What is a corporate self-employed person and what taxes do they pay?

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The crisis has forced those who wanted to start a business with a series of ideals to partially give up those objectives in order to adapt to the situation. This has allowed figures such as the ERL or the unknown corporate self-employed person to be revalued .

Of the more than 3 million workers registered with the RETA, around 40% pay taxes under this flexible legal figure , which allows them to play tax-wise between the position of a conventional self-employed person and that of an entrepreneur.

Today at MÁSMÓVIL Negocios we explain in detail what corporate self-employment consists of , and what advantages it offers. If it has any.

Self-employed corporate

What is a corporate self-employed person?
At first glance, formalizing the paperwork to become netherlands number data self-employed is much simpler and cheaper than formalizing a company. But there are many workers who, due to their objectives or the particularities of the business they are going to open, need to opt for another legal form.

For all of them, the model of the corporate self-employed person was born ; a conventional self-employed person, who nevertheless appears before the Treasury as the administrator of a Limited Company , that is, a business.

Among entrepreneurs without large resources or large rounds of financing , this figure has become especially important, as it allows activities to be carried out jointly, but which does not entail additional legal obligations.

When weighing the pros and cons of choosing one legal entity or another, interested parties often face differences in terms of taxation and liability . That is, what they must pay, and what they would put towards meeting debts.

And it is not an easy decision; the self-employed person faces bankruptcy with all his assets , but benefits from solutions such as the flat rate. The corporate self-employed person does not have tax advantages , but neither does he put his private assets at risk if something goes wrong.



Exclusionary requirements
In many cases, those who decide to formalize their status as a corporate self-employed person do so not of their own free will, but under obligation. And unless they have no responsibility in the company, the law requires them to adopt this formula based on certain percentages .

If you own at least 50% of the capital, including your own shares, those of your spouse and those of your relatives up to the second degree. They must live in the same property.
If you own at least 33% of the company's share capital.
If you own at least 25% of the capital and hold management or executive positions.
At a more specific level, the jurisprudence begins to assess in detail the participation of the interested party in the company of which he/she would be a part. In this way, it attempts to elucidate whether there is an illicit motive behind the request.

Therefore, any partner with effective control and administrator of the company , who performs real management and direction functions, would be required to pay contributions as a self-employed partner.

This also applies to partners who have passive functions but who actively work in the company and receive remuneration for it. However, it excludes all those who are not directors or do not work in the company .



The peculiarity of invoices
The hybrid nature of the corporate self-employed person leads to confusion for many of the taxpayers included under its name. Do they have to submit invoices? Do they receive a conventional salary and are therefore exempt?

The Personal Income Tax Law updated in 2015 clarified the situations in which a worker under this legal figure had to issue invoices and therefore pay the corresponding taxes.

By definition, a corporate self-employed person should not declare himself as a traditional self-employed worker, but it is true that it is possible to receive a salary . They must present invoices:

If you use your own means to work.
If you have a schedule and vacations independent of the company.
If you face the risk of the activity with your own assets.
If you have contractual responsibility with your clients.
In this case, the invoices are subject to the traditional 21% VAT and the already known 15% IRPF withholding . This last percentage decreases to 7% from the second year of contributions to the RETA.