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Practical manual for Income Tax 2023.

4. Expenses of the owner of the activity

The following concepts are included in this category, which are differentiated in the IRPF declaration:

a. Social security or contributions to alternative mutual funds of the activity holder

Are included:

  1. The contributions of the activity holder to the Special Regime for Self-Employed Workers (RETA) or,

    New 2023 : regularization of the RETA quotas paid in the previous year

    Please note that Royal Decree-Law 13/2022, of July 26, which establishes a new contribution system for self-employed workers and improves protection for cessation of activity ( BOE of July 27), has modified article 308 of the consolidated text of the General Social Security Law, approved by Royal Legislative Decree 8/2015, of October 30 ( BOE of October 31).

    Royal Decree-Law 13/2022, of July 26, which establishes a new contribution system for self-employed workers and improves protection for cessation of activity ( BOE of July 27), has modified article 308 of the consolidated text of the General Social Security Law, approved by Royal Legislative Decree 8/2015, of October 30 ( BOE of October 31).

    As a result of this modification, as of January 1, 2023, all self-employed or freelance workers included in this special regime will contribute based on the annual income obtained in the development of their economic, business or professional activities, having to choose the monthly contribution base that corresponds to their forecast of annual net income, within the general table established in the respective General State Budget Law and limited by a minimum contribution base in each of its sections and by a maximum base in each section for each year, although with the possibility, when they foresee that their income will be lower than the interprofessional minimum wage on an annual basis, to choose a contribution base within a reduced table.

    The chosen bases will be provisional until they are regularised based on the annual income obtained and reported by the tax authorities from the following year for each self-employed worker.

    Based on the above, the amounts calculated in the previous year will be considered as legally due amounts, although provisional, which is why it will not be appropriate to submit a correction of the self-assessment or a supplementary declaration regarding the declaration made in said year.

    If as a result of the regularization of the RETA quotas carried out in the following year, based on the actual income obtained, an additional amount results in being paid or returned as RETA quotas, said amount will have the following tax treatment in the IRPF :

    • If an additional amount is to be paid by the taxpayer in the following year, said additional payment must be treated as higher deductible expense for Social Security contributions in that following year.

    • If, on the other hand, the result is an amount to be returned to the taxpayer, it will be treated as less deductible expense for contributions paid to Social Security in that following fiscal year , and if the amount exceeds the contributions paid to Social Security, the excess must be reflected as a higher income in that fiscal year.

    Particular case: deductibility of the fee in the case of a taxpayer who obtains income from work (for example, as a company manager) and income from an economic activity

    In accordance with section 3 of the General Regulation on the registration of companies and affiliation, additions, deregistrations and changes in data of workers in Social Security, approved by Royal Decree 84/1996, of January 26. "When self-employed workers simultaneously carry out two or more activities that give rise to inclusion in this special regime, their registration in it will be unique , and they must declare all their activities in the registration application or, if multiple activities occur after it, through the corresponding variation of data (…)”.

    With this configuration of the contributions of the special regime of Social Security for Self-Employed Workers (RETA) -which establishes the obligation to declare pluriactivity in this regime-, to determine the incidence of the expense corresponding to these contributions in the IRPF of the taxpayer, it must be taken into account that these respond to the registration in this regime exercising more than one activity, so their deductibility in the IRPF may be carried out by the taxpayer either in the determination of the net income from work (for his remuneration as administrator of the company) or in the determination of the net income from the economic activity, since in each of these cases he has the obligation to contribute to the RETA , l or which allows the taxpayer to decide where to incorporate that single contribution .

    Covid-19: the exemption from the obligation to pay contributions in favor of self-employed workers who have received the extraordinary benefit for cessation of activity provided for in section two of article 26 of Royal Decree-Law 11/2022, of June 25, referred to in article 97 of Royal Decree-Law 20/2022, of December 27, on measures in response to the economic and social consequences of the War in Ukraine and in support of the reconstruction of the island of La Palma and other situations of vulnerability determines its lack of incidence in the IRPF , as it does not correspond to any of the assumptions of obtaining income established in article 6 of the IRPF Law , therefore not having the nature of full income or, correlatively, that of deductible expense for the determination of income.

  2. Where applicable, contributions made by the owner of the activity to Social Security Mutual Societies when they act as alternatives to the aforementioned special Social Security regime.

