Types of tax benefits for the self-employed
Posted: Thu Jan 23, 2025 6:41 am
Starting a business on your own has many benefits: more autonomy, flexibility in organising your working day and better work-life balance. It is no coincidence that 57% of self-employed people say they are very satisfied with their work and 56.7% have been working for more than five years, according to a survey .
Obviously, not everything is perfect. The burden of Social Security payments is unsustainable for 51.6% of self-employed workers and becomes one of the main concerns for those who continue working. 71.1% also admit that they do not feel protected by Social Security or mutual insurance companies and 96% think that their pension upon retirement will be too small.
Despite this, 14.4% of self-employed people have received help to uae mobile phone number start their business . In fact, if you are thinking of starting your own business, it is important that you know the different types of tax benefits that you can take advantage of so that those first years do not become too difficult and you can grow your business.
What are tax benefits?
Tax benefits are all those advantages from a tax point of view that are applied to companies, SMEs, self-employed workers and individuals, with the aim of reducing the tax burden to which they are subject .
Tax benefits are regulated by law and are usually granted when individuals or legal entities carry out certain positive practices, whether at a social, labour or environmental level. They are also applied as part of programmes to encourage job creation, for example, or when certain market practices are to be rewarded.
What are the types of tax benefits for the self-employed?
There are different types of tax benefits, depending on your origin and activity. If you are self-employed, these are the main tax advantages you can take advantage of:
Deductions
They imply a reduction in the taxable base of a tax, so that the income subject to taxation decreases , provided that the self-employed person meets certain requirements.
In the case of personal income tax, self-employed persons are entitled to a series of deductions . For example, you can deduct all operating expenses related to your professional activity, employees' salaries, Social Security contributions, rents and fees, and insurance premiums. You can also deduct the costs of banking services, including financial expenses represented by loans and credits.
Particularly interesting are the deductions for the services of independent professionals you use. Invoices you issue to persons subject to the obligation to withhold, such as other professionals or legal entities, involve a 15% withholding. However, the Tax Agency reduces this withholding to 7% when you start your professional activity. This reduction will be applied during the tax period in which you begin working as a self-employed person and during the two following ones, provided that you have not carried out any professional activity during the previous year.
Obviously, not everything is perfect. The burden of Social Security payments is unsustainable for 51.6% of self-employed workers and becomes one of the main concerns for those who continue working. 71.1% also admit that they do not feel protected by Social Security or mutual insurance companies and 96% think that their pension upon retirement will be too small.
Despite this, 14.4% of self-employed people have received help to uae mobile phone number start their business . In fact, if you are thinking of starting your own business, it is important that you know the different types of tax benefits that you can take advantage of so that those first years do not become too difficult and you can grow your business.
What are tax benefits?
Tax benefits are all those advantages from a tax point of view that are applied to companies, SMEs, self-employed workers and individuals, with the aim of reducing the tax burden to which they are subject .
Tax benefits are regulated by law and are usually granted when individuals or legal entities carry out certain positive practices, whether at a social, labour or environmental level. They are also applied as part of programmes to encourage job creation, for example, or when certain market practices are to be rewarded.
What are the types of tax benefits for the self-employed?
There are different types of tax benefits, depending on your origin and activity. If you are self-employed, these are the main tax advantages you can take advantage of:
Deductions
They imply a reduction in the taxable base of a tax, so that the income subject to taxation decreases , provided that the self-employed person meets certain requirements.
In the case of personal income tax, self-employed persons are entitled to a series of deductions . For example, you can deduct all operating expenses related to your professional activity, employees' salaries, Social Security contributions, rents and fees, and insurance premiums. You can also deduct the costs of banking services, including financial expenses represented by loans and credits.
Particularly interesting are the deductions for the services of independent professionals you use. Invoices you issue to persons subject to the obligation to withhold, such as other professionals or legal entities, involve a 15% withholding. However, the Tax Agency reduces this withholding to 7% when you start your professional activity. This reduction will be applied during the tax period in which you begin working as a self-employed person and during the two following ones, provided that you have not carried out any professional activity during the previous year.