European taxation is moving towards a simpler, more efficient model designed to boost the competitiveness of the self-employed and small businesses. In this context, Directive (EU) 2020/285 marks a decisive change in VAT regulation within the European Union: it introduces a harmonised VAT exemption scheme, based on a dual threshold (€85,000 for domestic transactions and €100,000 for cross-border transactions), and establishes a one-stop shop system that drastically reduces the administrative burden on SMEs.
This European development contrasts with the current situation in Spain, which remains the sole exception within the European Union, lacking a general VAT exemption scheme and failing to provide access to the cross-border scheme provided for by EU legislation. Whilst 26 Member States already apply the VAT exemption and facilitate business operations, Spain continues to require the declaration and payment of VAT from the very first euro of turnover. This situation places Spanish self-employed workers and micro-enterprises at a clear competitive disadvantage and constitutes an operational barrier that hinders the functioning of the internal market.
The White Paper we present provides a comprehensive analysis of why Spain currently represents a tax anomaly within the European framework, as well as the economic, legal and regulatory implications arising from this failure to transpose the legislation. The study examines in depth the impact on SMEs and the self-employed, assesses the national cost associated with the current VAT structure, and analyses the risks of maintaining a model that is more onerous and less efficient than that in force in the rest of the EU.
Key strategic aspects of the analysis include:
- The effect of the absence of a VAT threshold on business liquidity and profit margins.
- The additional administrative burden borne by Spanish businesses compared with the European average.
- The risk of a potential breach of EU law regarding the freedom to provide services.
- The lost economic opportunity for more than 1.2 million micro-enterprises that could benefit from an exemption of up to €85,000.
