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Why not? VAT is typically charged to customers and then compensated with the VAT you pay if you as a freelancer have expenses. For instance in Spain I have to
by xondono 5y ago
Why not?
VAT is typically charged to customers and then compensated with the VAT you pay if you as a freelancer have expenses.
For instance in Spain I have to increase my clients invoices by 21%, but if those invoices are for software, you have almost no purchases to offset that, so I need to pay that 21% quarterly.
So to earn 50k€ in net terms, I would need to charge 25k€ extra just on income tax, plus 3.5k€ on direct taxes on freelancing (because Spain), plus 21% VAT.
It’s no wonder the south of Europe does poorly.