As a self-employed worker, you’re the main character in your working life — but that comes with responsibilities. You are ultimately in charge of all your invoicing and tax filings. That means checking you’re on top of all your client’s fiscal details, your own tax deductions, and a few extra complex details just to muddy the water.
Clearly, knowing how to invoice as a freelancer in Spain is no walk in the park, but at Xolo, we’re here to help. Our simple guide on how to get your invoices done quickly and efficiently while staying fully compliant. Throughout this article, you’ll also find some tips and tricks that look beyond the basics and help you go from zero to invoicing hero in no time.
We’ll cover everything from the first steps to take as a solo before moving on to the what, how and when of Spanish invoices, and how to deal with clients from the EU and the rest of the world.
To kick things off, we’ll first make sure you’ve covered all your bases that allow you to work as a freelancer in Spain. Before you can start invoicing, you first need to check off the following steps:
Once you’re set up and ready to work, we’d strongly recommend you to agree on a payment method and timeframe with your client in advance. You can include a reminder of this on each invoice you send out, but it’s always best to have expectations in place long before the end of the month.
Spain invoice requirements say nothing specific about when you have to send your invoices. That leaves it up to a mutual invoice sending and payment deadline agreement between you and your clients. Most agreements depend on the kind of work you provide and what is most convenient for both parties.
For project-based gigs, most solos send a single invoice once everything is done, reviewed, and approved. However, if you’re handling a particularly long job, you might want to keep your bank balance healthy by sending an invoice once you’ve completed half of the work.
Providers working on a retainer or supplying repeated jobs usually send an invoice at the end of every month. This format keeps your finances topped up regularly and reduces the impact of any late payments.
For this section, we’ll assume you’re beyond writing out your invoices by hand and focus on electronic versions. For example, many freelancers in Spain use data entry tools like Microsoft Excel or Google Docs to create their invoices.
This route is at least more efficient than manually creating each invoice from scratch, as you can use formulas to calculate your income and value added tax. With these formulas, you can save a Spanish invoice template and copy and paste it when you need to write up a new invoice.
From a safety perspective, you can export each file as a PDF to avoid any changes being made after you’ve sent it by email. But on the flipside, you leave yourself open to mistakes in your formulas and a format that is far from pretty.
To speed up the process and reduce human error to a minimum, more and more freelancers and solopreneurs are turning to online platforms like Xolo to automate their invoices. Rather than being responsible for every small detail, you enter only what is relevant for each job and the algorithms take care of everything else. This is especially useful for staying compliant with foreign customers, and it can save you a day of admin per month no matter what your situation.
As a final note — some clients will provide an automated invoice platform for you to fill in. That’s all great, but do remember to save a copy for yourself to provide to the tax authorities.
Let’s be honest, this is probably what you’ve come here for. Faced with a blank page and your clients on your back to bill them ASAP, you need a quick and easy guide for what to include on a Spanish invoice.
So without further ado, when creating an invoice as a freelancer in Spain, make sure to include the following points:
The invoice number you include should follow a sequential order, i.e. your first job is 1 and each subsequent invoice rises in chronological order.
Just as your invoice numbers increase sequentially, your dates should follow in the same way. Therefore, make sure to check your dates on the day you send each invoice and avoid disagreements in the order of your invoice numbers and issue dates.
As the supplier, you need to include three details on all your invoices:
The customer details you include on your invoice should mirror your own information, but with any extra mercantile details of the company or individual.
When including your services on a Spanish invoice, it’s usually as simple as writing the title of your project or task in a way that is clear enough for everyone involved to recognize.
However, we’d recommend first talking to your client to check any requirements they have. For example, companies often approve a quote and issue a purchase order number for you to include on the invoice. By confirming these details early on, you can avoid the minefield of correcting invoices at a later date.
Your total amount for services is one of the more straightforward sections — all the costs of the services you provided added together. For single projects, you don’t even need to do any addition. This is the base figure that you will use to calculate your tax contributions in the following two sections.