    Specialties in the Personal Income Tax of contributions to Mutual Insurance Societies Social of the entrepreneur or professional himself

    Regulations (Art. 30.2.1 Law IRPF )

    As a general rule, contributions to social security mutual funds of the entrepreneur or professional do not constitute a deductible expense for determining the net income of the activity, given that they may reduce the taxpayer's tax base in accordance with the requirements and limits established for this purpose.

    See Chapter 13 for reductions for contributions and contributions to social security systems .

    However, amounts paid under insurance contracts entered into with mutual insurance companies by professionals not included in the special Social Security regime for self-employed workers or freelancers are considered deductible expenses of the activity when, for the purposes of complying with the obligation provided for in the Fifteenth Additional Provision of Law 30/1995, of November 8, on the Regulation and Supervision of Private Insurance, they act as alternatives to the special Social Security regime, in the part that aims to cover contingencies attended to by said special regime, with the limit of the maximum quota for common contingencies that is established in each financial year.

    The fifteenth Additional Provision of Law 30/1995 has been repealed by Royal Legislative Decree 8/2015, of October 30, which approves the consolidated text of the General Law on Social Security, and integrated into the eighteenth Additional Provision of said consolidated text. Therefore, the reference made to the repealed provision shall be understood as being made to the corresponding provision of the consolidated text.

    Furthermore, for the purposes of the limit on the maximum contribution for common contingencies that is established in each financial year, it must be taken into account that, for 2023, article 122 of Law 31/2022, of December 23, on the General State Budget for the year 2023 and Order PCM /74/2023, of January 30, which develops the legal regulations for Social Security contributions, unemployment, protection for cessation of activity, Wage Guarantee Fund and vocational training for the year 2023 ( BOE of January 31), establish a maximum limit for the contribution base of 4,495.50 euros per month and set a maximum contribution rate for common contingencies of 28.30 percent. Therefore, the maximum fee for common contingencies in 2023 is 15,266.72 euros [0.283 x (4,495.50 x 12)]. 

    When contributions exceed this limit, the excess may be subject to a reduction in the taxable base of IRPF , although only in the part that is intended to cover the same contingencies as pension plans and with the limits and requirements indicated in Chapter 13 in the section corresponding to "Reductions for contributions and contributions to social security systems".

b. Maintenance expenses of the taxpayer himself incurred in the development of the economic activity

Regulations: Art. 30.2.5.c) Law Income Tax

Taxpayers may deduct maintenance expenses that meet the following requirements for determining the net income from economic activity in direct estimation:

  • That they are expenses of the taxpayer himself.

  • That are carried out in the development of economic activity. That is, they are specific to the activity.

    For these purposes, it should be noted that the fact that maintenance expenses correspond to a working day - regardless of the fact that in business or professional activities it cannot be generally spoken of as the existence of a work calendar - does not in itself imply that said expenses are considered to be expenses incurred in the development of an economic activity.

  • That they occur in catering and hospitality establishments.

  • That they are paid using any electronic means of payment.

  • That they do not exceed the quantitative limits established by regulation in article 9.A.3.a) of the Personal Income Tax Regulation for allowances and allowances for normal maintenance expenses of workers.

    The reference that the Personal Income Tax Law makes for the maintenance expenses of business owners or professionals to the regulatory regulation established for the allowances and allowances for normal maintenance expenses of workers contained in article 9 of the Personal Income Tax Regulation , is limited to the quantitative limits established for said maintenance expenses, without, consequently, said reference considering expenses other than maintenance expenses, such as lodging expenses, or other aspects regulated in article 9 regarding maintenance expenses other than their quantitative limits, given their different nature.

    In this sense, while allowances constitute allocations made by the employer to the employee who, by virtue of the organizational power available to the employer, must travel outside his or her workplace to carry out his or her work; The deductible expenses for the maintenance of the businessman or professional referred to in article 30.2.5 of the Tax Law are expenses incurred by the businessman or professional himself, in the development of his economic activity.

    These limits are:

    (*) It must be a municipality other than the taxpayer's usual place of work and the one that constitutes his residence..(Back)
    Information Spain Foreign
    Spending the night in a different municipality (*) 53.34 euros/day 91.35 euros/day
    Without spending the night in a different municipality 26.67 euros/day 48.08 euros/day

    Any excess over these amounts may not be deducted.

Note: The taxpayer must retain, for the maximum limitation period, providing when requested for this purpose, the supporting documents for the expenses to verify compliance with the requirements demanded by the law.