The European Commission has officially drawn attention to Spain for its failure to implement Directive 2020/285. This document was supposed to come into effect on 1 January 2025, but it has not yet been implemented in Spain. The procedure opened by the Commission is a serious signal about the need to comply with European requirements.
What does Directive 2020/285 provide?
The directive gives EU countries the right to set a turnover threshold below which small businesses are exempt from paying value added tax (VAT). The maximum threshold is €85,000 per year.
How have other EU countries set their thresholds?
- Germany — 22,000 euros per year
- France — 33,800 euros for services
- Italy — 85,000 euros (maximum)
Spain has not yet set its threshold and is still applying the old rules, which have been waiting for an update for over a month since the deadline.
Who can benefit from this benefit?
The directive is designed to support autónomos, a category of self-employed people that is extremely large in Spain. It is estimated that between 1.5 and 2 million Spaniards work as autónomos, running small and medium-sized businesses.
These people suffer from significant tax pressure, so the benefit could significantly ease their financial situation and allow them to invest more in the development of their activities.
Why is Spain in no hurry?
The main problem is the financial consequences for the state budget. According to preliminary calculations, the implementation of the directive will lead to a loss of between 3 and 5 billion euros in tax revenues annually. This is a significant amount, especially for a country that is struggling to maintain financial stability.
Therefore, the Spanish government is in a difficult situation: on the one hand, it must meet EU requirements and support millions of entrepreneurs, and on the other, it is concerned about possible losses in budget revenue.
What could be the consequences?
If Spain continues to delay implementing the directive, the case could be referred to the Court of Justice of the European Union, which could result in fines and additional sanctions for the country.
However, the postponement creates other problems. Autónomos are in uncertainty, not knowing exactly when the new rules will come into effect, making it difficult to plan their business.
Balance of interests
The situation reflects the eternal dilemma of public administration: supporting small businesses and real easing of working conditions for entrepreneurs versus the need to preserve state revenues.
European standards are aimed at making the economy more competitive and friendly to small businesses. Spain will have to resolve this dilemma as soon as possible to avoid both EU sanctions and the disappointment of millions of autónomos who are waiting for change.