The Government’s refusal to implement a VAT exemption for self-employed workers with lower income volumes—a measure already implemented in most European Union countries and which was supposed to be approved by January 2025—has led the main self-employed association, ATA, to report the Spanish Executive to the European Commission. The complaint cites the refusal to transpose the community directive modifying the special VAT exemption regime for the self-employed and SMEs—known as the “VAT franchise regime.” According to the complaint, this violates “the principles of effectiveness, non-discrimination, proportionality, legal certainty, fair competition, and freedom of establishment under European Union Law.”
With this complaint, ATA (Association of Self-Employed Workers) seeks to end a form of discrimination that places Spanish self-employed workers at a disadvantage compared to their European competitors. This follows the decision by the Minister of Finance, María Jesús Montero, not to activate the VAT franchise system, which would allow self-employed individuals with low turnover to stop charging VAT to their customers. This makes Spain the only country in the EU that has yet to apply this tax benefit, leaving “Spanish self-employed workers at a clear competitive disadvantage relative to those in the rest of Europe, without the Government showing any intention of solving it,” denounced the president of ATA, Lorenzo Amor.
According to ATA’s complaint to the EU, Spanish VAT regulations “lack a general VAT franchise regime based on a turnover threshold. Instead, they maintain special regimes such as the Simplified Regime or the Equivalence Surcharge, which are very restrictive in application, sector-specific, and in no way equivalent to the harmonized franchise regime. As a consequence, the vast majority of self-employed workers and small businesses in Spain are obliged to charge VAT from the very first euro of turnover.”
With this complaint, ATA (Association of Self-Employed Workers) seeks to end a form of discrimination that places Spanish self-employed workers at a disadvantage compared to their European competitors. This follows the decision by the Minister of Finance, María Jesús Montero, not to activate the VAT franchise system, which would allow self-employed individuals with low turnover to stop charging VAT to their customers. This makes Spain the only country in the EU that has yet to apply this tax benefit, leaving “Spanish self-employed workers at a clear competitive disadvantage relative to those in the rest of Europe, without the Government showing any intention of solving it,” denounced the president of ATA, Lorenzo Amor.
According to ATA’s complaint to the EU, Spanish VAT regulations “lack a general VAT franchise regime based on a turnover threshold. Instead, they maintain special regimes such as the Simplified Regime or the Equivalence Surcharge, which are very restrictive in application, sector-specific, and in no way equivalent to the harmonized franchise regime. As a consequence, the vast majority of self-employed workers and small businesses in Spain are obliged to charge VAT from the very first euro of turnover.”
