Pricing and Taxes
Understand how Frihet calculates prices, applies taxes, and manages withholdings. Each invoice line item has its own tax logic.
Price Structure
Frihet differentiates between three key concepts:
Unit Price (Taxable Base)
The price without taxes:
- It is the amount on which VAT/IGIC is calculated
- It is the amount declared on tax invoices
- It is the one that changes when you update a product
- Example: 1,000 EUR
VAT/IGIC (Indirect Tax)
Added to the price:
- VAT 21%: Most services and products
- VAT 10%: Some food, transport, lodging
- VAT 4%: Books, magazines, newspapers
- IGIC 7%: Canary Islands (replaces VAT)
- IPSI: Ceuta and Melilla
- Exempt: No tax (e.g., financial services)
Calculation:
Base price: 1,000 EUR
VAT 21%: + 210 EUR
Client total: 1,210 EUR
The invoice shows both the base price and the VAT broken down.
IRPF (Withholding Tax)
Subtracted from the price for certain services:
- 15%: Services from self-employed professionals
- 19%: Technical, artistic work, consulting
- 21%: Management and administration activities
- Exempt: Most products
Calculation:
Base price: 1,000 EUR
VAT 21%: + 210 EUR
IRPF 15% (withholding): - 150 EUR
Client total: 1,060 EUR
(Frihet withholds 150 EUR for the Tax Agency)
On the invoice, it appears as "IRPF withholding" or "income tax withholding".
Calculation per Line Item
Each invoice line item has its own tax regime:
Example 1: Physical Product with VAT
Product: Samsung Monitor
Quantity: 2
Unit price: 200 EUR
Subtotal: 400 EUR
VAT 21%: 84 EUR
Line total: 484 EUR
Frihet sums all line items for the invoice total.
Example 2: Service with VAT + IRPF
Concept: Web Development (30 hours)
Price/hour: 50 EUR
Subtotal: 1,500 EUR
VAT 21%: 315 EUR
IRPF 15%: -225 EUR (withholding)
Line total: 1,590 EUR (1,500 + 315 - 225)
Your client pays 1,590 EUR. Frihet withholds 225 EUR of IRPF for settlement.
Example 3: Tax-Exempt Service
Concept: Financial Consulting
Subtotal: 800 EUR
VAT: Exempt (0%)
IRPF: Exempt (0%)
Line total: 800 EUR
No taxes or withholdings.
Applying Taxes on Invoices
By Product (Default)
Each product in your catalog has taxes configured:
- You create product "Web Development": VAT 21%, IRPF 15%
- You add it to an invoice
- Frihet automatically applies those taxes
Modify per Line Item
If you need to change for this specific invoice:
- On the invoice, click on the line item
- Open Taxes (collapsible section)
- Change VAT: 21% → 10%
- Change IRPF: 15% → 0% (e.g., foreign client exempt)
- It recalculates automatically
This change only affects this invoice. The product retains its original configuration.
Discounts
Discounts are applied before calculating taxes:
Original price: 1,000 EUR
Discount 10%: - 100 EUR
Taxable base: 900 EUR (base for VAT)
VAT 21%: + 189 EUR
Total: 1,089 EUR
Types of Discounts
Line-item discount:
Applicable to each product. Appears as % or absolute EUR:
Development: 1,500 EUR
Discount: -10% (150 EUR)
Subtotal: 1,350 EUR
Global discount (full invoice):
Applies to the total before summing VAT:
Invoice subtotal: 5,000 EUR
Discount 5%: -250 EUR
Taxable base: 4,750 EUR
VAT 21%: +997.50 EUR
Total: 5,747.50 EUR
Discounts vs. Complimentaries
- Discount: Reduces the price, appears on the invoice, client sees the reduction
- Complimentary: Free line item (e.g., referral gift). Appears as a product with 0 EUR
Use discounts for public negotiations. Complimentaries for internal gifts.
Quantity and Unit Price
Frihet applies:
Line total = Unit price × Quantity
But allows dynamic changes:
Example: Variable Quantity
Product: Senior Developer
Quantity: 3.5 hours (you can enter decimals)
Price: 80 EUR/hour
Subtotal: 280 EUR
Allows working with hours, fractional days.
Change Price on Invoice
If a client negotiates a special price:
- On the invoice, select the line item
- Edit Unit price: 1,200 EUR → 1,050 EUR
- It recalculates automatically
The change is only for this invoice. The base product is not modified.
