Autonomo vs. SL

Solopreneur Hub
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Hello. In September, I’ll be two years registered as an autonomo. As I understand it, my tax will increase. I have read that if you consistently earn over €60k per annum, that for tax reasons, a viable option would be to set up a Sociedad Limitada (SL). Has anyone gone through this process? Any advice would be appreciated. I am basically trying to find the most tax efficient way to conduct my affairs. It’s only me, and I have no intentions of hiring anybody else.

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Hey @rory, Jay here. Finding the most tax efficient way to conduct your affairs can be a messy maze in Spain. Your view is right with this comparison on a general basis, but you may be missing the bigger picture. I don’t have enough context of your business to let you know which option suits best for you, but we can jump on a call and discover together the best route for your purpose. Feel free to reach me.

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Hey Rory, thanks for bringing this up I’m sure someone out there must have been on a similar journey and can share their notes.

For good measure I just ran your post by our support team who mentioned the following points. You’ve probably already thought through most, if not all, of them but sharing them here anyway in case they’re relevant to others.

When considering whether to set up a Sociedad Limitada (SL) make sure to weigh out the following:

  • The income billed from the company belongs to the company, not to the owner. Meaning, in order to get this money you would need to pay yourself a salary or distribute dividends once the tax year is finished - and with benefits
  • The taxation of the company is 25%
  • On top of the 25% company tax you also pay individual tax on the salary or dividends you pay out to yourself
  • In the company you can only deduct expenses related to the company itself and operations. As an autonomo your mortgage and home office utility bills are deductible. This is not the case for SLs.
  • An SL has stricter obligations related to bookkeeping, accounting and legal and therefore higher fees and costs related to this

I hope this was helpful although I don’t have actual experiences from real life on this matter to share with you.

Good luck :slight_smile:

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Hacienda is making most people very dizzy indeed.
When growing you can have a SL next to your Autonomo OR
the other way to fully open a SL and than deregister the Autonomo.

A SL sounds more beneficial for you as a Spanish tax resident but all depends again on the salary you pay yourself from SL.

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Hi @rory

Yes, afaik it might be benefitial to setup a SL if your revenue is >60k€ annual, mainly because as autonomo the personal income tax will be higher than the corporation tax (25%). Important thing is all income will belong to the corporation in this case, so if you want to pay yourself out of this money by dividends or salary, you will be paying the personal income tax. In short, and please someone correct me if i am wrong, but i think it is benefitial if you want to reinvest some of the money in the business.

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