In Spain, there is a lot of confusion about the possibility of issuing invoices without being registered as self-employed. Although it is legally possible to do so under certain conditions, it is crucial to understand the requirements, limits, and consequences to avoid legal problems with Hacienda and Social Security.
This article details everything you need to know about how to invoice without being self-employed, best practices, and alternatives like LLCs for those looking for more flexible and efficient options.
Is it possible to issue invoices without being self-employed?
The short answer is yes, you can issue invoices without being self-employed, but with specific conditions. According to Spanish regulations, anyone of working age can issue invoices. However, the Spanish Tax Agency and Social Security impose strict requirements for this practice to be legal, in order to ensure that those who carry out regular economic activities register as self-employed.
Requirements to invoice without being self-employed
If you are thinking of issuing invoices without being registered as self-employed, you must meet the following requirements (According to the Tax Agency):
Tax Agency Registration (Form 036 or 037): Register in the Tax Agency's census of economic activities before issuing any invoice. This procedure is different from registering with Social Security.
Sporadic activity: Invoices must correspond to one-off, non-recurring jobs. Habituality is a key criterion; if you carry out economic activities on an ongoing basis, you must register as self-employed.
Not exceeding the Interprofessional Minimum Wage (SMI): Although it is not an official requirement, invoicing less than €15,120 per year (the SMI in 2024) can serve as an argument in the event of potential penalties. Exceeding this figure could be considered regular activity.
Declare VAT and Personal Income Tax (IRPF): All invoices must include VAT (if applicable) and IRPF, and these taxes must be declared quarterly and annually, respectively.
How to invoice without being self-employed?
Register with the Tax Agency: Use Form 036 or Form 037 to register in the census of economic activities. This step allows you to legally issue invoices.
Create complete invoices: Include all mandatory details, such as your full name, NIF (tax ID), service description, amount, VAT and, if applicable, IRPF withholding (15%).
Declare taxes: Even if you are not self-employed, you are required to declare and settle the VAT quarterly (Form 303) and the personal income tax (IRPF) annually in your income tax return.
Deregister at the end of the activity: Once you have finished the one-off activity, you can deregister with the Tax Agency using the same form you used to register.
Differences Between Self-Employed and Non-Self-Employed
Freelance: Being self-employed implies registering with both the Tax Agency and Social Security to carry out economic activities on a regular basis. It is a status designed for those who work for themselves regularly and continuously. They pay a fee ranging from €230 to +€1000 MONTHLY.
Invoicing without being self-employed: This option is intended for people who perform one-off, non-regular jobs. It is legal as long as you register with the Tax Agency and meet certain requirements, such as declaring the corresponding taxes.
Cost Differences
As Self-Employed:
- Self-employed contribution: It is one of the main fixed costs, with a monthly minimum of €230 in 2024 (unless you benefit from the €80 flat rate for the first year)
- Accounting expenses: Although you can keep your books yourself, many choose to hire an accountant, which implies an additional cost; they will charge you a monthly fee and many an additional cost for tax filing.
Without Being Self-Employed:
- There is no fixed fee. You only pay the taxes derived from your invoices.
Comparative Example
Case 1 Self-Employed: Regular Worker Ana works as a freelance graphic designer, with recurring clients every month. She invoices about €2,000 monthly. In this case, being self-employed is the right option, since her activity is regular and well exceeds the SMI.
Case 2: Occasional Work Luis works as a full-time teacher, but a friend asks him to develop a website for €1,500. In this case, Luis can invoice without being self-employed, as long as he registers with the Tax Agency and declares the corresponding taxes.
Self-Employed vs Income Tax
Tax differences between a self-employed person and an individual who issues invoices without being self-employed.
| Aspect | Self-employed | Individual (non-self-employed) |
|---|---|---|
| personal income tax (IRPF) | Quarterly declaration (form 130) and annual | Annual declaration (form 100) |
| VAT | Quarterly declaration (form 303) | Quarterly declaration (form 303) |
| Deductible Expenses | Extensive | Very limited |
| Withholdings | Mandatory in certain activities | Do not apply |
| Social Security | Monthly fixed fee | Does not apply |
| Risk of penalty | Low if obligations are met | High if activity is recurring |
Basically, self-employed workers pay 21% VAT on all sales and purchases, personal income tax (IRPF) on all profit from 30 to 55%, withholdings and a monthly fee from €230 upwards. Non-self-employed workers in theory should pay VAT on sales but many do not do so, and income tax at the end of the year.
Maximum to invoice without being self-employed
There is no limit for invoicing without being self-employed. Although people often talk about the myth of invoicing without being self-employed up to 3000€, this has no legal basis and can lead to confusion.
The key lies in the habituality of the activity and in not exceeding the Annual Interprofessional Minimum Wage (SMI) , since occasional income below the SMI is less likely to be penalized. As of today it is€14,000 annually . About €1200 a monthgross If you have doubts about how much you can invoice without registering, we recommend reading our article.
From what amount of money do you have to declare? Penalties for invoicing without being self-employed.
Invoicing without being registered as self-employed can lead to significant penalties if legal requirements are not met. The main consequences include:
Financial fines
: Penalties can range between€300 and €3,000 , depending on the time and amounts invoiced without being registered., depending on the time and amounts billed without being registered.
Overdue installments with surcharges: Social Security can claim the corresponding self-employed contributions for the undeclared period, applying a 20% surcharge for delay.
Subsidy refund: If you have received benefits such as unemployment, you will be required to return them in full.
Forced registration in the RETA: The Spanish Tax Agency or Social Security can force you to register as self-employed if they consider your activity to be regular, along with the payment of overdue contributions.
Alternatives and Solutions for Invoicing Without Being Self-Employed
Conclusion on invoicing without being self-employed
With the massacre that the Tax Agency is carrying out against the self-employed in Spain, it is normal that you seriously consider whether to register as self-employed. So as an entrepreneur, self-employed person, and LLC owner, I will give you my opinion.
The Tax Agency has two ways to locate you during an inspection. Invoices and bank accounts. If you do not issue invoices to companies, that limit we mentioned increases significantly. If you also operate with foreign bank accounts, it will be very difficult for the tax agency to see if you are declaring taxes or if your activity is recurring or not.
If you are not self-employed or registered in economic activities, the Tax Agency does not have its eyes on you. Additionally, if your business is online, I seriously invite you to take a look at our blogs on US LLCs.
