Firstly, the Commission reproaches Spain for failing to incorporate the rules that update the VAT regime applicable to small and medium-sized enterprises (SMEs)—a reform adopted in 2020 with the aim of simplifying the tax obligations of these companies and reducing competition distortions within the internal market.
The EU Executive explains that although Spain has indicated it does not intend to apply the VAT exemption for SMEs and the self-employed with a turnover of less than €85,000 (provided for in this directive, as it is an optional measure for Member States), the country remains obliged to transpose the provisions that allow companies established in its territory to benefit from this regime in other EU countries.
Specifically, it emphasizes that for a Spanish SME to benefit from this exemption in another Member State, it must first register with the Spanish tax authorities—a procedure that cannot be applied as long as the European regulations have not been incorporated into national law.
Consequently, the European Commission will ask the Court of Justice of the European Union (CJEU) to impose a fine on Spain for failing to adopt in time a directive that would allow Spanish SMEs to apply a VAT exemption when operating in other Member States, as well as another rule updating the tax regulations for certain digital services, second-hand goods, and works of art.
The EU Executive is taking this action after Spain failed to notify the transposition of both rules, despite the infringement proceedings opened by EU services. These services had already sent a letter of formal notice and subsequently a reasoned opinion during the preliminary stages of the infringement procedure to urge the Government to meet the deadlines.