Almost all professional services come with a standard VAT rate of 21%. Solos need to include this on their invoices in addition to the total amount charged for services. If you’ve never created an invoice as a freelancer in Spain, don’t worry that this seems to be an extra fee — any experienced client will expect it.
As is the case in many countries around the world, there are a series of activities that are exempt from VAT on Spanish invoices, including:
Certain activities, such as new-build properties and transport services also qualify for a reduced VAT rate of 10%, while a super-reduced rate of 4% applies to items such as basic foods, newspapers, and subsidized housing.
One key piece of advice for freelancers in Spain: Don’t spend your VAT payments!
Although any VAT on your invoice will arrive in your account, it’s crucial to remember that it’s not your money. So to avoid a shock at the end of every quarter, set aside the VAT in your account and make it available to the tax authorities when your bill is due.
Want to know more about your value added tax obligations? Head over to our VAT Guide for Freelancers in Spain.
The standard income tax rate to invoice as a freelancer in Spain is 15%, which Spanish client companies pays to the tax office on your behalf.
It’s highly unlikely that you’ll owe exactly 15% in income tax over the period of a trimester — and much more likely that you’ll owe over that percentage. Therefore, you’re stuck with paying 15% directly and making up the difference on your quarterly tax returns.
Spain offers newly self-employed workers a reduction on their IRPF to help get their business off the ground. Remember that this is optional, and you will still have to pay the appropriate level for your annual earnings on your tax return the following year.
The total payable is the amount of money to be transferred to you. Put simply, it is the total amount for services, plus VAT, minus income tax. If you’re using spreadsheets to create your invoice, you can write up formulas that quickly add up all the figures on your sheet and generate your total payable. However, platforms like Xolo save you a lot of time, formulas, and potential errors by taking care of all your finances automatically.
Including your payment method is not required by law, but we’d recommend including it to remove any barriers that could cause late payment. Agree on your preferred method with your client well in advance of your invoices and forget about the stress when it comes to the end of the month.
Freelancers working with Spanish companies usually go for a direct bank transfer, so include a brief sentence, display your IBAN, and set the timeframe you expect to receive payment.
When creating an invoice as a freelancer in Spain for customers in other EU countries, you first need to gain formal permission by filling in form 037 and becoming part of the Register of Intra-community Operators (ROI, in Spanish). As long as both you and your client are registered with a ROI number, your invoices shouldn’t include VAT. Any VAT payments applicable are the responsibility of your client in their own country.
Turning our attention to income tax, we can’t expect companies or individuals in other countries to take care of what we owe. Therefore, you need to take a look at your quarterly earnings. If under 70% of your earnings has had income tax deducted from it (that 15% on your invoices to Spanish companies), you’ll have to file a form 130 to make your personal income tax payments.
The main difference between invoices sent to EU-based clients and those outside the Union is that for non-EU clients, you don’t need to be part of the Register of Intra-community Operators.
Like EU-based clients, when dealing with companies and individuals outside the EU, you should not include VAT or IRPF on your invoices. However, you will have to file your taxes at the end of the trimester if earnings you haven’t paid income tax on exceed 70% of your overall income.
One of the trickiest parts of creating invoices for clients outside the EU is deciding how to convert your currencies. You can issue Spanish invoices in any currency, as long as it is clearly marked on the document. Choosing which currency to use is something you should decide with your customer in advance so you can get the lowest conversion commission possible and keep a hold of your hard-earned money.
If all of that sounds complicated, you’re not alone. Even when you know every step of the way, there are all kinds of hazardous pitfalls that can get you into serious difficulty. From getting your VAT right for each client to keeping track of all your records in a simple, secure place, knowing how to invoice as a freelancer in Spain is a time-consuming process that can eat up valuable days when you could be earning.
Xolo saw all of this inefficiency back in 2012 and set out on a mission to change it. With an automatic invoice generator, VAT calculator, and more on one super user-friendly platform, you can save yourself hours of bureaucracy per month.
Sound too good to be true? Head to our homepage to see why over 120,000 solos have already turned to Xolo to ease the administrative headache.
Recibe las últimas noticias y nuestros consejos
para vivir una mejor vida freelance directamente en tu email.