody mentioned it. Or they recorded what reached their bank account instead of what they invoiced. Or they used a local gestoría that filed on time and never once explained a figure.

The returns, in plain terms

• Form 130: an instalment of your income tax, broadly 20 % of the profit for the year to date, less what you paid in earlier quarters.
• Form 303: the VAT you charged less the VAT you paid on business costs. Filed even when the result is nil.
• Form 390: the annual VAT summary, filed in January.
• Forms 111 and 115: only if you pay staff or other professionals, or rent business premises.
• Form 349: only if you invoice businesses elsewhere in the European Union.

Deadlines fall in the first twenty days of April, July and October, and during January for the last quarter.

The fee does not depend on how much you earn. It depends on how many invoices there are to record, because that is what takes the time.

The fee covers the quarterly and annual returns listed above and the statutory registers. It does not cover the annual income tax return, payroll, earlier years that need putting right, or answering a tax office enquiry: those are quoted separately, in advance. The full list is on our pricing page.

This service is built for individuals who sell services: consultants, developers, designers, translators, teachers, therapists, coaches. It works especially well when clients are abroad and invoices are in other currencies, because that is the part most local advisers handle least well.

It is not for companies, which need corporate tax returns and annual accounts, nor for businesses that sell physical goods with stock. If you are taxed under the módulos regime, tell us first: it needs a look before we take it on.

If you work through a company of your own in the United States, read bookkeeping for US LLC owners instead. If you are not yet registered, start with registering as self-employed.

The first year is where most of the damage is done, because nobody tells a new arrival what the sequence looks like. This is it, for someone who registers on 1 February.

• February and March. You issue your first invoices. Costs start to accumulate: software, a laptop, the social security contribution. Nothing is filed yet, but everything has to be kept.
• 1 to 20 April. First returns: form 130 on the profit from February and March, form 303 for the same months. Even if you invoiced nothing, both are due.
• 1 to 20 July. Second quarter. Form 130 now covers February to June as a whole and deducts what you paid in April.
• 1 to 20 October. Third quarter, with the summer usually showing in the figures.
• January. Fourth quarter returns by the 30th, the annual VAT summary, and the informative returns if you withheld tax from anyone.
• April to June of the following year. Your first Spanish income tax return, where the four instalments are credited and the real tax for the year is calculated.

A surprise for many: the annual return often produces a further payment, because 20 % is only an estimate and Spanish marginal rates rise quickly above a modest income. We give you an estimate of that final figure during the year, so it is not discovered in June.

• Recording bank receipts instead of invoices. Income is what you invoiced in the period, not what was paid. The two diverge the moment a client pays late or in another currency.
• No form 130 because "my clients are abroad". It is precisely because foreign clients do not withhold that the instalment is due.
• Invoices with gaps or duplicated numbers. Usually from using two tools, or editing a template by hand.
• Costs without a proper invoice. Card statements and till receipts rarely qualify. Foreign suppliers will issue an invoice with your details if asked.
• Private and business money in one account. Legal, but it turns every review into an argument about each line.
• Ignoring the reverse charge. Subscriptions from abroad arrive without VAT and still have to be declared.
• Social security base left at the minimum for years while income grew. The contribution is regularised against real income, and the bill arrives all at once.

At the start: your tax registration (form 036 or the census certificate), your social security registration, the returns filed so far this year if any, and your invoices and costs for the year to date.

Every month or quarter: the invoices you issued, the invoices you received, and the statement of the account you use for the business. If you invoice from our own page, the first of those is already with us.

Once a year: confirmation of anything that changes the picture. A new home office, a client who started withholding, staff, a move to another region, a property bought or let.

Becoming tax resident in Spain means Spain taxes your worldwide income. It does not always mean your country of origin stops being interested. Citizens of the United States continue to file there regardless of where they live. Others may remain resident at home for part of the year of the move, or keep rental income, dividends or a pension there.

Three things follow for the bookkeeping. First, the Spanish figures have to be usable by whoever prepares the other return: clear dates, euro amounts with their exchange rates, and proof of Spanish tax paid. Second, accounts and investments left abroad may need reporting in Spain on form 720. Third, whether the special regime for new arrivals is available has to be decided in the first six months. That is advisory work, described under Beckham law and tax residency, and it is best settled before the first quarter is filed.