1. Deduct what you are already spending
The largest single recovery available to most self-employed people in Spain is not a scheme. It is asking for an invoice. A typical freelancer loses somewhere between ten and twenty per cent of their deductible costs by paying with a card, getting a till receipt and throwing it away, or by letting a supplier invoice a personal name without the tax number on it.
Three conditions have to hold at once: the cost is connected to the activity, there is a complete invoice in your name with your NIF on it, and it is entered in your registers. A till receipt fails the second test however genuine the expense was.
| Commonly missed | Worth per year on a mid-sized practice |
|---|---|
| Your own social security contributions | Several thousand euros of base, and they are deductible in full |
| Software subscriptions billed to a personal card | Hundreds, and each one needs the tax number adding in the supplier's billing settings, once |
| Professional insurance, association fees, training | Hundreds |
| The part of the home attributed to the activity | A proportion of utilities, provided the attributed proportion was declared on your census registration |
| Bank charges and financing costs of the activity | Small individually, constant across the year |
On a 30 % marginal position, 4,000 € of costs you were paying anyway but never invoiced properly is roughly 1,200 € of tax. No arrangement on this page beats that, and it requires nothing but a habit.
2. Depreciate properly
A computer, a camera, furniture, a fit-out: these are not deducted in the year of purchase. They are written off over their useful life under the official rates. The mistake we see is not aggressive depreciation, it is none at all: assets bought, treated as ordinary expense once, disallowed on review, and then never depreciated in the following years either. That is paying twice for one error.
Keep a register of capital assets from the beginning. It is a statutory register in any case, it takes minutes a year to maintain, and it is what makes the deduction survive a question.
3. Use the regime's own allowance
Simplified direct assessment allows a deduction for expenses that are hard to evidence, computed as a percentage of the net figure and subject to an annual cap. It applies automatically if you are in that regime, which is the point: people in the wrong regime never get it. Whether you are in the right one is the subject of direct assessment, simplified or modules.
4. Decide when, not whether
Timing is real and modest. If December is strong and January looks thin, bringing forward a purchase you were going to make anyway moves the deduction into the year where it is worth more. Deferring an invoice that can legitimately be issued in January does the same from the other direction.
Buying something you do not need in order to deduct it is spending a hundred euros to keep thirty. The tax saving is a fraction of the outlay, always. Timing applies to purchases already decided; it is not a reason to purchase.
5. Check the rate being withheld from you
Professional invoices carry withholding at 15 %, or 7 % in the year you start and the two that follow. If your effective rate is below the rate being withheld, you are lending money to the state for up to eighteen months. Conversely, if 70 % or more of your income arrives with withholding applied, a professional may not have to file the quarterly payment on account at all — and plenty of people file it for years without needing to.
6. The structural ones, which are not for everyone
- Contributions to a pension plan reduce the taxable base, but the individual annual limit is low and has been cut in recent years, so the effect is smaller than most people assume.
- Regional reliefs. Personal income tax has an autonomous component, and the reliefs attached to it differ substantially between regions. They are claimed, not applied automatically.
- The special regime for inbound workers, where you qualify. That is a different world with its own rules, described on the Beckham regime.
- Incorporating, in the narrow circumstances where it is right, for which see stay self-employed or set up a company.
What we will not do
Personal expenses through the business. Invoices between friends for services nobody performed. Mileage constructed after the fact. A car deducted in full when exclusive business use cannot be proved, which in practice almost nobody can. Household bills where no proportion of the home was ever attributed to the activity.
Two reasons, and the second matters more. These are the exact items a review looks at, so they carry a high probability of being found. And the signature on the return is yours: an adviser who suggested it bears nothing, while the taxpayer bears the tax, the interest, the penalty and the record.
The quarterly payment is not the tax
A point that causes needless alarm every April. The quarterly payment on account is an advance, computed cumulatively from 1 January, not a separate tax. Paying more than you needed to during the year does not lose you anything permanently; it is settled in the annual return. What it does lose you is the use of the money for up to eighteen months, which is why the withholding point above is worth checking rather than shrugging at. Equally, a small quarterly payment is not a saving: it is a bill arriving later, and the people who get into difficulty are the ones who spent it in the meantime.
