A professional freelancer in Spain applies 15 % IRPF (Spanish personal income tax) withholding when invoicing a company, another sole trader or a homeowners' association (comunidad de propietarios), under article 95.1 of the IRPF Regulation. The rate drops to 7 % during the start-up year and the following two, provided the payer is notified in writing beforehand. Nothing is withheld from a private individual.
Case table: which percentage applies to each freelancer invoice
The percentage depends on who pays the invoice and which activity generates it. The general rule for professionals is 15 %; the other rates are specific exceptions.
| Case | Applicable withholding | What to bear in mind |
|---|---|---|
| Professional invoicing a company | 15 % | General rate under article 95.1 of the IRPF Regulation |
| Professional invoicing another sole trader | 15 % | The client must be acting within its business activity |
| Professional invoicing a homeowners' association | 15 % | The association withholds even though it is not a company |
| New professional who notifies in writing | 7 % | Start-up year and the following two |
| New professional without written notice | 15 % | Without the notice, the payer applies the general rate |
| Invoice to a private individual | No withholding | Private individuals are not required to withhold |
| SL invoicing services to another SL | No withholding | It is not professional income of an individual |
| Commercial premises rental | 19 % | Its own rate, different from the professional one |
| Farming or livestock activity | 2 % | Pig fattening and poultry: 1 % |
Business activities, such as retail or hospitality, generally do not carry this withholding on their invoices. The 15 % and 7 % rates apply to income from professional activities.
When to apply 7 % on a new freelancer's invoice
The reduced 7 % rate applies in the year you register and in the following two calendar years, as long as you did not carry out a professional activity in the year before starting. From the fourth year you go back to 15 %.
The key requirement is formal: you must notify each payer in writing that you meet the conditions. A simple letter with your details, the activity start date and a statement that you did not carry out a professional activity the previous year is enough. Without that notice, your client must withhold the general rate even if you are new.
If you are still preparing to start your activity, the step-by-step freelancer registration guide covers the prior formalities, including the point from which the start-up year counts.
Example of a freelancer invoice with 15 % IRPF to a company
A professional who invoices 1.000,00 € in fees to a company receives 1.060,00 €, not 1.210,00 €. The difference is the withholding, which the client keeps and pays to the Spanish Tax Agency (AEAT) on the professional's behalf.
| Invoice item | Calculation | Amount |
|---|---|---|
| Taxable base | service fees | 1.000,00 € |
| VAT (21 %) | 1.000,00 € × 21 % | 210,00 € |
| IRPF withholding (15 %) | 1.000,00 € × 15 % | −150,00 € |
| Invoice total (base + VAT) | 1.000,00 € + 210,00 € | 1.210,00 € |
| Amount to collect | total − withholding | 1.060,00 € |
Withholding is always calculated on the taxable base, never on the total including VAT. If the 7 % rate applies to you, the calculation is identical: only the percentage applied to the same base changes. To check your own figures you can use the invoice calculator with VAT and withholding.
Who pays the withholding: modelo 111, 190 and 130
The payer pays the withholding to the tax authorities, not the freelancer issuing the invoice. The client reports it every quarter on modelo 111 (the quarterly withholding return) and summarises it on modelo 190 (the annual withholding summary), filed from 1 to 31 January.
On modelo 190 each percentage has its own code: G01 for the general 15 % rate and G03 for the reduced 7 % rate. If your client uses the wrong code, the tax data the AEAT shows you in your income tax return will not match your invoices.
For a sole trader under direct estimation, the amount withheld works as a payment on account. On modelo 130 (the quarterly income tax prepayment) you pay 20 % of the net income accumulated since 1 January, minus previous instalment payments and the withholdings borne. It is filed in the same periods as modelo 303 (the quarterly VAT return): from 1 to 20 April, July and October, and from 1 to 30 January.
That is why, if almost all your clients are companies that withhold from you, modelo 130 usually comes out low or at zero. If you mainly work for private individuals, nobody prepays that tax for you and the instalment payment is higher.
4 mistakes when choosing between 15 % and 7 % on an invoice
- Withholding from a private individual. An invoice to an end consumer carries no withholding: if you include it, the individual cannot pay it in and the amount collected does not add up.
- Applying 7 % without written notice. The reduced rate is not automatic; without the letter to the payer, the payer must withhold the general rate.
- Calculating the percentage on the total including VAT. The withholding base is the taxable base; VAT is left untouched.
- Keeping the reduced rate after the deadline. Once the start-up year and the following two end, all invoices to companies move to 15 %.
Frequently asked questions
Does a freelancer have to apply withholding on an invoice to a private individual?
A freelancer does not apply withholding on invoices to private individuals, because the individual is not acting as a business or professional and is not required to withhold. The invoice shows the taxable base and VAT, and the freelancer prepays the tax on that income in their quarterly instalment payment.
How many years can the 7 % withholding be applied?
The reduced 7 % withholding applies during the start-up year of the professional activity and the following two years. You must not have carried out a professional activity the previous year and must notify each payer in writing. Afterwards, the professional returns to the general 15 % rate.
What happens if a new freelancer does not notify in writing that the 7 % rate applies?
A new freelancer who does not notify their situation in writing will have 15 % withheld, because the payer can only apply the reduced rate with that notice. The excess withheld is not lost: it is deducted as a payment on account on modelo 130 and in the income tax return.
Does an SL invoicing services to another SL carry withholding?
An SL (Spanish limited company) invoicing services to another SL does not include IRPF withholding on the invoice, because the income is not professional income of an individual. The invoice shows only the taxable base and VAT. The obligation to withhold arises when the professional issuing the invoice is a sole trader.
If you also want to know how the new obligations for your invoicing software affect you, take Fakturia's free VeriFactu risk diagnosis: in 2 minutes you will know which date applies to you and what to review in the way you invoice.