Monday, November 15, 2010

Autonomos retain their expenses allowances

I spotted this news article in the Spanish press:

In essence the message is all in the title and the article doesn't add that much: the government keeps the 5% deduction for small and medium-sized enterprises (SMEs) and autonomos (self-employed) for 2011. This refers to a rule that can save autonomos money if they do their quarterly "modelos" correctly i.e. return a simplified "objective" declaration of their business profits rather than the full version. This allows them to report a taxable profit equal to income minus allowable expenses minus a further 5% of net income as an additional expense allowance. The idea is that the small business will have expenses which they cannot easily claim because of a lack of receipts or justification and this allowance makes up for it.

In a sense it is more than necessary because otherwise the system of what is and what is not deductible in terms of business expenses is quite harsh particularly when compared to the UK. There is a full guide on our website (autonomo expenses guide) but as examples :

- if a self employed businessman flies to London on business the flight can only be claimed as an expense if it is demonstrably 100% business-related. If the spouse travels or there is any day spent away from business then the whole cost of the trip is disallowed. The assumption is that the trip has been at least in part for pleasure.

- it is routine in the UK to claim for business lunches and entertaining but practically verboten in Spain

Reading the article, the authorities are making it sound like retention of the 5% deduction is a temporary measure because of the crisis. It could be removed when (if) things pick up for the Spanish small business sector. With Spanish GDP growth coming in at an invisible 0% for Q3 it looks like business needs all the help it can get.


  1. Hi,

    I have been seriously impressed by the comprehensive information provided by Advoco which is helping me to decide whether to go 'Autonomo' or not. However, in this brilliant information I find that I am confused by the apparant conflict between the two statements below. As a teacher, conference speaker and designer of educational projects I would anticipate entertaining other teachers, educational specialists etc. and could do with knowing whether I can claim these costs or not against any tax obligations? Can you clear up this question?



    - it is routine in the UK to claim for business lunches and entertaining but practically verboten in Spain

    > Entertaining

    Generally business meals where clients or other business contacts are present would be allowable but with a proper invoice being required for an IVA claim.

  2. Yes there is a contradiction there. It would be impossible to claim without an invoice in your name. It would be very difficult to claim in any case as the assumption would be that the lunch was for private gratification rather than business purposes.


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