Support to Entrepreneurs in Spain by Social Security Reductions

Law 14/2013 to Support Entrepreneurs and Internationalization outlines the reduction in Social Security contributions for workers engaged in multiple activities.

Main modifications

Contribution Applicable to Workers in the Special Scheme of Self-Employed or Independent Workers Engaging in Multiple Activities with Full-Time or Part-Time Work over 50%

• Workers who register for the first time in Social Security’s Special Scheme of Self-Employed or Independent Workers (RETA) and plan to participate in multiple activities from the effective date of the Law (September 29, 2013) can choose as their base contribution any percentage between 50% of the minimum base contribution established in the annual General State Budget Bill during the first 18 months and 75% during the following 18 months up to the maximum base contribution of RETA.
• Equally, workers engaged in multiple activities where the worker is employed part-time by another for the activity, as long as the workday is over 50%, can choose a RETA base contribution between 75% of the minimum annual base for the first 18 months and 85% during the following 18 months up to the maximum base contribution established by the Scheme.
• Implementation of this measure is incompatible with any other bonus or reduction established to promote self-employment.

Social Security Reductions for Self-Employed Workers Over 30 Years Old

• The Law eliminates the age limit to access these incentives (reductions and modifications) intended only for those under 30 years of age for men or under 35 years of age for women.
• Therefore, the novelty lies in the possibility of self-employed workers over 30 years old who initially registered with the RETA or had not registered within the immediate five years preceding the date of registration to apply the following reductions by the rate for common contingencies (resulting from applying the minimum contribution corresponding to the minimum contribution rate effective at all times, including temporary disability) for a maximum period of 18 months according to a scale:
  • 80% of the rate during the six months immediately following the date of registration
  • 50 % of the rate during the six months following the period indicated in letter (a)
  • 30 % of the rate during the six months following the period indicated in letter (b)
• Lastly, the legislation establishes that self-employed individuals who hire other workers remain excluded from this incentive and that self-employed workers who choose this option are ineligible for the Law’s bonuses and reductions.

Reductions and Bonuses in Social Security Contributions for Self-Employed Individuals with Disabilities

Considering the regulation of anticipated benefits for persons considered to have a disability equal to or greater than 33% who first register in the RETA, these benefits remain unchanged in duration (five years) considering the rate and calculation that apply to reductions and bonuses (contribution for common contingencies resulting from applying the minimum corresponding contribution rate in effect at all times, including IT).

Accordingly, the new regulation allows:

• An 80% reduction of the rate during the six months immediately following the date of registration (before 50% for five years). The reduction cannot apply to a disabled self-employed person who employs workers
• A bonus equal to an amount equal to 50% of the quota during the next 54 months (four and a half years).

Activities of Non-profit Clubs and Sports Organizations

The Law 14/2013 establishes that within four months after its approval the Spanish Government will conduct a study of the legal relationship. Where appropriate, the Spanish Government will also review the framework of Social Security’s application to the activities of non-profit clubs and sports organizations that may not be producing optimum benefits.

For more information on Social Security reductions for entrepreneurs in Spain,