Withholding Tax on Professional Fees in 2026: When It’s 15%, When It’s 7%, and How to Report It

If you invoice as a self-employed professional (consultant, lawyer, architect, trainer, designer, advisor…) or if you run a business that pays this type of invoice, you’ve probably wondered at some point why some invoices carry a withholding and others don’t, or why the rate shifts between 15% and 7%. The answer lies in personal income tax: when a professional provides services to another business or self-employed person (not to a private individual), the rules require part of the tax that professional will eventually owe on their income tax return to be “paid in advance.” That advance payment is the withholding, and in 2026 it still moves between two rates: the standard 15% and the reduced 7%.

The standard 15% and the 7% new-business rate: when does each apply?

The general rule for income from professional activities is a 15% withholding on the invoice’s taxable base (the amount before VAT). It applies whenever the payer is a business or professional required to withhold and the payee is acting as a professional, rather than as a trader or provider of services not subject to withholding.

The reduced 7% rate is an exception designed for those just starting out: it applies in the year the professional begins their activity and in the following two years, provided they haven’t carried out any professional activity in the year before registering. Once that three-year window (the start year plus the following two) has elapsed, the invoice automatically reverts to 15%, with no additional paperwork required — it’s up to the professional to tell their client that the reduced rate no longer applies, since the payer has no way of knowing this on their own.

One common nuance: if you re-register as a professional after a period of inactivity, you don’t automatically get the 7% rate back unless you genuinely didn’t carry out that professional activity in the year immediately before the new registration. And if you combine professional activity with a different business category, it’s worth checking case by case which rate applies to each invoice.

How to report it: Form 111 (and the annual summary, Form 190)

The withholding isn’t reported by the person who bears it, but by the person who applies it. In other words: if you’re the professional issuing the invoice with the withholding, you don’t file anything for that item yourself — you simply record the gross income (before withholding) in your accounts or registry books, and that withheld amount later becomes a payment on account that you deduct on your income tax return.

The party that does need to act is the business or self-employed person paying the invoice and applying the withholding: they must pay it over to the tax authorities using Form 111, generally filed quarterly (though larger companies file it monthly). Form 111 totals all the withholdings applied to professionals, employees, and other payees during the quarter, and the total amount is paid in. On top of that, once a year you must file Form 190, the annual informative summary, which shows, payee by payee, how much was paid and how much was withheld over the full year. The professional who had tax withheld can ask their client for a withholding certificate to check it matches what they themselves have declared.

What if the client doesn’t pay the withholding over to the tax authorities?

This is the concern that worries professionals most, and the answer is reassuring: the obligation to pay the withholding over rests with the payer, not with the professional who bears it. If your client withheld 15% (or 7%) on the invoice but then fails to pay that amount over to the tax authorities, the problem and the liability are theirs, not yours. As a professional, you can still deduct on your income tax return the amount that should have been withheld according to the invoice, even if the payer never actually paid it over. The tax authorities will pursue that debt against the defaulting withholding agent, along with the corresponding surcharges and interest — not against the professional who was paid in good faith.

The tricky situation arises when an invoice that should carry a withholding doesn’t show one at all: in that case, it’s best to ask the client to correct it as soon as possible, because an improperly issued invoice can genuinely lead to disputes over the amount actually owed. That’s why it’s worth checking, invoice by invoice, that the rate applied (15% or 7%) is correct and clearly broken out.

At Zythos Business, we support self-employed professionals and small businesses every quarter to make sure these withholdings — and the other filings that go with them — are calculated correctly from the very first invoice and filed without surprises, whether you’re the one issuing the invoice or the one paying it. We check that the rate applied is the right one at each point in time, reconcile Form 111 against the actual accounts, and make sure today’s oversight doesn’t turn into tomorrow’s tax notice.