Taxes

Frihet supports the main Spanish and territorial taxes. Here you will learn how to configure and apply them correctly on your invoices.

Supported Tax Types

VAT (Value Added Tax)

The main tax in Spain. Frihet supports:

Type	Percentage	Application
General	21%	Services, products, most cases
Reduced	10%	Hospitality, food, certain services
Super-reduced	4%	Medicines, books, newspapers
Exempt	0%	Financial services, education, public health

IGIC (Canary Islands General Indirect Tax)

For companies in the Canary Islands (replaces VAT):

Type	Percentage	Application
Zero rate	0%	Exempt activities
Reduced	3%	Basic services, food
General	7%	Most goods and services

IPSI (Tax on Production, Services, and Imports)

For Ceuta and Melilla (replaces VAT):

• Percentages similar to IGIC
• Automatically applied if your tax address is in Ceuta/Melilla

IRPF (Personal Income Tax)

Withholdings applied to professional services:

Type	Percentage	Application
General services	15%	Consulting, advisory, design
Liberal professions	19%	Lawyers, accountants, architects
Artistic activities	7%	Musicians, graphic designers
Construction	3%	Work, renovation
Leases	19%	If you rent real estate
Economic activities	1%	Other activities

Equivalence surcharge

For distributors and assimilated operators:

VAT Type	Surcharge
4%	0.5%
10%	1.4%
21%	5.2%

It is added to VAT, not replaced by it.

Configure Taxes

Access Settings

1. Go to Settings → Taxes
2. You will see all available taxes according to your tax zone

Automatically Detect by Location

When you create your account or change your tax address:

1. Go to Settings → Company
2. Specify your address
3. Frihet automatically detects:
   • If you are in Spain (VAT)
   • If you are in the Canary Islands (IGIC)
   • If you are in Ceuta/Melilla (IPSI)
4. Taxes are updated automatically

Disable Taxes

If they do not apply to your business (e.g., VAT exemption):

1. Go to Settings → Taxes
2. Disable those you don't use
3. They will not appear in the selector when creating invoices

Apply Taxes on an Invoice

VAT per Line Item

Each item/service line has its own VAT type:

1. In the invoice form, go to each line item
2. In the VAT Type field, select:
   • 21% (standard)
   • 10% (reduced)
   • 4% (super-reduced)
   • 0% (exempt)
3. Frihet automatically calculates the tax

Calculation:

Line: Web Consulting
Quantity: 1
Unit price: €1,000
VAT Type: 21%

Line subtotal: €1,000
VAT (21%): €210
Line total: €1,210

Total Taxes on Invoice

Frihet automatically sums all VAT by type:

Line items:
  - Consulting (21%): €1,000 → VAT €210
  - Design (10%): €500 → VAT €50
  - Book/reference (4%): €100 → VAT €4
  - Financial service (0%): €100 → VAT €0

Subtotal: €1,700

VAT breakdown:
  - VAT 21%: €210
  - VAT 10%: €50
  - VAT 4%: €4
  - Total VAT: €264

Total invoice: €1,964

IRPF (Withholdings)

If withholding applies to your work:

1. On the invoice, go to the Withholdings section
2. Check Apply IRPF
3. Select percentage according to your profession
4. Frihet automatically deducts from the total

Calculation:

Services: €1,000
VAT (21%): €210
Subtotal: €1,210
IRPF (15%, on base): -€150
Total payable: €1,060

Note: The client pays you €1,060, and withholds €150

Equivalence Surcharge

If you are a distributor:

1. On the invoice, go to Advanced options
2. Check Apply equivalence surcharge
3. It is automatically added to the VAT

Calculation:

Product: €100
VAT (21%): €21
Surcharge (5.2%): €5.20
Total: €126.20

Special Cases

Intra-community Services

If you sell services to a company in another EU country:

1. The client must be a business owner/professional
2. You need their VAT ID (European VAT number)
3. On the invoice, check Intra-community operation
4. Apply 0% VAT (client's responsibility)

