What withholding should self-employed workers apply?

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Income tax withholdings are advances to the Treasury, amounts of money advanced to the Tax Agency in anticipation of the expected result in the income tax return.

Self-employed persons engaged in professional, agricultural, livestock and forestry activities, as well as some modular activities, must apply the following withholding percentages to their invoices:

1. IPRF withholdings that self-employed workers must make on their invoices
Professional activities:
Since July 12, 2015, the minimum withholding to be applied is 15%.

New self-employed workers in professional activities:
Since July 12, 2015, the minimum withholding to be applied is 7% in the year of commencement of the activity and the following two years.

Some activities in objective estimation (modules):
In these cases, the minimum withholding to be applied is 1%. You can consult your manager if your case falls into this category.

Pig fattening and poultry farming activities:
In these cases, the minimum withholding to apply is 1%.

Agricultural activities and other livestock activities:
In these cases, the minimum withholding to apply is 2%.

Forestry activities:
In these cases, the minimum withholding to apply is 2%.

Self-employed persons registered in business activities, which are those included in the first section of the Tax on Economic Activities (IAE), must not make withholdings on their invoices.

2. IRPF withholdings that must be applied if they have employees
These are the deductions that must be made from workers' paychecks. The amount of the deduction will depend on the amount that the worker receives and personal south korea number data circumstances such as the number of children, whether the worker is married, whether he or she has a mortgage or the type of contract. This information must be provided by the worker using form 145.
To find out the percentage to be deducted, it is necessary to use the AEAT help program found on its website.

3. Income tax withholdings on rentals
If your business is located in rented premises or offices, the percentage you must pay to the Treasury is, as of July 2015, 19.5%. It is our obligation to make the payment to the Treasury even if the amount withheld is not reflected in the receipt.

4. Other IRPF withholdings
There are other withholdings that could affect the activity of a self-employed person in very specific cases: income from intellectual property (19%); leasing of movable property, businesses, mines; income from the transfer of image rights (19%) and income from movable capital (for example, dividends), currently at 19%.

In Holded, you can specify the default IRPF withholding for your account in the “Settings / Preferences” section, or modify it in each of your invoices.

If you have any other questions about applying withholdings in Holded, do not hesitate to use the free support button. We will be happy to help you!