When are self-employed individuals required to submit the Income Tax Return?

Self-employed individuals often complain that the tax pressure they face is too high.

One of the taxes that most affects self-employed workers is the personal income tax. But… are they always required to submit the income tax return? When and how?

Let’s see everything.

What is the income tax return for self-employed individuals?

The income tax return is part of the Personal Income Tax (IRPF) and it includes all the income that natural persons, including self-employed individuals, have obtained during a fiscal year. It breaks down income, expenses and investments for the calendar year.

All data related to the income of the taxpayer is extracted from the personal income tax return, especially if they are self-employed professionals.

With this declaration, the tax situation is regularized and the Tax Agency is informed of the profits obtained, in a detailed and broken-down manner, by calculating the difference between earnings and expenses.

To calculate income, both income from work and income obtained from other sources, such as capital gains, are taken into account.

Regarding the expenses presented in the declaration, these may also include any capital losses that may arise from the sale of goods or real estate.

What is the purpose of the income tax return?

The purpose of the Income Tax Return is to settle the tax and inform the Tax Agency of the income that has been generated during the corresponding fiscal year.

The information included in this return is used by the Tax Agency to calculate the amount that the self-employed person has to pay for personal income tax. This is calculated based on the profits obtained, and to know them, it is essential to prepare and document the declaration correctly.

Self-employed individuals have a somewhat different situation as they sometimes apply withholdings on invoices. Thus, they advance the amount of money they have to pay for personal income tax in each invoice or quarterly.

When the Tax Agency calculates the personal income tax, the self-employed individual must pay if they have advanced less money or request a refund when the amounts advanced are higher than the final amount.

Who is required to file the Income Tax Return?

Until the entry into force of the contributions for self-employed individuals based on income, there were limits to declare based on what had been earned.

However, currently, all self-employed workers who have been registered with the RETA at some point in 2023 will have to file a mandatory income tax return in 2024.

Therefore, if you are self-employed, you will have to submit the Income Tax Return.

Deadlines for submitting the income tax return for self-employed individuals

Like the rest of the obligations related to the Tax Agency, there are deadlines for submitting the Income Tax Return.

This year 2024, the 2023 financial year is settled and the filing period opens from April 3. From that day, the document can be filled out and submitted.

As for the deadline, there are two different ones. On June 26, the period ends for those who have chosen payment by direct debit and on July 1, because June 30 is a Sunday, it ends for those who have chosen another system.

Forms of presentation of the Self-Employed Income Declaration

Self-employed individuals have three ways to file the Income Tax Return:

Online. Via Internet. It is the most comfortable and commonly used method in recent years.
By telephone. Questions can be consulted with a specialized advisor.
In person. By going to an office with an appointment and all the necessary documentation.

It is important to understand that, although the declaration is submitted with the help of the Tax Agency, both by phone and in person, they are exempt from liability. This means that any mistake is yours and you can be penalized for it.

Another option is to have tax and fiscal advisors who can advise you, prepare and submit the Income Tax Return and the rest of the taxes related to self-employed individuals. This way, you can be sure that everything is correct and avoid any surprises. The Personal Income Tax is the main tax applied to self-employed workers. It is filed annually although they advance a certain amount in invoices or quarterly. When the declaration is submitted, the result can be either to pay or to be refunded, depending on what must be paid and what has been advanced. There is a deadline established each year and three ways to file it: online, by phone, or in person.

Further information

This article is part of our service Business consulting. Visit this section where you will find all the useful information on this topic, including a complete guide on How to start a business in Spain as a foreigner.

Solve your doubts

✅ Our staff speaks perfectly Spanish, Valencian, English and German with what will be able to communicate with us in your own language and thus clearly resolve your queries.

📍 Denia – Plaza del Convento, 6 – Mezzanine floor door B
📍 Valencia – Calle Creu Roja, 1 – Block 6, Floor 1, door 10 (* only by appointment)

✉📞 Contact: info@firmalex.com – Tel. +34 966 421 416 – Whatsapp +34 622 497 615