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WORKING IN SPAIN

NEW LAWS: How it’s now easier for foreigners to work in Spain

Spain has amended its immigration laws to make it easier for non-EU citizens (UK nationals, Americans etc) to work in the country in a bid to address some of its most pressing labour shortages. Here are the changes, the reasons why they’re being introduced and more.

spain new work visa laws
According to Spain’s Social Security Minister José Luis Escrivá, the measures will "improve the Spanish migratory model and its procedures, which are often slow and unsuitable", admitting that they have "high social and economic costs for Spain". (Photo by LLUIS GENE / AFP)

What are the new changes in a nutshell?

The Spanish government has amended its laws relating to the rights and freedoms of non-EU foreigners in the country, as a means of resolving the bureaucratic obstacles which often prevent Spain from using its migrant population to cover labour shortages.

There are three main changes: 

  • Undocumented third-country nationals who have lived in Spain for two years or more can seek temporary residency papers.
  • Non-EU students will be able to work up to 30 hours a week while studying, and to start work in Spain at the end of their studies.
  • Non-EU nationals will be able to obtain a work visa to come to Spain more easily and take up jobs in areas facing labour shortages i.e. tourism, construction, agriculture.

Why is the Spanish government introducing these changes?

Spain may have the highest unemployment rate in the EU (around 13 percent, just under 3 million people) but it is also struggling to cover thousands of job positions.

This paradoxical situation is down to a combination of factors, not least the low wages and unstable working conditions that are pervasive in Spain’s labour market. 

READ MORE: 

Couple that with an inflexible bureaucratic system which is counterproductive to Spain’s economy and labour market and you have a situation where Spaniards would rather pass on exploitative jobs and stay at home, and foreigners who are eager to work regardless of the poor conditions/pay cannot because the law won’t allow them to.

If we take a closer look at the three main changes listed above:

Undocumented migrants in Spain, those who arrive in the country without first applying for a residency or work permit, have up to now found themselves trapped in a situation where for years they can’t apply for jobs with social security and other workers’ rights, leaving them with little option but to work in the black. 

Third-country higher education students in Spain who completed a degree, Masters or Phd up to now didn’t have their residency in Spain guaranteed after completing their studies, having to instead apply for residency and renew their permit regularly, contributing to a brain drain of talent that Spain trained and then didn’t harness. Those on student visas could also only work a maximum of 20 hours a week previously.

And as for non-EU people applying for a work visa in Spain, up to now the only way for third-country nationals to be hired from overseas for a contract job was if employers could not find an EU candidate for the position or if the job was on Spain’s shortage occupation list, which is made up almost entirely by jobs in the maritime and shipping industry. In reality, there are many industries that are central to Spain’s economy that are struggling to find workers.

The Spanish government has finally realised how these inflexible laws are proving extremely damaging to its economy at a time when employers are struggling to find tens of thousands of workers for the tourism, construction and agriculture industries. 

According to Spain’s Social Security Minister José Luis Escrivá, the measures will “improve the Spanish migratory model and its procedures, which are often slow and unsuitable”, admitting that they have “high social and economic costs for Spain”.

When will these new laws come into force?

Although the new laws were published in Spain’s state bulletin (BOE) on Wednesday July 27th, the legislation is set to come into force on August 15th 2022.  

Is there anything else I should know?

When it comes to Spanish politics, what Spain says it will do and then actually does are often two very different things. 

Take for example the alleged streamlining of degree validation for highly-skilled professionals such as non-EU doctors, dentists, engineers and other regulated professions, known in Spain as homologación

People in Spain with non-EU qualifications are currently having to wait two, three, four or even more years for Spain’s bureaucratic labyrinth to get round to validating their qualifications, even though the legal deadline is just six months and there are huge shortages in their expert fields. 

New decrees have promised to address the hold-ups but in reality nothing has changed. A lawyer specialising in helping foreigners with the homologación process told The Local that “unless Spain allocates more budget to employ more competent civil servants to address the problem, nothing will change”. 

However, the latest law change is overall good news for all non-EU foreigners who wish to move to Spain for work in the hospitality and tourism sector, construction or agriculture, including UK nationals, Americans, Australians, South Africans and any other third-country nationals.

The process for applying for a work permit should be considerably easier, but they should not forget that Spain is a country with wages that are lower than other countries in Western Europe and that it doesn’t have a good reputation in terms of work conditions. 

Therefore, their reasons for moving to Spain shouldn’t just be for a job, as this is a country which excels in many other fields (quality of life, weather, culture, people, nature) but generally not work.

READ MORE: The downsides of moving to Spain for work

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For members

TAX

How much will you save with Spain’s income tax cut?

How much do contract workers, self-employed workers, small businesses and pensioners stand to save with the government’s new income tax reductions?

How much will you save with Spain's income tax cut?

On Thursday September 29th, Spain’s Budget Minister María Jesús Montero announced that her administration will reduce the personal income tax on people earning up to €21,000 gross ($20,200) per year.

At the same time, she confirmed the government will slap a new tax in 2023 and 2024 on residents whose wealth exceeds €3 million to help pay for inflation relief measures.

In this article, our focus will be on contract workers, self-employed workers, small business owners and pensioners who are lower earners.

The announcement of the tax changes comes as Spain is gearing up for local elections in May 2023 and a general election expected at the end of next year, which has led right-wing regional governments and the left-wing national government to engage in a tax war to sway the voting balance in their favour.

But how much will ordinary hard-working Spaniards and foreign residents actually benefit from the national government’s new tax measures?

Contract workers and pensioners:

The Spanish government has offered four cases with different incomes and personal conditions, serving as examples of how they will calculate how much each one stands to save.

The tax reductions apply to rendimientos del trabajo (earned income), with more earners in the lower-pay grade set to gain as deductions will now apply to those who earn up to €21,000 gross a year rather than up to €18,000 as it was previously. 

  • A worker who is married, has children, earns €19,000 (gross) a year and does a joint tax declaration stands to save €331 on their annual income tax return. 
  • A pensioner who is over the age of 65 and has a pension of €16,500 will save €689.
  • A single parent who has two children and who earns €18,500 (gross) will save €516 on their income tax return. 
  • A worker with no children with an annual income of €18,000 (gross) will save €746 on their income tax return.

The change in tax conditions means that workers on Spain’s minimum wage (€14,000) will not have to pay income tax if they don’t earn above €15,000, which is the new threshold.

Self-employed workers 

Some of the reforms approved by Spain’s national government also seek more favourable tax conditions for the country’s self-employed workers and small businesses in terms of income tax (IRPF) and corporate tax (impuesto de sociedades). 

According to Spanish tax agency Hacienda, 1.6 million autónomos (as self-employed workers are called) stand to benefit from the IRPF cut, and up to a quarter of small businesses (500,000 micropymes) will gain from the corporate tax reduction. 

The changes for autónomos are that those who use the módulos system to estimate their earnings will get an additional 5 percent tax reduction on their net income.

Módulos (modules) is the name used to refer to the tax settlement system that allows some self-employed workers to pay the Spanish taxman based on their estimated benefits rather than their exact monthly earnings, thus simplifying the declaration process.

Autónomos will also get an increase in the margin of expenses that are difficult to justify (Gastos de Difícil Justificación) on their income tax return, from 5 to 7 percent. 

However, Spain’s main autónomo association ATA has criticised the reduction as “stingy” given that on average self-employed workers will only save €115 on average on next year’s annual tax return.

Small businesses that invoice less than €1 million will get the promised tax reduction from 25 to 23 percent on their nominal corporate tax.

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