Understanding the figure of the economically dependent self-employed worker is key if you work almost exclusively for a single client and are looking for an accountant for self-employed in Palma to help you avoid legal risks and financial penalties arising from poor contractual or tax management.

In a management services in Mallorca, this is a very common query among self-employed professionals who concentrate most of their income on a single client and are unaware of the legal consequences of not correctly formalising their status as an economically dependent self-employed worker.

What is an economically dependent self-employed worker (TRADE)

An economically dependent self-employed worker, known as a TRADE, is a self-employed professional who carries out their economic or professional activity for a company or client from whom they receive at least 75% of their income.

This is a particularly controversial figure, as it is closely linked to so-called false self-employment, meaning professionals who are hired as self-employed workers to avoid a standard employment relationship and the payment of contributions to the General Social Security Scheme.

For this very reason, self-employed workers’ associations have been calling for years for the integration of TRADEs into the General Social Security Scheme, as the line between a commercial relationship and an employment relationship can be very thin.

In addition, as we will see below, meeting all the legal requirements to be recognised as a TRADE is not easy, and any mistake can have significant financial consequences.

How to formalise a TRADE contract step by step

1. Verify that the legal conditions are met

• Receive at least 75% of income from a single client.
• Not have any employees hired under an employment contract.
• Not subcontract part or all of the professional activity.
• Have own means and infrastructure when relevant to the activity.
• Not carry out the activity in an undifferentiated manner alongside the client’s employees.
• Act under their own organisational criteria.
• Assume the risks and rewards of the activity and be paid based on the agreed results.

2. Notify the client in writing of the TRADE status

The self-employed worker must notify the client in writing that they meet the legal requirements to be considered a TRADE and that a contract under this modality will be formalised. It is essential to keep proof of this notification.

3. Sign a written contract with the minimum required clauses

The TRADE contract must be formalised in writing and must include, at a minimum, the following contents:

• Full identification of the parties.
• Express declaration of the status as an economically dependent self-employed worker.
• Object of the contract and cause of the professional relationship.
• Economic consideration, frequency and method of payment.
• Maximum working time.
• Rest periods and interruptions of the activity.
• Applicable professional interest agreement, if any.

In addition, the worker must expressly declare in the contract:

• That they receive more than 75% of their income from the main client.
• That they have no employees and will not subcontract the activity.
• That they have their own means.
• That they will notify any change in their economic dependence.
• That they do not own premises or offices open to the public.
• That they do not carry out the activity through a company or together with other professionals.

4. Register the contract with the SEPE

The contract must be registered with the State Public Employment Service within 10 working days from its signing. After registration, the self-employed worker must notify the client within 5 working days.

If 15 working days elapse from the signing without the worker having completed the registration or notification, the client will be obliged to register it within 10 working days.

The procedure is carried out through the TAED Register on the SEPE electronic platform using a digital certificate, electronic ID card or the Cl@ve system. This is something you can delegate to an accountant for self-employed in Palma specialising in TRADEs or economically dependent self-employed workers.

Requirements and obligations of the economically dependent self-employed worker

• Receive more than 75% of income from a single client
• Not have employees
• Not subcontract the activity
• Have own and independent means
• Have a written contract
• Register the contract with the SEPE

How much does a TRADE pay

A TRADE has the same tax obligations as any other self-employed worker. They must declare and pay Personal Income Tax (IRPF) and VAT through their quarterly and annual returns.

In addition, they must pay the monthly self-employed contribution to Social Security.

In this case, it is mandatory to contribute for occupational accidents and professional diseases through a collaborating mutual insurance company, which slightly increases the monthly contribution.

Operation and characteristics of the economically dependent self-employed worker

The client may request the self-employed worker to prove their TRADE status both at the time of signing and subsequently, provided that at least six months have passed since the last accreditation.

For this accreditation, the latest income tax return or an income certificate issued by the Tax Agency may be used.

The registration of the contract with the SEPE is not public, but failure to comply may result in penalties.

The TRADE must have their own infrastructure and may not have employees under their responsibility nor subcontract the activity.

Duration of the TRADE contract

The duration of the contract will be what the parties agree, and it may set a specific end date or be linked to the duration of a specific service.

If no duration or specific service is established, the contract will be presumed to be indefinite from the date of formalisation.

Termination of the contract

• Mutual agreement between the parties.
• Death, retirement or disability incompatible with the activity.
• Serious breach by the client.
• Decision of the client with justified cause.
• Decision of the worker who is a victim of gender-based violence.
• Any other legally established cause.

Justified interruptions of the professional activity

• Mutual agreement between the parties.
• Urgent and unforeseeable family responsibilities.
• Serious and imminent risk to life or health.
• Temporary incapacity, maternity or paternity.
• Situations of gender-based violence.
• Force majeure.
• Other cases agreed in the contract or professional agreement.

Frequently asked questions about TRADEs

Can there be economic dependence on more than one client?

No, economic dependence can only exist with respect to a single client from whom at least 75% of income is received.

Is a TRADE entitled to compensation?

Yes, when the termination of the contract occurs due to unjustified breach by the client, the TRADE is entitled to compensation for the damages suffered.

Is it mandatory to issue invoices monthly?

No, invoicing can be agreed with the client and carried out quarterly if so agreed.

Having specialised management services in Mallorca is essential to analyse each specific case and avoid mistakes that could lead to penalties or significant financial losses.