Escrivá's third proposal for the self-employed: lower contributions for those with lower incomes

The Spanish government and associations for the self-employed continue negotiating the reform of the tax new system based on "real income"

2 min
The Minister of Social Security, José Luis Escrivá, during yesterday's presentation of the advance enrollment data.

MADRIDThe Ministry of Inclusion and Social Security has tabled a proposal for the new system of tax contributions by the self-employed, calculated using "real income". The ministry has made changes in terms of the contributions to be paid by self-employed workers with less income, as well as the bands into which they would be divided according to their income.

In Monday's proposal, Escrivá divides the group into 12 bands. He had previously eliminated two, going from 13 to 11 bands, and has now recovered one. He has also modified the Social Security contributions of the lowest bands, that is, self-employed workers earning less at the end of the month. The proposal is for a reduction in the minimum quota (paid by self-employed earning under €700 a month) from €214 per month incorporated in the last draft to €202 per month. The quotas have also been lowered for those earning under €1,500. For example, the self-employed earning between €1,126 and €1,300 per month will now pay €290.

As for the upper bands, i.e., where those workers who generate the most income at the end of the month are located, a new bracket is introduced. Thus, the self-employed with incomes between €3,620 and €4,050 per month would pay about €1,123 per month. "The points of confluence that have been expressed in previous meetings have been collected," explain sources from the Ministry of Social Security, who reiterate that the figures are being tweaked after every meeting.

In addition, the Ministry has once again modified the concept of net yields, one of the main obstacles in the negotiations. At the last meeting, Escrivá already raised the possibility that workers could deduct more expenses when calculating these yields. Now he has opened the door to the possibility that self-employed individuals can deduct up to 7% for expenses, while corporate self-employed individuals will be able to deduct 3% of their income. The Social Security would also allow deducting amortisations and "some common expenses", according to Ministry sources, although it is still necessary to finalise with self-employed workers' organisations what these expenses will be.

Whereas until now Spanish self-employed workers pay a fixed Social Security fee, the reform aims to turn this fee into a reflection of earnings. Hence, it is essential to determine what "real income" is. Monday's proposal, however, continues to be rejected by the Association of Self-Employed Workers (ATA), linked to the main business associations, while UPTA and UATAE, as well as Unions CCOO and UGT, consider it is "positive", according to sources in the social dialogue