IRPF on Services
There are many transactions where withholding tax should be applied. Two of the most common forms of IRPF deductions are those relating to rental of property as seen in the previous section, and those relating to services provided by certain professional sole traders. Let’s consider a further example for this type of expense:
| Purchase invoice - Professional Services | ||||
|---|---|---|---|---|
| Invoice | Our money | VAT - Tax office money> | IRPF - Tax office money | |
| € | € | € | € | |
| Services | 1,500 | -1,500 | ||
| VAT @ 6% | 240 | -240 | ||
| IRPF @ 15% | -225 | 225 | ||
| 1,515 | -1,500 | -240 | 225 | |
Again, for the purposes of our profit calculation VAT and IRPF can be ignored:
| Profit and loss account | |
|---|---|
| € | |
| Sales | 3,000 |
| Expenses | -2,700 |
| Profit / (Loss) | 300 |