The regularisation of self employed contributions in income tax in Spain is creating uncertainty among many taxpayers following the new contribution system based on real income.
What is contributions regularisation?
The regularisation of self-employed contributions is the process by which the Spanish Social Security adjusts the contributions of self-employed workers based on their actual income, in accordance with the new system implemented in Spain.
Under this system, the contributions paid during the year are provisional and are later reviewed once the final income of the self-employed individual is known, which may result in either additional payments or refunds.
Do you need to amend the 2023 tax return?
This year, many self-employed workers are receiving the regularisation of their contributions under the new system of contributions based on real income, introduced by the Spanish Social Security.
This review may result in an additional charge or a refund of contributions relating to previous years, such as 2023.
The most common question:
“Do I need to file a supplementary Income Tax Return for 2023 to include this adjustment?”
The answer is NO.
How to declare the adjustmen?
The Spanish Tax Authority (Dirección General de Tributos, rulings V2518-22 and V0874-25) has confirmed that these adjustments must be recorded in the tax year in which the regularisation or payment takes place, not retroactively.
- If the Social Security charges an additional amount in 2025, that payment will be treated as a deductible expense in the 2025 Income Tax Return.
- If a refund is issued, it will be declared as income in the same year.
Important:
The regularisation of self employed contributions in income tax in Spain is not applied retroactively and must be declared in the year it occurs.
Conclusion: allocation in the correct tax year.
In summary, it is not necessary to amend the 2023 tax return. The regularisation will be allocated to the tax year in which the adjustment takes place, ensuring the correct application of tax criteria.
This approach provides legal certainty and helps avoid errors in the filing of previous tax returns.
ÁLVARO MORALES SOUSA
PARTNER – LAWYER
CUSTOM REPRESENTATIVE
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