What are the taxes I need to pay and how is my tax reporting handled by Xolo?

Last updated: March 17, 2021

When using Xolo Go Spain, we assume that you will be operating 100% through Xolo Go and thus, you will be using your local registration in Spain only for receiving funds from Xolo Go.

Once you have been registered as a professional and intra-community operator (VAT payer) in Spain, you start to have obligations towards Spanish tax authorities.

The following reporting and taxes are associated with it:

Income tax reporting

Once you withdraw net funds from your Xolo Go account, it becomes your income from economic activities. That means such sums are reported to the Spanish authorities in the form of an income tax report, and you'll be responsible for paying 20% of the received funds as an income tax pre-payment to the Spanish tax authorities (AEAT). Such taxes are reported and paid once per quarter (April, July, October, January). Xolo takes care of the reporting but the payments should be made from your personal account via direct debit.

Once the year is over (in June of the next year) you'll have to submit your Personal Income Tax (IRPF) where you'll also include any additional income (e.g. you sold an apartment) and deductible expenses/allowances from the previous year. All pre-paid sums will be deducted from your IRPF. This general individual declaration is not covered by Xolo so you'll need to take care of it on your own. The tax authorities (AEAT) will send you a draft and we strongly recommend reviewing this draft on your own and/or with a Spanish tax expert.

VAT reporting

To withdraw funds from Xolo Go, you need to issue an invoice to the Xolo Go legal entity. The sales invoice is generated automatically on behalf of the professional by Xolo. As the professional is located in Spain and Xolo Go is located in Estonia, there is no VAT added on the net sum. Xolo reports the net sum to Spanish tax authorities (AEAT), but no actual VAT payments will be required to be paid because the VAT charged is 0%. VAT reporting is conducted on a quarterly basis (April, July, October, January) and it exclusively includes the sales invoices to Xolo Go.

If you also meet the requirements to register yourself to the social security system and therefore become a full autonomo, then there are additional fees that you'll be responsible for paying to the Spanish authorities.

Social Security fee

Once you register with Social Security, it is your responsibility to begin paying the fixed monthly fee (cuota de autónomos), which will be paid via direct debit from your personal account to the Spanish authorities. The exact amount depends on your professional situation. Xolo assists with the registration and deregistration but there are no further tax reports that need to be submitted.

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