Spanish freelancers hit by invoicing date rule: paying tax before getting paid

Paying VAT before getting paid? The absurdity of the invoicing date rule

Why does the Spanish tax agency require VAT to be declared on an invoice before the money has even arrived? It's the question every freelancer with clients paying at 60 or 90 days asks themselves. The rules require the invoice to be recorded in the quarter it was issued, not when it was paid, forcing freelancers to pay VAT upfront and, in many cases, income tax too. The result: a liquidity gap that can reach 20,000 euros for an average professional, according to recurring estimates in the sector.

The problem is made worse by the usual client delays. While the large company pays whenever it wants, the freelancer has already handed over to the tax office money they haven't yet received. Some opt for a heterodox solution: issuing only proforma invoices and billing after payment, a date fraud tolerated out of sheer necessity to survive. Others, meanwhile, are calling for a system like the French one, where VAT is only settled when the client pays.

Technology offers patches: software that automates the calculation of quarterly tax returns for around 12 euros a month, but it doesn't solve the underlying issue. The general feeling is that the system is designed to discourage self-employment, as one line of thinking puts it: the more freelancers give up, the more people depend on the state. Meanwhile, the freelancer keeps advancing money to a tax authority that won't wait. The ironies of an administration that demands punctuality from those who aren't paid punctually.