15% withholding and form 130: when the self-employed lawyer must file instalment payments

A lawyer who practises on their own account and is taxed under the direct estimation method advances income tax (IRPF) to the Tax Agency during the year in two possible ways: the withholdings their clients apply and the instalment payments they file themselves with form 130. Knowing which one applies avoids overpaying, or underpaying, in the annual tax return.

Withholding on invoices

According to the Tax Agency, certain persons or entities must withhold when they pay certain income, including income from professional activities. The Agency itself offers a tool to check who must withhold, in which cases and in what amount. According to its table of rates:

• General rate: 15% for income from professional activities.
• New professionals: 7% in the year of start-up and the following two.

Since not all clients are obliged to withhold, the type of client affects how much income tax is advanced through withholding.

The specific conditions for applying the 7% are in the IRPF Regulation. It is wise to review them with an adviser before stating it on invoices.

Form 130 and the 70% rule

Form 130 is the quarterly self-assessment of income tax instalment payments for businesspeople and professionals under direct estimation.

The key rule for lawyers is this: according to the Tax Agency, instalment payments need not be filed when, in the previous year, at least 70% of the activity's income was subject to withholding or payment on account. In the start-up year, the 70% is calculated with the income of the quarter the payment refers to.

In practice:

• If in the previous year at least 70% of income had withholding, form 130 need not be filed.
• If it fell below that, it must be filed. It is wise to review the percentage every year, because it depends on the make-up of the client base.

How it is calculated

The instructions for form 130 set out the main steps:

1. Add up income minus deductible expenses accumulated from 1 January to the last day of the quarter.
2. Apply 20% to that net income. If the net income is negative, enter zero.
3. Subtract the positive instalment payments of previous quarters of the same year.
4. Subtract the withholdings borne in the period.

The result is what must be paid. If it is negative, it can be offset in later payments of the same year.

Two possible adjustments

• Low income: if the previous year's net income did not exceed €12,000, a reduction of between €25 and €100 per quarter applies, depending on the bracket. Up to €9,000, the reduction is €100.
• Main home: whoever acquired their main home before 1 January 2013 and meets the requirements can apply a deduction of 2% of the net income, with an annual limit of €660.14.

Calendar

If the last day falls on a Saturday or a non-working day, the deadline moves to the next working day. The next deadline, for the fourth quarter of 2026, ends on 30 January 2027.

Common mistakes

• Not checking the 70% every year. If the type of client changes, the obligation can change.
• Forgetting accumulated expenses. The calculation is cumulative from January: an expense not included in one quarter can be included in the next.
• Confusing instalment payments with social security contributions. Form 130 advances income tax. The self-employed contribution is another obligation, with its own brackets, which we explain in the guide to the self-employed contribution for lawyers.
• Mixing funds. Amounts the firm receives on the client's behalf, such as compensation collected for them, are not fees and must be handled separately. We tell you how in the article on client funds.

A well-made invoice helps

Stating the correct withholding rate on each invoice and keeping the detail of what was collected makes form 130 and the annual return easier. In addition, invoicing will have to adapt to the invoicing systems regulation before 1 July 2027, as we explain in the Verifactu guide for lawyers.

This article is informative and does not replace tax advice. More guides for those who practise on their own in Solo and small-firm lawyers.