# 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)](/cumplimiento/modelo-303) + [Model 130 (IRPF)](/cumplimiento/modelo-130)
- **Canary Islands:** [Model 420 (IGIC)](/cumplimiento/modelo-420) + [Model 130 (IRPF)](/cumplimiento/modelo-130)
- **Ceuta and Melilla:** [Model 130 (IRPF)](/cumplimiento/modelo-130)

For more information, consult the [Quarterly Tax Models](/cumplimiento/modelos-fiscales) 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](https://sede.agenciatributaria.gob.es)), but it calculates all fields to facilitate the process.

For a complete detail of the calculation, consult the [Model 303](/cumplimiento/modelo-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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