New Spanish Law for Contractors and Freelancers
Wednesday, April 18, 2018 @ 8:48 AM
As we announced in our last article, the New Spanish Law reforming Self Employed conditions came into force on the 1st of January 2018. These are some of the new measures that bring more clarity and benefit to the freelance worker:
1. VAT Deductible expenses for self-employed people working from home.
Contractors working from home can deduct a percentage of the total home surface used for business. This must be negotiated in advance with the tax office.
2. Utilities and other property-related deductible expenses.
Part of their utilities are deductible such as; council tax, property management fees, house insurance, rent, electricity, gas, water, telephone and internet bills. Utility Bills can be deducted applying 30% to the total house area used for business.
- E.G. A freelancer working from home has a house electricity bill per amount of €100 plus €21 VAT; as this uses only the 20% of the place for professional activities the VAT amount this can deduct is the following: 21 x 20% x 30% = €1,26 on VAT
3. Accommodation and meals allowances related to business.
Food, meals and accommodation which take place during the development of professional activities will be exempt from income tax with the limited amounts detailed on the chart below:
| |
Overnight stay |
Not overnight stay |
| Spain |
53,34 Euros per day |
26,67 Euros per day |
| Abroad |
91,35 Euros per day |
48,08 Euros per day |
How can you deduct these expenses:
- Expenses related to working days and linked to professional activities
- Expenses being paid with debit or credit card or through a bank transfer
- Expenses with a proof of payment document that indicates date, intention and verified payment
- Expenses related to restaurants and catering establishments. Petrol stations or groceries will not be deductible.
4. Other deductible expenses.
Health insurance premium – which covers the insured; wife or husband and children under 25. Maximum deduction limit will be 500 Euros per person and 1,500 Euros per person for those with a disability.
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Eva de Francisco
Project Manager
For and on behalf of:
Del Canto Chambers
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