Exports outside the EU

If you sell to clients outside the EU:

1. Check Export/outside EU
2. Apply 0% VAT
3. You need customs documentation

Operations with the Canary Islands

If your company is in mainland Spain and sells to the Canary Islands:

1. Ask Hacienda if 0% VAT or IGIC applies
2. Varies by product type
3. When in doubt, contact an advisor

Regulatory Changes

If there is a change in VAT rates (e.g., rises from 21% to 23%):

1. Frihet maintains a history of rates by period
2. It will automatically use new rates on new invoices
3. Old invoices maintain their original rate

Tax Reports

Go to Reports → Taxes for:

Summary by Type

VAT 21%:    €5,234 taxable base | €1,099 VAT
VAT 10%:    €1,000 taxable base | €100 VAT
VAT 4%:     €500 taxable base   | €20 VAT
VAT 0%:     €200 (exempt)         | €0 VAT

Total accrued VAT: €1,219

By Period

Filterable by month, quarter, or year. Important for:

• Quarterly VAT return
• Issued invoice book
• Justification to Hacienda

IRPF Paid

IRPF withholdings applied: €3,450
Invoices with withholdings: 23

Average withholding: €150

Equivalence Surcharge

Total surcharge applied: €87.50
Number of transactions: 50

Quarterly Tax Returns

Frihet automatically calculates your quarterly tax models based on your invoices and expenses. The available models depend on your tax zone:

• Peninsula and Balearic Islands: Model 303 (VAT) + Model 130 (IRPF)
• Canary Islands: Model 420 (IGIC) + Model 130 (IRPF)
• Ceuta and Melilla: Model 130 (IRPF)

For more information, consult the Quarterly Tax Models section.

Audit Tax Calculations

If you need to review manual calculations:

1. Open an invoice
2. Click on View tax breakdown
3. The calculation formula is displayed:

   Taxable base: €1,000
   × VAT 21%: €210
   = Total: €1,210

Exemptions and Special Cases

Insurance Company

• Insurance operations: 0% VAT
• Insurance consulting: 21% VAT (generally)

Healthcare Activities

• Healthcare services: 0% VAT
• Medicines: 0% VAT
• Optics: 0% VAT
• Medical equipment: 0% or 4% VAT

Education

• Classes and courses: 0% VAT
• School supplies: 0% or 10% VAT
• Books: 4% VAT

Transportation

• Passenger transport: 4% VAT
• Cargo: 10% VAT
• Logistics services: 21% VAT

Tip: If you are unsure of the applicable type, consult a tax advisor. Frihet allows you to manually change the type before sending.

Quarterly VAT Return

Frihet automatically calculates your quarterly return with official fields:

1. Go to the Tax Calendar
2. Select quarter and year
3. Frihet shows the complete breakdown:
   • Accrued VAT by type (21%, 10%, 4%)
   • Deductible VAT (expenses with VAT)
   • Special operations (exempt, exports, intra-community, ISP)
   • Settlement result
4. Download the PDF as a reference for your advisor

This is not the official return (you must submit it at the AEAT headquarters), but it calculates all fields to facilitate the process.

For a complete detail of the calculation, consult the Model 303 documentation.

Common Errors

❌ Mixing VAT with IRPF

These are different taxes:

• VAT: What increases the price for the client
• IRPF: What the client withholds from your payment

For liberal professionals: Both apply.

Correct:

Services: €1,000
VAT (21%): €210
Subtotal: €1,210
IRPF (15%, on €1,000): -€150
Total: €1,060

❌ Applying Reduced VAT to General Services

10% VAT is for:

• Hospitality (food/drink)
• Some transportation
• Repairs

Do not use for consulting, design, development (these are 21%).

❌ Forgetting Surcharge if you are a Distributor

If your regime is "Equivalence Surcharge", you must apply it. It is not optional.

Contact Tax Authorities

If you have doubts about which tax applies:

1. Consult your tax advisor (recommended)
2. Or contact the Tax Agency (+34 901 333 555)
3. Or use the online simulator: aeat.es

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