What tips the balance on your self-employed work
Order beats cleverness, by a wide margin. The people who pay least among our clients are not the ones with arrangements; they are the ones whose costs are all invoiced correctly, whose assets are on a register, whose regime matches their activity and whose withholding is set at the right rate. That is four ordinary things done consistently, and together they typically move the annual bill by more than any single idea anybody will sell you.
If you want to know which of the four is leaking in your case, the honest way to find out is to look at a year of your actual figures. Tell us what you do through the contact form, and the fee for keeping it in order is on the pricing page.
Laura's return, before and after putting it in order
Laura is a self-employed translator in Valencia. She invoices 48,000 € a year, almost all to Spanish agencies, and last year declared 4,000 € of costs. She works from home in a room used only for that; pays by card for several software subscriptions, professional liability insurance and training; and two years ago bought a computer and monitor she never deducted. Asked why, she says what nearly everyone says: «I have no invoice for that» or «I thought it was not allowed».
What she declared: 48,000 € less 4,000 € is 44,000 €; in simplified direct assessment the allowance for hard-to-evidence expenses reaches its 2,000 € cap, leaving 42,000 € taxable. What had been left out: software, insurance, training and professional body fees, 1,800 € a year paid by card, where adding her NIF in each supplier's billing settings was enough to get proper invoices; a reasonable, defensible share of a phone and internet line used half personally, 600 €; household utilities for the room, which is 15 % of the floor area and declared as such on her census registration, of which the law allows 30 %: 2,400 × 15 % × 30 % = 108 €; and depreciation of the 2,400 € of equipment at up to 26 % a year for computers, 624 € this year.
That is 3,132 € more in costs. Net income falls to 40,868 €, the allowance stays capped at 2,000 €, and 38,868 € is taxed. At a marginal rate of roughly 37 %, Laura pays about 1,159 € less a year, inventing nothing, with every euro backed by an invoice in her name.
| Measure | Effect for Laura | Risk if done properly | Risk if overdone |
|---|---|---|---|
| Invoices for what she already pays | 1,800 € off the base, about 666 € of tax | None | Not applicable: the invoice exists or it does not |
| Business share of phone and internet | 600 €, about 222 € | Low | Claiming 100 % of the family line |
| Utilities for the room she works in | 108 €, about 40 € | Low, if the area was declared | Claiming without having declared it |
| Depreciating the equipment | 624 € this year and the next ones | None | Writing it all off in one year |
| Correcting the withholding rate | Cash flow, not tax | None | Not applicable |
| Buying in December «to deduct it» | For each 2,000 € spent, about 192 € in year one | Spending on what you do not need | Deducting personal purchases |
The laptop nobody needed
If Laura buys another 2,000 € laptop she does not need, this year she deducts only its depreciation: 2,000 × 26 % = 520 €. At 37 %, that is 192 € saved in the first year, and over its whole useful life at most about 740 €. She has spent 2,000 € to save 740. And if next year she expects to invoice more, the cost is better placed in the year her marginal rate will be higher: the right moment depends on both years, not on the calendar. On withholding, the stakes are concrete: were Laura in her first years and charging 15 % instead of 7 %, she would be advancing 3,840 € a year she would not see again until the annual return.
The car, the restaurant and the family phone
In income tax a car is deductible only if it is used exclusively for the activity; take the children to school in it and it is not, with narrow exceptions such as delivery vehicles or sales representatives. VAT is more flexible and presumes 50 % business use, which leads many to assume income tax does the same. It does not. Meals are deductible when taken in restaurants in the course of the activity, paid electronically and within the daily subsistence limits; a Saturday dinner with the family is not a business cost however much work is discussed. These are precisely the items reviews look at, because they recur, and when they are corrected the cost is lost and interest, and possibly a penalty, is added.
When to stop squeezing
There is a point beyond which hunting for deductions costs more than it saves: hours over small receipts, arguments over usage percentages, doubtful items that turn a clean return into one that has to be defended. Once every cost is invoiced, assets are depreciated, the regime fits and withholding is right, little is left to gain, and the useful question becomes whether the way you work needs a different structure. If you have just registered, check who qualifies for the flat-rate contribution before assuming anything, and send us a real year of figures through the self-employed form.