Life In Spain

This year, 2023, sees new social security contributions, a tax to top up pension funds, and a reduction in withholding rates for artists - the year 2023 will bring many developments for all self-employed people in Spain.

New social security contributions

From 2023, Spain's self-employed will pay monthly social security contributions based on their income instead of a fixed rate. Previously, freelancers had to pay a minimum contribution base of €294 per month after being registered as self-employed for two years, regardless of their earned amount.

Instead of a fixed rate of €294, the contribution will gradually decrease to €200 per month for low earners and progressively increase to €590 per month for high earners. Therefore, the social security contributions of some self-employed people will decrease. However, they will increase for those earning more than € 1,700 per month.

New tax for all workers

From 2023, all workers in Spain, whether self-employed or salaried, will have to pay an additional tax to replenish the country's pension fund. The trade unions estimate that the average monthly payment for the self-employed will be around €5.

No social security tax for newly self-employed workers in Madrid

In September 2022, the Madrid regional government announced that newly self-employed people in Madrid would have their social security contributions for the first year of self-employment in the region paid by the local government from 2023.

If monthly earnings in the second year are below the minimum wage (€1,166 gross per month), the regional government will also pay social security contributions. Hence, newly self-employed people in Madrid can save hundreds or possibly even several thousand euros in their few years working.

The threshold for tax returns changes

In 2023, self-employed taxpayers whose gross income does not exceed €15,000 per year will no longer have to file their annual tax return for 2022.

This means that in April when taxes declarations must be filed, those who have income from multiple sources will not have to file a return if the total of all income does not exceed €15,000. Previously, the limit was €14,000.

Advantages for self-employed mothers

Self-employed women with children under the age of 3 receive a benefit of €100 per month until the child's third birthday.

To be eligible for this benefit, they must either receive an unemployment benefit or allowance or register with the social security system at the time of the child's birth. Women who register later and have already paid contributions for at least 30 days are also eligible.

Reduction in retention rates

The withholding tax rate or IRPF for artists with the lowest income will be reduced to 7%. Previously, it was only 7% in the first years of self-employment, after which it increased to 15%.

Changes for unpaid and late invoices

As a freelancer, it is unfortunately very likely that you have been in a situation where you have had unpaid or late invoices and still had to pay tax on them without actually receiving the money. You then only had a limited amount of time to amend your invoice to reflect that it was unpaid.

This situation will become easier in 2023 as the time limit to amend your invoice will be extended from 3 to 6 months. The methods for claiming payments have also been made more flexible, and the minimum amount of the tax base that reduced from €300 to €50.
 

When deciding to move to Spain, many people choose their location because they have enjoyed wonderful holidays in the country. Popular tourist resorts like Marbella, Sitges, Benidorm and Lloret de Mar are also prevalent areas for relocating. While only some of those who move to Spain choose resorts where they previously holidayed, many do. 

But as I discovered, holidaying in a resort and living there is different. In my 30-odd years of resort living in Spain on various coasts, I have gained enough experience to give those considering moving to a resort after holidaying in the town a fair idea of what to expect during their daily lives when they move. 

Work

Obviously, one of the most enjoyable things about being on holiday is you do not have to get up to work. However, when you live in the resort, you will have to earn a living if you are of working age and do not have income. 

In a resort, work tends to be seasonal, with many businesses closing in the winter and those that remain open having few clients. Because of the seasonal contrast in takings, summer job hours are often extremely long, and bosses expect you to work overtime during the busy months. 

Also, the months with the heaviest workload have the highest temperatures. It's a time of the year when most of us would rather lie on a beach or be in a relaxed shady spot, not sweating in a restaurant kitchen or, like me, sitting in a traffic jam when I am trying to get from one client to the next in my job working for a real estate agency in Javea.

Most jobs available in resorts involve the hospitality trade. Hotel, restaurant, and even shop work can be very demanding in Spain, with low pay.

Traffic

When holidaying, you likely will only be using a car if you decide to hire a vehicle because your holiday accommodation is out of town. When staying in a hotel near the beach, you will not miss having the use of a car. However, when you move to a resort, even if you live in the centre of town and everything is available within walking distance, you will probably, at some point, decide you do need transport.

The larger and cheaper supermarkets tend to be located on the outskirts of towns. Public transport in Spain is excellent in the cities, but buses often only cover the town centres and main streets in smaller towns. So to reach the outskirts, you must have use of a car or take a taxi.

Parking in a resort in summer is nigh on impossible, so expect to park on the outskirts and walk in or rent or buy private parking if your building does not have parking.

Even short journeys can take three times longer in the summer compared to off-season - not something you need when you are on a 12-hour split shift in the middle of August and trying to get the household shopping done within the short afternoon break.

Tourists 

Tourists like other tourists! When you are a tourist, it's great to meet others who are also on holiday. With today's technology, it is easy to stay in touch after the holiday, and tourists will often maintain contact via social media and other means after the holiday ends. However, when you live in a resort, it must be said, tourists can be tiresome! 

Tourists have all the time in the world. They often don't appreciate that others must work and keep us waiting in queues behind them while they chat, take time searching for their money, etc. It can be frustrating.

Even though Spain is nowhere near as cheap as it was 20 years ago for alcohol and cigarettes, it is still more affordable than the UK, and this tends to attract a particular type of tourism in some resorts whose main holiday goal is to overindulge, which often results in antisocial behaviour. 

Due to the influx of summer tourists, noise levels can be excessive if you need near nightlife or the beach. 

However, having said this, living in a resort on the Mediterranean coast of Spain is fabulous! The benefits (which I'll cover in my next post!) hugely outweigh the cons.

The glorious sunshine, sandy beaches, wide variety of activities, outdoor lifestyle, and the mild winters are not something I am thinking about giving up any time soon.