Alba Serrano is an illustrator in Santander. Until 2025 she worked for Spanish publishers, which withheld 15 % from each invoice and spared her any calculation of payments on account. In 2026 her client list changed direction: she now illustrates for a publisher in New York, a video game studio in Seattle and a podcast in Chicago, and she invoices in dollars. In April her adviser asked her about Modelo 130, the quarterly income tax payment on account, for the first quarter. Alba replied that she had never filed it, because "tax was withheld". This year nobody withholds anything from her, and that changes several things at once.
One change of clients, four effects
Moving from Spanish to American clients affects VAT, withholding, payments on account and cash flow all at the same time. It is worth looking at them separately:
| Issue | With Spanish publishers | With clients in the United States |
|---|---|---|
| VAT on the invoice | 21 % (or the applicable rate) | Not subject if the client is a business (art. 69.One.1 of the VAT Law) |
| Income tax withheld on the invoice | 15 % (or 7 % when starting out) | No Spanish withholding: the payer is not a withholder in Spain |
| Modelo 130 | Exempt if at least 70 % of the previous year's income had tax withheld | Compulsory from the year after the one in which that 70 % is not reached |
| Possible withholding in the US | No | Depends on the documents you give the payer |
VAT, in two lines
If the client is a company with its seat in the United States, the service is not located in Spain and the invoice goes out without Spanish VAT; it is reported in the 303, the quarterly VAT return, as a transaction not subject to the tax. With private individuals the answer depends on the type of service. The full rules, with what to keep to prove who the client is, are in whether I have to charge VAT to a client in the United States. What matters here is another consequence: since no VAT is charged, invoices to the United States generate no output tax, but the VAT you bear on your purchases (materials, software, equipment) is still deductible, because article 94.One.2 of the Spanish VAT Law recognises the right to deduct for transactions carried out outside the territory where the tax applies that would give rise to that right if they had been carried out inside it. Your 303 may come out as a refund or a balance to carry forward.
The 130: exempt this year, compulsory the next
Article 109.2 of the IRPF Regulations exempts from payments on account professionals who, in the previous calendar year, had tax withheld or a payment on account made on at least 70 % of their income. Alba met that condition in 2025, so in principle she was exempt in 2026. But prudence advises against relying on that exemption when the current year changes completely: with no withholding at all in 2026, the whole year's tax will arrive in one go in the 2027 income tax return. And in 2027 there will be no doubt: with less than 70 % of income subject to withholding in 2026, the 130 will be compulsory.
The amount is set by article 110.1.a) of the same Regulations: 20 % of the net earnings accumulated from 1 January to the end of the quarter, less the payments on account for earlier quarters and the withholding borne.
Alba's year, quarter by quarter
We use an assumed exchange rate of 1 € = 1.10 USD for simplicity; in reality each invoice is converted at the rate for its tax point, as we explain in what exchange rate to use for an invoice in dollars.
- First quarter: invoices 15,000 USD = 13,636.36 €. Expenses: 2,000 €. Net earnings: 11,636.36 €.
- Payment on account for the first quarter, if Alba decides to make it early: 11,636.36 × 20 % = 2,327.27 €.
- Second quarter: invoices 18,000 USD = 16,363.64 €. Expenses: 2,000 €.
- Net earnings accumulated at 30 June: (13,636.36 + 16,363.64) − 4,000 = 26,000 €.
- 20 % of the accumulated figure: 5,200 €. Less what has already been paid (2,327.27 €): payment for the second quarter, 2,872.73 €.
- Spanish withholding to subtract: none.
In 2026 Alba may choose not to file them, but that saves her nothing: in the annual return she will have to pay the whole year's tax at once. In 2027, when the payments are compulsory, leaving them out may lead to surcharges or penalties for each quarter. How the two payments relate to each other is explained in what the difference is between the 130 and the annual return.
What to set aside each month
The other side of having no withholding is cash flow. With Spanish clients, the 15 % stayed behind along the way; now she receives everything, and it is easy to spend it. A practical rule is to put aside each month, in a separate account, a percentage of what is received that covers payments on account, the self-employed social security contribution and the difference that will come out in the annual return. The calculation with figures is in how much I need to set aside for Hacienda each month.
The US side: documents so that no tax is withheld
It is common for an American client, before the first payment, to ask for a form showing that you are not resident there. For an individual it is the W-8BEN, which we explain box by box in I have been asked for a W-8BEN. What withholding the payer applies if it does not receive it is a matter of US law and is confirmed by the client's adviser there.
If tax is withheld despite everything, in Spain you declare the full invoice and deduct what was withheld through the deduction for international double taxation, capped at your average rate. That calculation is set out in tax has been withheld abroad.
As a resident of Spain, what you invoice to New York or Seattle is income from your business, just like what you used to invoice in Madrid. It does not go into a special box and is not exempt because it comes from abroad. Nor does that change if the money stays in a dollar account without being converted. Leaving it out, wholly or partly, leaves income undeclared that can be adjusted with interest and, where appropriate, a penalty.
When the clients grow
If invoicing to the United States keeps growing, other questions will arise: whether a company is worth it, whether one of those clients wants to hire you as an employee, or whether it makes sense to be paid through a structure in the United States. Each has its own page: would a company work out better for me, I work for a single foreign company and I have an LLC in the United States. The guide to Modelo 130 explains the return in more detail.
You can send us the year's invoices and your returns through the form for self-employed people with international clients so that we can check whether your payments on account and your 303 reflect the change of clients.
How VAT, payments on account and the documents foreign clients ask for fit together is explained on the Salama Tax page on self-employed people with international clients.