Employees have income tax withheld from their payslip. Freelancers (mostly) do not, so the Spanish tax agency asks for a quarterly advance: that is form 130, the income tax instalment. It is not an extra tax — it is an advance on the annual return you will file the following year.
Who must file it?
Freelancers under direct assessment (normal or simplified). The main exception: if you are a professional and at least 70 % of your income in the previous year carried withholding, you may be exempt — your clients already advance the tax for you on each invoice.
How it is calculated (cumulative, not quarterly)
The detail that confuses most people: each quarter is calculated on figures accumulated since 1 January, not just the quarter's.
- 1. Cumulative net profit = income − deductible expenses for the year to date.
- 2. Under simplified direct assessment, also subtract hard-to-justify expenses (5 % as a reference, capped at €2,000/year).
- 3. Apply 20 % to that base.
- 4. Subtract withholdings borne and instalments already paid in previous quarters.
If the result is negative, you pay nothing (and get nothing back: it stays at zero and the excess shows up later in the annual return). There is also an extra reduction if your previous year's profit was low (≤ €12,000, as a reference). Run your numbers in the form 130 calculator.
When it is filed
On the same deadlines as VAT: from the 1st to the 20th of April, July and October, and from the 1st to the 30th of January for the fourth quarter. See the tax calendar.
20 % is not your real rate
The 20 % is only the advance percentage. Your final income tax is settled in the annual return using the bracket scale (19 % to 47 % on the reference combined scale, which varies by region) and your personal circumstances. Advance too much and the return comes back in your favour; too little and you pay the difference. That is why estimating the full year — not just the quarter — pays off.
Common mistakes
- Calculating with the quarter's figures instead of the cumulative year.
- Forgetting to subtract instalments already paid (you would pay twice).
- Skipping a "zero" or negative filing when due (the obligation remains).
- Confusing the 20 % advance with your final tax rate.
