Accounting Obligations for Freelance Workers in Spain

A lot of freelance professional new to Spain are unsure of their ongoing accounting obligations and can often get waylaid by the unsound advice of many so-called advisers. Indeed, it is very common for many of them to think that they only need to file their own taxes and pay their social security neglecting the more formal requirement to keep a correct record of their activity as a freelance worker. The following is a brief summary of the accounting requirements for freelance consultants in Spain.

Besides the ongoing tax and social security obligations, a self-employed worker must also keep the following books up to date and ready in case of an inspection:

1) Income Ledger: this should include the invoices issued by you. These should be chronologically ordered and numbered and include the name and tax number of the client and the amount of the operation with a breakdown of the applicable tax base, VAT, withholding tax and the net amount of the invoice.

2) Expense Ledger: this should include the invoices received by you, chronologically ordered and positioned in accordance with the type of expense. For example, a telephone bill should be place in the section marked Supplies. You must also include a breakdown of the applicable tax base, VAT and the total amount.

3) Capital Goods Ledger: this should reflect the cost of the goods that are going to remain in your business for more than one fiscal year (e.g. furniture, machinery, computers etc.) as well as the annual depreciation installments in accordance with legal stipulations. For example, if you purchase a computer for 1000 euros plus VAT, the amount of this total that should be deducted as an expense in the fiscal year is 260 euros as the law provides for an annual depreciation of 26% of the tax base for this type of good.

The author provides a service helping foreign nationals to set-up businesses in Spain and to get the appropriate legal, business and accounting assistance they require.