For a quick starting point regarding freelancer rates, you can do something like this.
Net monthly income to freelance/business monthly revenue:
- 800€ net income
- 300-600€ taxes (labour and corporate, not VAT)
- 200-300€ business expenses (accountant, software licenses, hardware, communications)
- 150-300 10-20% profit margin & buffer
- TOTAL 1500 - 2000 € revenue per month
Billable hours per month:
- 260 weekdays per year
- -20 vacation days
- -10 legal holidays
- -10 sick leave, maybe a conference, other legal obligations
- = 220 days per year / 12
- = 18 days per month
- x 7 billable hours per day
- TOTAL 126 billable hours/month
HOURLY RATE: 1500 - 2000 / 126 = 12 - 16 € / hour + 19% VAT, if applicable
This is for a junior developer in a big city. You should 2x for a mid-level developer and 3x for a senior developer.
Not sure how they can have lower prices in western Europe, I have heard that argument before. The only way I can think of is bad math (inexperience), tax evasion (no business or invoices) or a very, very small tax on freelancers.