Updating the CNAE-25, if applicable, is a requirement for self-employed workers before 30 June. In this article, we explain why and the consequences of not doing so.
What is CNAE-25?
The CNAE code (National Classification of Economic Activities) is a number that identifies and classifies your professional activity in a specific sector.
It contains 4 digits and is mandatory when registering a company for Business Activity Tax (IAE).
It is used for statistical purposes.
What happens? This code does not necessarily imply a payment, because the vast majority of self-employed workers will be exempt from paying the IAE due to their turnover or the policies implemented by the local council. For this reason, it is relatively common for this issue to be forgotten once the census declaration has been made.
Form 036 must be submitted when the business is opened, yes. But you also have to notify any changes to the business, and that is where the CNAE changes come in.
Why might your CNAE-25 have changed?
Updating the CNAE-25 may be necessary because a new nomenclature has come into force this year. Until now, the CNAE-09 was in force, as the last classification dated from 2009. In this case, new professions have been added and some sections have been simplified. These are the main changes in the cnae 2025:
- Inclusion of new activities: new professional activities that were not previously included have appeared. In this case, a reallocation will have to be made. It should be borne in mind that, in 16 years, new cases have arisen that require different classifications.
- Breakdown of activities: in some cases, activities with a single CNAE code have now been broken down to more accurately reflect reality. For example, new classes have appeared in intermediary activities and manufacturing. The same is true of division J, which has been broken down into two new divisions.
- Reassignment of activities: in certain groups, there is a reassignment of activities, either to group them together or to simplify them. This happens, for example, in group 35. In some cases, it is a simplification, in others, it is a more complex issue. That is why it should be consulted.
However, does this change always have to be reported? The answer is no, provided that the CNAE-2025 corresponds to the CNAE-2009. If this is the case, which is quite common, the Social Security will make the change automatically. In any case, if you have an existing business, you should check to make any necessary changes before 30 June.
Updating the CNAE-25: the consequences of not doing so
Failure to update the CNAE-25 can lead to a number of problems, especially in the medium and long term. These are the main consequences of incorrect nomenclature:
1. Identification problems
Firstly, although the CNAE-25 is intended for statistical purposes, it can cause problems for Social Security identification purposes. This is even more important when we are talking about a company that has employees. Sometimes, incorrect identification can mean that you do not receive a notification that you are entitled to, with the resulting problems.
2. Possible penalties
Incorrect classification of the activity opens the door to administrative penalties if there are problems. These can be of various types: for an incorrect activity, for not having adequate insurance for the declared activity or for Occupational Risk Prevention issues. Even if it is the result of a misunderstanding, it is best to avoid them by ensuring that the activity is correctly assigned. Administrative penalties are an avoidable expense if the information is correctly reported.
3. Setbacks in accessing subsidies
Finally, a penalty or incorrect identification can cause problems when accessing subsidies and grants. This can have practical consequences for the viability of a company, especially if it needs financing or to update processes. This is not always a short-term problem, but it can be in the medium and long term. The reality is that many small self-employed workers are only aware of the magnitude of this difficulty when they encounter it.
4. Difficulties in paying social security contributions and taxes
Incorrect classification in the CNAE-25 can cause problems with your contribution base; you will either pay more or pay less, and this may be claimed from you later. Another possibility is that the taxes you have to pay (municipal, regional or national) are not adjusted to your actual activity. In the long run, having this point out of date is synonymous with complications in administrative procedures.
Consequently...
Updating your CNAE-25 with Social Security is essential. At Asesoría Orihuela Coste, we specialise in providing advice for self-employed workers. We make your life easier. Contact us for a no-obligation consultation and we will provide you with all the information you need.
