IRPF withholding on freelancer invoices in Spain: when to apply it and how much

If you are self-employed in Spain (an autónomo) and you invoice companies or other professionals, part of every invoice never reaches your bank account. Your client keeps it back and pays it to the Spanish State on your behalf, as an advance on your personal income tax, the IRPF. That is the withholding, or retención. Getting it right matters: withhold too little and the difference lands all at once in your annual income tax; withhold too much and you are lending money you may need during the year.

This guide summarizes Spain’s national IRPF rules as they stand on October 18, 2026, with links to the official text in the BOE, Spain’s official gazette. It is general information, not professional advice: for your own situation, talk to your tax advisor or gestoría.

What withholding is and who does it

Withholding is a prepayment of your income tax. The payer deducts a percentage from what they owe you, pays you the rest and pays that percentage over to the State. For you it is not a cost: it is IRPF you have already paid, and it comes off what you owe later (article 99 of the IRPF Law).

Not every client has to withhold. Under article 76 of the IRPF Regulation, companies and other entities withhold, including homeowners’ associations, and so do self-employed people and professionals when they pay you as part of their business. A private individual who hires you for something at home does not.

Which activities carry withholding

It depends on what kind of activity you are registered for. Article 75 of the Regulation lists the business income subject to withholding:

• Professional activities. Broadly, those in sections two (professionals) and three (artists) of the Business Activities Tax (IAE) classification, such as law, architecture, engineering or economics. What counts is the IAE heading you registered under when you signed up as self-employed.
• A few specific cases. Teachers who give lessons at home or at the student’s home (running your own academy is a business activity), brokers who only bring the parties together, and authors or translators earning royalties (self-publishing counts as a business). Article 95.2 of the Regulation sets this out.
• Farming, livestock and forestry.
• Some business activities taxed under the flat-rate system (estimación objetiva, or módulos), covered below.

Other business activities, such as a shop, a bar or an online store, invoice without withholding. Rent on commercial premises and items like royalties or image rights have withholding rules of their own.

How much: 15% standard, 7% when you start

The standard rate: 15%

For professional activities, withholding is 15% of the gross income you are paid (article 101.5 of the IRPF Law and article 95.1 of the Regulation).

7% in your first year and the two after

When you start a professional activity, you can apply 7% in the year you start and in the following two years, as long as you did not carry out any professional activity in the year before your start date (article 95.1 of the Regulation).

Two examples for January 2027. If you registered in 2025, 2027 is your third year and you are still entitled to 7%. If you started in 2024, your reduced period ended on December 31, 2026, and from your first 2027 invoice the rate goes back to 15%.

The 7% rate is not automatic. You have to tell each client in writing that you meet the conditions, and the client has to keep that signed notice. The Regulation does not prescribe a template: a short letter with your name and tax ID (NIF or NIE), the date you started, a sentence stating that you did not carry out any professional activity the year before, the date and your signature is enough.

Other rates worth knowing

• 7% for municipal tax collectors, insurance intermediaries who work with external assistants, and sales agents of the state lottery operator (Loterías y Apuestas del Estado).
• 7% for certain artistic and cultural activities when, the year before, income from them was under €15,000 and made up more than 75% of the person’s business and employment income. The client must be told in writing here too.
• Ceuta and Melilla: when the income qualifies for the deduction in article 68.4 of the IRPF Law, rates are cut by 60%, so 15% becomes 6% and 7% becomes 2.8%.
• Farming and livestock: 2%, except pig fattening and poultry at 1%. Forestry: 2%.

When there is no withholding

The 1% list is in article 95.6 of the Regulation, by IAE heading. It includes, among others, metal carpentry, bricklaying and small building jobs, installations and fitting, plumbing, painting, plaster work, carpentry and locksmithing, road haulage and removals. If you work in one of them under the flat-rate system, check your heading.

How to show withholding on the invoice

Spain’s invoicing rules do not list withholding among the required details of an invoice (article 6 of Royal Decree 1619/2012). Even so, showing it is standard practice and avoids misunderstandings. The math has four steps:

1. Taxable base: the amount for your work, before taxes.
2. VAT, or IGIC in the Canary Islands, on the base.
3. IRPF withholding: the percentage of the base, not of the total including VAT. The VAT you charge is not part of your business income, as the official 2025 Renta practical manual explains (in Spanish).
4. Amount due: base, plus VAT, minus withholding.

You receive the amount due. Your client pays the withholding over to the State and, after year-end, has to give you a certificate of what was withheld (article 108.3 of the Regulation). Keep it with your invoices: you will need it for your Renta.

What the payer does with it

Your client does not keep that money. Under article 108 of the IRPF Regulation:

• Every quarter, they pay in what they withheld, within the first twenty calendar days of April, July, October and January. Large companies, among others, do it monthly.
• In January, they submit an annual summary of what they withheld from each person, with name and tax ID.
• Before the Renta season opens, they give you your withholding certificate.

If your client fails to withhold, or withholds too little, for reasons attributable only to them, you can still deduct the amount that should have been withheld in your Renta (article 99.5 of the IRPF Law). Even so, the practical move is to get the withholding right on the invoice from the start.

And if you also pay professionals, say a designer or a lawyer, these obligations become yours. It is one of the tasks a gestoría usually handles.

What withholding means for your own payments

The withholding your clients apply comes off your IRPF: first in your quarterly installment payments (pagos fraccionados) and then in your annual Renta.

One rule is worth knowing. If at least 70% of the income from your professional activity carried withholding in the previous year, you do not have to make installment payments for that activity (article 109.2 of the Regulation). If you have just started, the percentage for the period itself is what counts (article 109.5).

Choosing 7% when you qualify is mostly a liquidity decision: you collect more on each invoice but prepay less tax, so the difference may show up in your Renta. Run the numbers with your advisor and set aside what you will need.

Canary Islands, La Palma, Ceuta, Melilla, the Basque Country and Navarre

In the Canary Islands, IRPF withholding rates are the same as in the rest of Spain’s common tax territory: 15% and 7% do not change. What changes on the invoice is the indirect tax, IGIC instead of VAT, and withholding is still calculated on the base.

The recent exception is La Palma. After the 2021 eruption, residents can apply the deduction designed for Ceuta and Melilla and, with it, the 60% cut in withholding rates. Royal Decree-law 23/2026 extended it through 2026. If you invoice from La Palma in 2027, check with your advisor whether it has been extended again.

Ceuta and Melilla keep the 60% reduction described above. The Basque Country and Navarre have their own regional IRPF rules: if you are taxed there, check them before setting your rate.

Five common mistakes

• Calculating withholding on the total including VAT. It goes on the base.
• Staying on 7% in your fourth year. Check in January which year of activity you are in.
• Applying 7% without telling the client. Each client needs your signed notice.
• Withholding on a private individual, or dropping it for a company because they ask. Whether it applies is set by law, not by agreement.
• Not asking for the withholding certificate. Without it, your Renta is harder to square.

Invoicing with withholding in UTILIA OS

In UTILIA OS, invoices carry VAT or IGIC and withholding, and the tax settings you need to invoice cover your tax regime, VAT or IGIC, and withholding. See how it works on the invoicing page and compare plans on pricing.

Accounting and taxes inside UTILIA OS are coming soon; in the meantime, your accountant or gestoría keeps doing your books and taxes.

UTILIA OS and its AI do not replace professional advice from your tax advisor, accountant, lawyer or financial analyst.