A self-employed worker is a natural person who carries out a professional activity on his own account without having to be subject to a contractual relationship, although he sometimes uses the paid service of other people. This professional activity can be carried out in an establishment or from home, known as teleworking. Like any company, a self-employed person also has expenses that can be deductible on self-employed invoices.
They are Difficult to Determine, but What Are the Main Deductible Expenses for the Self-Employed?
- Depreciation,the amount of impairment of investments related to the activity. They are calculated according to what is stipulated in the corporate tax.
- Financial expenses such as loan and credit expenses,surcharges for deferrals of payment of debts or interest for late payment to the Treasury. Derivatives of own capital will not be included.
- Input VAT will only be deductible when no quarterly VAT returns are filed and you are not entitled to deduct the fees.
- Tax-deductible taxes, such as
real estate tax
or economic activities tax, in addition to other taxes and surcharges.
- The services of independent professionals,such as lawyers, notaries, auditors or commercial agents.
- Repairs and maintenance, suchas maintenance costs and adaptations of material goods.
- Leases,fees and technical assistance.
- Purchases of goods,materials, raw materials or office supplies.
What Are the Requirements for a Expense to Be Deductible?
The Treasury establishes the following criteria to determine the deductible expenses of the self-employed:
- Linked to the economic and labor activity of the self-employed.
- Correctly justified by invoice or receipt.
- Accounting recorded in the book of expenses and investments of the self-employed.
If You Work from Home, What Deductions Are Included in a Freelancer’s Invoice Model?
In case the house is for rent,only the proportional part of the dwelling dedicated to the development of the professional activity will be deductible.
In addition, there is also the deduction of expenses for community and local taxes or the urban waste collection service, also partly proportional. The expense of the necessary purchases in materials with which the activity is carried out is added.
If the house is owned,community expenses, mortgage interest, home insurance, amortization of the property, local taxes and the purchase of material can be deducted, all in part proportional.
Electricity and water costs will only be deductible if you have an independent meter with which you can differentiate consumption.
Other Deductible Expenses of the Self-Employed
- Technology, which includes the purchase of computer equipment for the development of the activity.
- The expense on the necessary transport related to the activity.
- The expenses derived from the necessary training such as courses or master’s degrees.
- Spending for freelancers such as lawyers or advisors.
- Security quotas both our own and those of workers in our charge.
How to Reflect Those Deductions on Self-Employed Bills?
The self-employed, like any company, must issue an invoice to the client after performing the work.
For this invoice to be deductible, it must contain the following elements,common in any invoice model for freelancers:
- The number and series of the invoice.
- The date on which it was issued.
- Name and surname or corporate name, both of the company that performs the work and of the company that remunerates it.
- The tax identification number.
- The address, both of the one who issues the invoice and of the one who receives it.
- Clear description of the operations carried out.
- The VAT tax rate and the percentage of income tax withholding.
- The tax amount that must be recorded separately.
- The total amount to be paid.
- The date on which the documented operations are carried out or on which they have been paid in advance.
To make this job easier for you, you can use a freelance invoice template that can be used freely.
What VAT can I deduct as a freelancer?
Only VAT that affects that expense that is closely related to your professional activity as a self-employed person may be deducted and, if you work from home, this will be proportional to the amount of property that is used.
Now, what expenses are deductible in VAT?
- Expenses of goods that are consumed or depleted, such as office supplies.
- The cost of renting a premises to develop the activity.
- The expense derived from the services of independent professionals, such as lawyers or consultants.
- The fee for some taxes, such as garbage collection.
- The acquisition of goods, such as computer equipment.
The work of the
Spanish self-employed, sometimes,
is highly complicated to manage and perform, so any help is well received.
It is advisable to know the deductible expenses of the self-employed so that this management is more bearable.