Different VAT Rates
On the same invoice, different rates can coexist:
Line 1: Book 50 EUR (VAT 4%) → 52 EUR
Line 2: Consulting service 1,000 EUR (VAT 21%) → 1,210 EUR
Line 3: Software 500 EUR (VAT 21%) → 605 EUR
─────────────────────────────────────────────────────
Subtotal: 1,550 EUR
VAT 4%: 2 EUR
VAT 21%: 345 EUR
Total: 1,897 EUR
Frihet automatically groups by rate in the tax breakdown.
IGIC (Canary Islands)
If you are in the Canary Islands:
- Frihet automatically replaces VAT with IGIC
- Rate: 0%, 3%, 7%, 9.5% (according to the Canary Islands Tax Agency)
- VAT and IGIC cannot be mixed on the same invoice
Frihet detects the client's region and applies it automatically. If there's an error, edit it on the invoice.
IPSI (Ceuta/Melilla)
In Ceuta and Melilla:
- IPSI replaces VAT
- Rates: 0%, 4%, 8%, 12% (depending on the product)
- Applies only if the client is in those autonomous cities
IRPF Withholding Tax
When it Applies
Withholding is mandatory for:
- Services from self-employed professionals (15%)
- Technical work (19%)
- Some specialized services (21%)
Does NOT apply to:
- Physical products (no IRPF)
- Services from companies with CIF (except for exceptions)
- Services for foreigners
Calculation
Frihet withholds automatically:
Base price: 1,000 EUR
IRPF 15% (withholding): -150 EUR
Client pays: 1,000 EUR
Frihet delivers to Tax Agency: 150 EUR (annual settlement)
Withholding is not an additional cost for the client. It is deducted from the price.
Annual Settlement
At the end of the fiscal year:
- Frihet sums all IRPF withholdings made
- Generates Annual Withholding Summary
- You use it in your Income Tax (IRPF)
- You declare the total withheld on form 130/100
Example:
Withholdings made in 2026:
Jan: 150 EUR
Feb: 150 EUR
...
Dec: 150 EUR
TOTAL: 1,800 EUR
(Appears in net amount to be received on form 130)
Equivalence Surcharge (Retail Professionals)
If you are a distributor with an equivalence surcharge:
- Go to Settings > Tax Regime
- Select Equivalence surcharge
- Frihet adds an additional % after VAT:
Price: 100 EUR
VAT 21%: 21 EUR
Surcharge 1.4%: 1.40 EUR
Total: 122.40 EUR
The surcharge appears separately on the invoice.
Special Withholding Taxes
Some clients (public administrations) require additional withholding:
- Administrations: 3% mandatory
- Telecom: Special withholding if applicable
In Settings > Special Taxes, enable if necessary.
Export Tax Breakdown
For auditing and declarations:
- Go to Reports > Tax Breakdown
- Date range
- Download Taxes Paid (VAT/IGIC)
- A breakdown by rate is generated:
VAT 21%: Total invoiced: 10,000 EUR, Tax: 2,100 EUR
VAT 10%: Total invoiced: 2,000 EUR, Tax: 200 EUR
VAT 4%: Total invoiced: 500 EUR, Tax: 20 EUR
IGIC 7%: Total invoiced: 1,500 EUR, Tax: 105 EUR
─────────────────────────────────────────
Total VAT/IGIC collected: 2,425 EUR
Use it to fill out form 303 (quarterly VAT).
Regulatory Changes
If the Tax Agency changes VAT rates:
- Frihet notifies on the dashboard
- Automatically updates available rates
- New invoices use new rates
- Old invoices: historical prices (auditing)
Common Issues
"Client is foreign, what VAT do I apply?"
Depends on the service:
- Digital services to EU: Client's VAT (reverse charge, Frihet marks it)
- Services outside EU: 0% VAT
- Physical products: Varies according to customs
On the invoice, select VAT exempt and note "Export/Foreign service".
"I changed VAT on a product, but the old invoice doesn't update"
By design. Completed invoices have historical prices. It's for auditing. Create a credit note if you need a correction.
"I have IRPF and VAT, how does it work?"
Both apply:
Base: 1,000 EUR
+ VAT 21%: +210 EUR
- IRPF 15%: -150 EUR (on base)
= Total: 1,060 EUR
Client pays 1,060 EUR. Frihet settles IRPF separately.