If you are a professional invoicing a company or another autónomo, your invoice includes a withholding line calculated on the taxable base, not on the total including VAT. The client pays you the net amount and pays the withheld part to the tax agency on your behalf. When you start your activity there is a reduced rate for the first years, which you must state on the invoice for it to apply. If you invoice private individuals, there is no withholding.
The typical mistake is calculating withholding on the total including VAT, or combining VAT and withholding in the wrong order. Another common slip happens the other way round: when you are the one paying a professional, an employee or rent for business premises, you must withhold and pay that amount to the tax agency every quarter. Forgetting it leaves your business with a debt you did not expect.
Retención is related to rendimiento neto, the quarterly income tax prepayment and the annual return, where the withholdings you have borne are subtracted from your final tax. The payer reports them in quarterly forms and an annual summary. In kontora Verifactu invoicing adds the withholding line to your invoice and the accounts record it as a prepayment.
Guides that use this term
- Modelos 111 and 115: Spanish withholdings explained
- Registering as self-employed in Spain: the two procedures, in order and without fines
- Deferring or splitting a tax payment to Hacienda in Spain: how to apply, what can be deferred and what it costs
- How to fill in modelo 111 box by box: 2026 instructions with a worked example
- Modelo 130: paying your IRPF in advance as an autónomo
Related terms
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