Introduced as a real estate investor and owner of 16 apartments, Pascual Ariño brought Spain's tax burden on the self-employed to national attention during an October 2025 broadcast of ‘laSexta Xplica’. He argued that freelancers earning between €1,000 and €1,500 a month face taxes, Social Security contributions and administrative expenses that leave them with little to show for their work.
Before appearing on the programme, Ariño surveyed his followers and found overwhelming agreement that taxpayers are overburdened and public funds are not being managed effectively. He highlighted the demands on workers with modest incomes, who may have to account for VAT, personal income tax (IRPF), Social Security contributions and private compliance costs such as an accountant. Those costs are not all taxes: Spain’s tax system and Social Security regime treat them as separate obligations.
Ariño said this environment is pushing many to operate in the shadow economy or leave Spain in search of better opportunities. He linked the burden to the departure of entrepreneurs, students and young professionals, arguing that the system discourages initiative and growth. The rules distinguish between the amount earned and the nature of the work: regular, independent and economically organized activity can trigger self-employment registration requirements even when monthly income is modest.
Tax Migration and Andorran Comparison
During the debate, Ariño defended his decision to relocate to Andorra, citing the country's more favourable tax regime. He contrasted the Spanish and Andorran healthcare systems, saying a paediatrician visit for his child in Andorra cost seven euros. The Andorran Social Security Fund reimburses up to 75% of certain medical expenses, making healthcare costs significantly lower for residents.
How Spain's Tax System Works for Freelancers
Spain’s self-employed system involves three distinct obligations: IRPF on taxable income, VAT on relevant transactions, and contributions to the Special Regime for Self-Employed Workers (RETA), paid to Social Security rather than the tax authority. The standard VAT rate is 21%, although reduced rates of 10% and 4% and exemptions apply to certain goods, services and activities. For VAT-liable work, freelancers generally settle the difference between VAT charged to clients and deductible VAT paid on business expenses. The 21% headline rate is so not normally a direct tax on a freelancer’s profit.
IRPF is calculated on taxable business performance, not simply on gross invoice value. Under the direct estimation system, taxable net income is determined after allowable business expenses and depreciation are taken into account. Quarterly advance payments through Modelo 130 may apply depending on the activity and withholding arrangements; where required, payment is generally calculated at 20% of net profit. VAT-liable professionals generally file quarterly returns using Modelo 303. These payments and returns have different purposes and should not be added together as if they were rates charged on the same amount.
For professionals invoicing Spanish businesses, an IRPF withholding may also appear on an invoice. A common professional rate is 15%, with a possible 7% rate for new professionals during the start year and the following two tax years. Whether withholding applies, and whether it removes the need for advance payments, depends on the activity and circumstances. TaxDown’s explanation of the system also stresses that VAT and IRPF are separate taxes, while the RETA contribution is a Social Security payment, not a payment to the tax authority.
Social Security Contributions in 2026
Since 2023, self-employed Social Security contributions have been linked to reported net earnings through an income-based system. From 2026, contributions are based on net-income brackets rather than gross billing. Those earning between €1,166.70 and €1,300 per month have a minimum contribution base of €950.98, while those earning up to €1,500 have a base of €960.78. Freelancers can choose a base within their assigned range, and the final contribution depends on applicable rates, discounts and individual circumstances. The contribution base is not itself the amount payable, and two freelancers with similar revenues may face different liabilities depending on net profit, deductible costs and their assigned circumstances.
Not being registered with RETA does not, by itself, remove tax obligations arising from a taxable economic activity: registration with the tax authority, invoicing, VAT and income-tax reporting may still be required. The practical question includes whether the work is habitual, independent and organized, not only how much it earns. Since 2023, people registered in RETA as self-employed workers during any part of the year are also required to file an income-tax return, regardless of how little they earned.
The debate over tax pressure on Spain's self-employed is not new. The tension between Social Security rules and self-employment was highlighted in a recent case in which a retired farmer was ordered to repay nearly €47,000 for continuing to work while receiving a pension, an example of the complexity and strictness of Spain's regulatory environment for independent workers. Details of the case are available in this report on pension and self-employment conflicts.
As Spain continues to debate the balance between fair taxation and economic chance, Ariño's intervention has renewed questions about whether the current system supports or stifles those trying to build a future on their own terms. Any assessment of the burden depends on separating VAT, IRPF, Social Security contributions and private overheads, as well as considering the worker’s net profit, deductions, withholding position and contribution band.
