THE SELF EMPLOYED WORK SYSTEM
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There has been a noticeable increase recently in the amount of
younger British people coming to this part of Spain, who wish to
work and legally register themselves as self employed.  This
system is called "autonomos" in Spanish. Whilst it is still the
practice for workers to be employed and paid "cash in hand"
during the busy summer season, it is not advisable on a long term
basis.  Everyone should pay tax somewhere, and failure to do so
renders the individual a "non-person" who has no rights or
security in the country where they have chosen to live.

By registering on the autonomos system, medical social security
cover is immediately available, and pensions benefits are secured
when one reaches retirement age for those eligible to claim (see
"Pensions" section below).   In Spain this is currently 65 years
for both men and women.

It is no longer necessary for anyone working here on a Contract
or through Autonomos to apply for a Residencia. If you so wish,
the Comiseria Police Station in Denia will provide you with a
Certificate of exemption from holding a Residencia card.  To
obtain this document, you will need your passport, one passport
photo, a signed Declaration that you are exempt from holding a
Residencia, and a completed application form showing your work
details, or those of your spouse/partner.  At the present time,
these application forms have not been prepared, and the existing
Residencia application form should be used.

Important: we have received advice from the Notary Office that
they will not accept these Certificates as proof that an
individual is a 

Resident, and therefore subject to different rules in respect of
Capital Gains Tax payments.  This will of course have a bearing
if, for example, you are selling a property.  There are three
courses of action you can take if you think this may affect you;
a) you can apply for a Residencia card anyway (bearing in mind
that these are still taking about a year to be processed) as the
Comiseria cannot refuse to process a card, even if it is no
longer necessary; b) you can apply to the Comiseria in Denia for
a Certificado de Residencia; c) you can apply to the Hacienda at
Denia for a Certificado de Residencia Fiscal.  Any of the above
three items will be sufficient to confirm your Resident status to
the Notary.

Registering on the System

If you wish to register yourself on Autonomos, there are certain
steps to be taken, as follows:

1.The first thing you should do is apply for a NIE/NIF number. 
This is an identification number and is used for paying taxes. 
You will need to present the completed application form & 2
photocopies to the Comiseria in Denia.  Accompanying the form
should be one passport photograph and either your passport or
certified copy of same.  The copy can either be certified by a
Notary Public or Solicitor, or you can take your passport and a
photocopy to your local Guardia Civil Police Station and ask them
to certify the copy.  The number takes about three weeks to be
processed, and you need to collect this from the Comiseria -
please note you will not be advised when this number is ready, so
it is up to you to check after this time.

2.You will need to apply for a Tax Licence for the work activity
to be followed.  This can be obtained from the SUMA Office in the
town where your work activity will be centred, or Javea
Ayuntamiento as appropriate.This Licence needs to be renewed
every year, and although you should receive a bill it is up to
you to collect from the Suma office or Javea Ayuntamiento, and
arrange payment if you have not arranged a direct debit for this
item.

3.You will need to complete and present an 037 form, which is
stamped by the Tax Office and confirms the method of payment of
your taxes.  There are two methods of paying tax;

a)	you make quarterly VAT and Income Tax Declarations on the
“direct estimations method”, which means you have to start double
entry system book-keeping, or hire the services of an accountant.
Alternatively;

b)	you pay a quarterly fixed income tax & VAT amount under
the "modulos" system.

Both systems have their advantages; a) is a good method if you
think your custom is going to fluctuate to a significant degree,
as income tax & VAT is only paid on your actual profit/earnings. 
Modulos payments do not take into consideration whether you have
had a good or bad month, as you pay the same fixed amount, even
if you have zero income. Also, under the modulos 

system, there is no need to keep accounts or prepare numbered VAT
invoices, etc. On the other hand, once your business is
established and turnover increases you may well benefit from
having a tax system whose payments were set at a basic level.

4.	In order to register within the Seguridad Social (Spanish
social security) system, you will need to complete and present a
registration document.  You will then be liable for fixed monthly
payments, which must be paid even if you have zero income. You
will receive a temporary card which shows your social security
number.  You should take this card to your local social security
clinic and register with a doctor.  This will instigate your
permanent health card.

There are various levels of social security payable, depending on
the amount of pension you wish to receive on retirement.  Most
people choose the minimum (currently 205,54 Euros) .At each level
you have the choice of paying an additional amount for IT
(temporary incapacity sickness) benefit in the unfortunate event
of your falling ill.  You can change the option to pay IT if you
wish, but this must be done prior to the 1st October of each year.
Those persons over the age of 50 have a slightly different
payment structure, and workers over the age of 65 do not have to
make any social security payments save for the optional IT
payments, although they can opt to continue paying if they wish.

Further information regarding the above may be obtained from the
Seguridad Social office in Denia.

Any spouse, partner or child is also entitled to medical cover.
An additional “beneficiary” form must be completed, and the
Marriage Certificate, Certificado de Convivencia or Birth
Certificate, as appropriate,  should be produced with the other
paperwork.

Working mothers with a child under 3 years of age can apply for
child benefit, by completing and presenting Form 140 "Deduccion
por Maternidad" to the Hacienda in Denia.

5.If your work activity will be carried out in an office/shop etc
where the public are allowed to enter, you will also need to make
an Opening Licence application.  This can be obtained from your
local Town Hall.

6.When your work activity is one that usually requires
qualification certificates (e.g.. electrician, plumber,
hairdresser), your original Certificates must be officially
translated into Spanish, and both sets forwarded to the Ministry
of Education & Science in Alicante or Madrid.  They will
homologate the Certificates, which must then be presented with
the rest of the work papers.

7.	If the activity is a bar or restaurant where food is
handled, it will be necessary to sit an examination at the local
Town Hall (in the form of a multi-part test), in order to obtain
the requisite card allowing you to handle food.  The Sanitas
Department in Denia will also have to be notified, and they will
carry out a stringent inspection of your establishment. 
Furthermore, a complete price list will have to be handed into
the Tourist Office in Alicante.

Pension Entitlement 

Once you are in the Autonomos system, you will be accruing an
entitlement to a Spanish pension.  

Within Europe, pensions are paid separately by each country, and
there are certain rules that apply here for pension provision. 
In respect of contributory pensions, The individual must have
been in Spain for the last 16 years, 10 of those years as a
resident, and two of these years must also be immediately prior
to retirement.  

The proportion of pension will depend upon the amount of years
worked in other European countries.  The minimum amount of time
the individual can have contributed is 15 years, and for this
they will have the right to 50% of the regulated base pension
amount.  Please note retirement is not automatic in Spain, and
you must declare your intention to retire at the Hacienda in
Denia.

Ceasing to Work

If you decide to cease self employment, it is important you
inform the relevant authorities and "sign off" the system, or
payments will continue to accrue in your name.

Should you require assistance with any of the above, HRS can
arrange the paperwork on your behalf for a fee of 150,00 Euros +
IVA. Please note we are unable to assist with book-keeping or the
inception and running  of SL companies.


(March 2003)