The independent association ATA is calling on the European Commission to sanction Spain for not exempting self-employed workers who invoice less than 85,000 euros from VAT. “As confirmed by the Commission itself, Spain is currently the only Member State that does not apply the exemption regime for small businesses, failing in a blatant and prolonged manner to fulfill its obligations,” denounces the association chaired by Lorenzo Amor. According to ATA, this obligation is linked to a European Union directive that Spain has not yet transposed and for which an infringement procedure is already underway. “This non-compliance has a huge effect on business operations and makes us less competitive,” says Amor, also vice president of CEOE, in a statement accompanying the text of the complaint.
“On January 1, 2025, the transposition of the European directive should have come into force, which would exempt self-employed workers who invoice less than 85,000 euros per year from VAT,” denounces ATA. Basically, this rule exempts taxpayers who do not exceed this level of invoicing from the obligation to include VAT on their invoices as well as from the obligation to submit periodic declarations on this subject. “The inaction of the Spanish legislator means that the majority of self-employed workers in Spain cannot benefit from any real VAT simplification regime, being forced to comply with the same formal obligations as large companies,” he indicates in the complaint filed with the Community Executive.
According to the diagnosis of this association, this forces the majority of self-employed people and SMEs to invoice VAT from the first euro of invoicing. The directive, which Spain does not respect, underlines ATA, “allows Member States to establish an annual turnover threshold of up to 85,000 euros, below which self-employed workers and SMEs would be exempt from the imposition, regulation and declaration of VAT”. The president of the PP, Alberto Núñez Feijóo, recently announced that if he governs, he will exempt these self-employed workers from paying VAT.
ATA recalls that the Commission noted this non-compliance and initiated an infringement procedure, which resulted in a formal notice in January 2025. It was followed by an opinion in July, “inviting it to adapt its internal law to the directive within two months, under penalty of seizing the Court of Justice of the European Union; to date, non-compliance persists”, insists ATA.
The association chaired by Amor emphasizes that Spain “lacks a general VAT exemption regime based on an invoicing threshold” and that “it maintains special regimes such as the simplified regime or the equivalence surcharge, which are of very restrictive sectoral application and are in no way equivalent to the harmonized exemption regime”.
This situation, asserts ATA, generates “unjustified” discrimination. He gives as an example the difference due to the type of activity: “A self-employed person carrying out a traditional taxed activity (e.g. hotel management) can benefit from modules, while a liberal profession or the digital sector (e.g. lawyer, marketing) is excluded and bears a disproportionate bureaucratic burden, even though it charges much less.
“It’s as if two people bought the same car, but one was allowed to take the fast lane and pay a fixed toll, while the other, having registered it in the name of a small family business instead of his own name, was forced to drive on a back road full of paperwork and pay a toll at every intersection,” adds the group chaired by Amor.
Given this diagnosis, ATA asks the Commission to declare that Spain has failed to fulfill its obligations under the non-compliant directive (2020/285), by not having adopted in time the provisions necessary for its transposition; continue the infringement procedure already started; and to urge Spain to adopt “without further delay, the legislative measures necessary to establish a VAT exemption regime consistent with the object and spirit of European regulations”.
About The Author
