For IRS declarations running from April through June, there are several updates to take into account in Annex B (freelancers), with more tables to complete: 17A, 17B, 17C and 17D. All are destined to declaring expenses and charges borne by the independent worker in the exercise of a business activity (income, electricity, water, transportation, communications and insurance, among others). They stem from modifications to the Simplified Regime introduced in the 2018 State Budget.
If you exercise the “high value ” profession associated with your Non Habitual Resident application in Category B, the levy is customarily based on 75% of gross income, taxed at a flat rate of 20%. This leaves a final flat rate assessment of 15%, as compared to +40% as a typical higher rate taxpayer.
If your business activity is different from your NHR status, tax is commonly based on 35% of the gross income in the Simplified Regime, then assessed at marginal rates. This leads to a typical final assessment of 10-15%
The Government has confirmed that, for independent workers under the Simplified Regime, Social Security deductions are to be based on net taxable income after application of the appropriate coefficient, not the gross received. In addition, overall Social Security deductions due may not exceed 10% of gross income from all sources.