I've been doing graphic design work on international platforms for like 8 months now but I've never reported anything to the tax authorities. A friend told me that's illegal and they can hit me with a nasty fine. Does anyone know what the deal is with this? What kind of risk am I running if I don't register?
The most important thing is to register as a self-employed worker as soon as possible, because the tax authorities have ways of finding out and it's much worse afterward. Platforms like Fiverr and Upwork have agreements with tax authorities in several countries, and if you reach a certain income threshold, they report that information. In Spain, if you work without being registered, you're exposed to fines ranging from €300 to 150% of the taxes you failed to pay, not counting late payment interest. Plus, if you've never filed anything, that adds up and can be pretty serious.
The trick is to act now instead of waiting. When you register as self-employed, you'll have to regularize those 8 months of income, yeah, but it's infinitely better than having them discover it and charge you everything at once with penalties. The process is to open a file number at the Tax Agency, register in the self-employed regime and start invoicing properly. You'll have to declare what's past, but at least you'll be within the law and you avoid nasty surprises.
Your friend is right that it's complicated. Tax authorities aren't stupid, and those platforms generate paperwork that sooner or later gets cross-checked, especially once your income starts becoming serious money. Fines can be 50% of what you didn't declare, plus late-payment penalties, and if they see it as deliberate fraud they can go further. Plus, if you never registered as self-employed, they can also come after you for social security contributions. Eight months without declaring isn't the worst thing out there, but you're already in risky territory.
The practical thing nobody usually mentions: before you officially register, check if you can qualify for some transitional tax scheme or if there's a tax amnesty in place in your autonomous community. Some regions have programs to regularize small income without such harsh penalties. Call a tax advisor (it's not expensive for these cases) and tell them the situation straight. A lot of advisors know how to minimize the damage if you do it voluntarily right now instead of waiting for the tax authorities to find you.
What you shouldn't do is keep going as you are. The risk goes up every month that passes, and in a year you'll be sweating every time you get a weird email. Registering now as self-employed, declaring what you made in these eight months (even if it's approximate) and starting to issue invoices from here on is annoying but way better than the alternative.
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