There have been lots of rumours in recent weeks regarding new rules on VAT payments for Spain’s self-employed. Is it true that ‘autónomos’ no longer need to charge and declare VAT if they earn below a certain amount?
In another instalment of ‘the complicated rules of self-employment in Spain’, we have the new discussion surrounding VAT (IVA in Spanish) regulations for the self-employed.
In mid-March, the European Commission took Spain to the European Court of Justice for failing to implement two EU directives on VAT into national law by the established deadline.
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One of these allows member states to exempt self-employed workers with annual revenues of less than €85,000 from paying VAT.
Brussels even warned that financial penalties may be imposed on Spanish authorities, as there had been several previous warnings to Spain’s government on the matter since January 2025.
Spain is one of the only EU countries where self-employed workers must charge and declare IVA, even for low-income earners.
In late March, Catalan nationalist party Junts urged Spain’s leftist government to implement a VAT exemption scheme for self-employed workers if the Socialists wanted their vote in favour of the €5-billion relief package to alleviate the economic impact of war in the Middle East.
The proposal was discussed at the Spanish Congress of Deputies last week and gained support from the ruling PSOE Socialist Party.
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If brought into law, it would mean that self-employed people in Spain with an annual revenue of less than €85,000 would not have to include VAT on their invoices or pay it on to the Tax Agency.
Since the approval of the proposal last week, there have been several articles and many discussions on freelance message boards online about how this will affect the self-employed, with several saying the measure has now passed.
It’s worth noting, however, that even though the proposal was approved, it has not been inscribed into Spanish law.
What was approved in the Spanish Congress was a proposición no de ley, a motion that’s not binding for government. It urges Spain’s ruling Socialists to discuss cutting the VAT requirement for certain autónomos but it doesn’t force the government to do so.
This means that no tax changes have come into effect yet and the self-employed remain obligated to charge and declare VAT the same as before.
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Currently, the measure only exists on paper as a European directive and is being discussed by the Spanish government, but it is not yet part of the tax law here, despite what may have been published or talked about online.
VAT (or IVA in Spain) is a standard rate of 21 percent, but certain products or services benefit from lower rates such as 10 percent or sometimes 4 percent.
Currently there are certain professions in Spain that are explicitly exempt from VAT by law. These include doctors, dentists, private tutors, psychologists and public defenders, among others.
According to SGM Abogados, legal experts in Spain, if your clients are outside the EU, you also do not include VAT on your invoices.
Generally, you also do not add IVA to invoices for business clients (B2B) located within the EU either, but if you sell to individuals, you probably will.
This can be tough for Spain’s low-income sole traders in particular, who find it very difficult to charge competitive rates if they sell within the EU, because they may have to add VAT on top, whereas a freelancer from another EU country won’t, so they can charge less.
