Online Language Teacher: Being Self-employed in Spain
Social SecurityTax Agency (Hacienda)Tax forms
If you are an online language teacher in Spain, surely you have had some doubts about how to bill and the tax treatment of your economic activity.
In this article, we will try to clarify the most common questions such as: what are the procedures to register as a language teacher, in which heading of the Treasury, how to bill if you use Italki or other online class platforms, taxes, etc.
1. Procedures to register in Spain
To bill as an online language teacher in Spain and make your invoices legally, you must be registered in the Treasury and pay your Social security payments. To do this, you must carry out the following procedures:
– Register in the Treasury using the form 036 or the simplified version 037. You can do it in person by making an appointment at the Tax Agency or if you have a digital certificate through the following link on the website of Treasury. In our SelfEmployed Spain’s plans, we include this procedure as well as the registration in Social Security.
– Register in Social Security. Again you can do it in person by going to a Social Security office where you must present your ID and your registration at the Treasury. Also, if you have a digital certificate you can register through the Electronic Social Security Headquarters here, the option “Register for RETA”.
2. Heading for your registration in Hacienda
To register in the Treasury, you will need to frame your activity in a specific IAE heading. The most common one used for language teachers is 826: Teaching Personnel of Diverse Teaching, such as Physical Education and Sports, Languages […] and the like.
This activity is considered professional. For that reason, you can find it in the second section of Royal Legislative Decree 1175/1990 of the tax on economic activities.
The language training is exempt from VAT since these are subjects included in any of the levels or grades of the Spanish education system. That is, you don’t have to submit a quarterly VAT 303 form, nor the annual summary form 390.
The Ministry of Education, Culture and SportsThe determines whether to include or not a kind of training in their educational plans.
Because language training is exempt from VAT, you will have to include in your invoice this text: “This training is exempt from VAT under Art. 20, point 9 of Law VAT 37/1992” or in Spanish “Esta formación está exenta en virtud del Art. 20, punto 9 de la Ley IVA 37/1992”.
Although the training is exempt from VAT, there will be cases in which you will have to apply withholding on your invoices. So you must apply the corresponding professional withholding if the recipient of the training invoice is a professional or a Spanish entrepreneur.
In cases when you invoice to individuals, it will not be necessary for your invoices to be subject to withholding.
5. Periodic procedures
As we have already mentioned, the training is exempt from VAT. That’s why you won’t have an obligation to make quarterly VAT settlements (form 303) nor should you submit an annual VAT summary (form 390).
If your turnover to Spanish companies and freelancers is greater than 70%, you aren’t obliged to submit form 130 quarterly (payment on account of the annual personal income tax). Otherwise, you will be required to submit it.
6. Billing with Italki
First of all, you have to bill Italki. Our advice is that you include several works in the invoice that you issue to Italki (at least once a month), and that it also corresponds with the money you download from the platform.
That way, you can justify that the amount of the invoice matches with the download of the money you receive in your bank.
To issue your invoice, you must complete it with the tax data of Italki, and the amount in euros of the amount you are downloading in your bank.
You should know that Italki will pay you 85% of the price of your classes. And sometimes you may suffer some detriment in the amount received due to the currency exchange (from dollars to euros) that your bank manages.
The invoice goes without VAT and IRPF, since the tax residence of the client Italki is in Hong Kong.
If you use Paypal or Payoneer as a payment gateway, you should consider as an expense in your accounting the commission they charge you upon receiving the payment.
Tags: 036 or 037 form to register teacher, autónomo english teacher spain, italki taxes, online teacher Italki, self-employed teacher register in Spain, taxes language teacher in Spain, taxes online teacher