Social Security question for David

[Jool]

Bongtrees, this is the relevant info from DAvid

FROM DAVID SEARL

FOR JOOL,

Jool, thank you very much for revealing to me an embarrassing gap in my coverage of withholding tax, "retenciones". Everything I said in my earlier longer post about "autonomos" needing to submit bills with "retenciones" subtracted is correct, but it is incomplete, misleadingly incomplete.

Because there are two types of "autonomos". The "profesional" and the "empresarial".

A "professional" self-employed worker, such as myself, a writer, must bill with withholding tax, as described. A self-employed sales agent is also a professional. He bills his client for his commissions with retenciones. However, most self-employed workers are in fact "empresarial" autonomos, such as your tax consultant pointed out to you. This means they are running a business.

These "empresarial" autonomos include, for example, plumbers and carpenters. The idea is that they have expenses for materials, equipment and so forth, which they include on their "factura". So it would not be fair to have "retenciones" of 15 per cent withheld from a total bill that includes these expenses. Because these are expenses, not part of their real income.

This explains why people who have been working here for years have never heard of "retenciones". Because their activity does not require it, in contradiction to what I said in the other post.

When you first register with the Tax Agency as autonomo, you fill in Form 037, the "census" form. This form includes the reference number for your class of activity. If you still have your original registration, you can look up your number, which appears on your tax declaration and some other documents, too. It went with your original application for IAE, the "business licence", or Impuesto sobre Actividades Economicas, which still exists but is now charged at the rate of zero for small operators. This reference shows whether you are professional or empresarial.

As an additonal useful note, you can request the Tax Agency to send to you by post a list of all tax data they currently hold on your "witholding tax" situation. This lists your clients and shows what withholding tax they have paid into the Tax Agency in your name for the previous year. Very useful at tax time. You have to go in person, or have your electronic signature for Internet, or have your tax consultant do it for you.

thank you again, Jool, and thank your tax consultant, too

Best Wishes, David Searl

[Bongtrees]

Thanks Jool I must have missed that. Have had 4 gestors in past 10 years and none have ever mentioned this