If you work in Spain as an autónomo, you will have to deal with the IRPF (Impuesto sobre la Renta de las Personas Físicas), or Spanish income tax for individuals. When billing, many freelancers directly charge their clients an upfront percentage of IRPF withheld. This amount is then withheld by the client and remitted to the tax authorities. But which rate should you apply: 7%, 15% or sometimes 0%? Below we explain when to apply which percentage.

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15%: the standard rate‍.

• Most self-employed people (autónomos) use 15% IRPF on their invoices.
  
• You deduct this percentage from your fee, and then the client remits it to the IRS on your behalf.
  
• Example: Invoice of €1,000 → 15% IRPF = €150 deducted. You receive €850 (excluding VAT).
  

7%: the reduced 'starting rate' ‍.

• As a starting autónomo, you may apply 7% in the first three years.
  
• Condition: you start a certain activity for the first time (or after a long time).
  
• After these three years, you automatically switch to 15%.
  

0%: no IRPF on the invoice

• For private customers (no entrepreneur/company) you do not put IRPF on the invoice.
  
• With foreign customers, often 0% IRPF also applies, because they are not taxable in Spain.
  
• In some specific sectors or activities, 0% may apply (for example, certain educational or medical services).

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Who pays the IRPF deduction?

When you send an invoice with an IRPF deduction, you don't pay that amount yourself - your customer does so on your behalf. For example, consider this situation:

• ‍Invoice amount: €200‍.
  
• IRPF withholding: €30 (15% of €200)‍.
  
• What you receive: €170
  

So your client pays a total of €200, but retains €30 which is then transferred to the Tax Office via the quarterly Form 111. It is a kind of advance payment of your income tax.
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Important: If you receive an invoice on which IRPF has been deducted (for example, when you buy a product), you are responsible for paying that amount to the Tax Office.
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How do you indicate IRPF deductions on your invoice?
To keep track of everything neatly, use two forms:

• ‍Form111: You fill out this form every quarter. On it you list all the amounts for which you have remitted IRPF. Did you make no payments with deductions in a quarter? Then you don't need to submit this form.‍
  
• ‍Form190: This is the annual statement aggregating all quarterly data (from Form 111). This way, the Inland Revenue knows exactly how much IRPF was withheld and remitted in total.
  

In this way, the whole process becomes clear: part of your income is withheld as an advance on your taxes, and your client makes sure that this amount is correctly passed on to the Inland Revenue.