Justice is Served: Company Administrators Entitled to Reduced Social Security Contribution

Ever since the “big shake up” of 2013 when Social Security finally started to pay attention to business

Ever since the “big shake up” of 2013 when Social Security finally started to pay attention to business owners and decided to make it a little easier to set-up a business by reducing monthly contributions during the first 18 months, corporate administrators have demanded to be heard as said reductions did not apply to them.

In this regard there are two laws that apply, Law 20/2007, 11th July and Law 14/2013, 27th September states that “sole-traders 30 years or older who register for the first time or have not been registered as self-employed during the previous five years may opt for reduced Social Security contributions…” This was later amended so that all new self-employed persons regardless of their age could take advantage of this discount but note that nowhere does it state that this special reduced rate does not apply to those who register as self-employed for the first time as part of a Corporation, however it would seem that public servants at Social Security had not read through the law thoroughly and added their own spin on how it should be interpreted, excluding this collective entirely.

That said, my personal experience with the Administration here in Fuerteventura has been different as they have responded favourably to applications I have made on behalf of clients who constituted companies and have honoured the reduced rate but this unfortunately has not been the same for countless others. For this reason, the news that a sentence at the Superior Law Courts of Galicia acknowledges their right to receive the same discount as per law.

This is a game changer for those who were denied the same opportunity others were given as those who registered as self-employed from February 2013 may now request Social Security refunds them up to 3.700 euros for the misdemeanor.

The Spanish system for self-employed persons is one of the toughest in the world as monthly contributions aren’t calculated according to earnings, instead a flat rate applies. This flat rate currently has a minimum of 267,04 euros per month! Not an easy feat when you are just starting out so even though Social Security is starting to take heed by offering the possibility of lower rates at the start of business there is still a long way to go. Everybody has the right to have a good fighting chance at success in their business ventures and the State should do everything in their power to ensure that sole-traders are given every opportunity to do just that.


About Sabrina L. Williams

Although I was born in the UK, I moved to the Canary Islands, Spain at a young age and I haven't looked back. The Canaries is a fantastic place to live, I mean you can do all types of outdoor activities practically all year round because of the great weather. Horses are my poison but the islands are also a superb spot for water sports so they do attract a lot of attention from people around the world. Anyway, enough about that. Back in 2011, I made one of the biggest, scariest yet best decisions I'd ever made and set-up my own business in the middle of a recession. I love what I do as no two days are the same, plus Spanish law keeps me on my toes as it is constantly changing (often without warning!) so there is always something new to learn. As I've branched out in the world of Administrative Consultancy, I decided to create a blog to discuss topics of interest to others in my industry and my clients, share tips and experiences, to see what new ideas people have for improving their businesses and the like so I hope you'll find the time to join me on this venture...

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