Category II IRPF covers, among other income, independent work performed by resident individuals outside an employment relationship. DGI currently states that independent workers are within scope when total monthly income excluding VAT exceeds 7 BPC, although the effective tax depends on the applicable computation and deductions.
Why it is not a percentage of each invoice
DGI's calculation includes specific rules, including a deemed 30% expense deduction and certain personal or social-security deductions. Client withholdings may also reduce the amount payable.
Records to keep
- Income excluding VAT by period.
- IRPF withheld by customers.
- Eligible social-security and other deductions.
- Advances and other payments made to DGI.
BPC values, brackets and filing dates change. Use the parameters for the tax year you are actually settling.
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