7 tax updates for freelancers in Spain in 2025

2025 will be a year of adjustments and key tax changes for freelancers and SMEs in Spain. The most relevant changes include:

• Contributions based on actual income and update of brackets.
• Reduction of the minimum fee for freelancers with low income.
• Obligation to issue electronic invoices.
• Continuation of the module system, albeit with less prominence.
• Gradual reduction of Corporate Tax for SMEs and micro-SMEs.
• Implementation of the MEI to ensure the sustainability of pensions.

1. Contribution system based on actual income

Since 2023, freelancers contribute according to their net earnings. In 2025, this system continues with 15 income brackets, where contributions range from around €200 per month for the lowest brackets up to a maximum of €598 for the highest. Source: El País.

💡 Practical tip: Check your income bracket and adjust your contribution base to avoid future adjustments.

2. Lower minimum fee for freelancers with low income

Freelancers with monthly income below €1,700 will see an annual reduction in their fee ranging from €80 to €428. Conversely, freelancers with income above €1,700 will see an annual increase ranging from €272 to €970, depending on the bracket. So make sure you are in the correct bracket to benefit from this reduction!

3. Mandatory electronic invoicing

In September 2021, the government approved the "Crea y Crece" Law, part of the Recovery, Transformation, and Resilience Plan, which requires freelancers and companies to use electronic invoicing in their business transactions.

This regulation modifies Article 112 of Law 56/2007 and introduces Article 1 bis:

“All companies and freelancers must issue and send electronic invoices in their business dealings with other companies and freelancers.”

Until now, electronic invoicing was only mandatory with the Public Administration, and only 15% of freelancers used it. The law aims to digitalize companies, improve competitiveness, and reduce late payments.

A 6-month period from publication was established to define the details and regulations. Finally, on June 15, 2023, the regulatory development was published, indicating the aspects that electronic invoices must include.

Additionally, the 2021 anti-tax fraud law requires companies with invoicing below €6 million to submit their invoices to the Tax Agency immediately. This obligation, initially planned for July 2025, has been postponed at least until 2026.

For more information, check this Grupo200 article on electronic invoicing.

4. VAT exemption for freelancers

Many freelancers expected to benefit from VAT exemption in 2025, a measure that, according to Directive (EU) 2020/285, would have allowed certain professionals not to remit VAT quarterly.

However, the Tax Agency has confirmed that, for now, this regulation will not apply in Spain due to delays in negotiations. This means freelancers will continue managing VAT as before, with no changes at the moment.

5. Changes in the module system

In 2025, the limits of the module system for freelancers are extended. Although it remains a common tool for many entrepreneurs, all indications are that its prominence will decrease in the future. This year, the system remains without significant changes, and the debate about its future continues as in previous years.

👉🏼 Find more information on the Tax Agency website.

6. Reduction of tax rates for SMEs and micro-SMEs

The reduction of Corporate Tax began to be applied gradually from January 1, 2025, with different tiers depending on the company’s size. However, companies will not see the benefit immediately, as the 2024 return (filed in 2025) is still taxed under the current rules. Therefore, the effect of the reduction will materialize in the 2025 return, filed in 2026.

7. New taxation for SMEs

The MEI is an additional Social Security contribution created by the pension reform, intended to strengthen the sustainability of the system and guarantee the payment of future pensions. It applies to all regimes and only to the retirement contingency, feeding the Social Security Reserve Fund.

📈 MEI evolution

• 2023: 0.60% of the contribution base
• 2024: 0.70%
• 2025: 0.80%
• Projection: gradual increase up to 1.20% in 2029

💰 Cost distribution in 2025

• Company: 0.67%
• Worker: 0.13%

📝 How it affects your paycheck

Workers will see a small deduction of 0.13% on their contribution base. The company assumes the majority (0.67%) in its own contributions.

2025 comes packed with tax changes and updates for freelancers and SMEs. Knowing them not only helps you plan your finances and take advantage of benefits, but also avoid surprises in your returns and make smarter decisions for your business.

At Lexington, we know that tax management is just one part of a freelancer's daily life. That’s why we offer coworking spaces designed for comfortable work, focusing on your activity, and growing safely, while making the most of the opportunities brought by these tax updates.

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