Social Security contributions for the self-employed have crept onto the political agenda and Alberto Núñez Feijóo tries to use them even if it is by copying European Union laws. The president of the Popular Party announced this weekend a Comprehensive Plan for the self-employed whose star measure is the exemption from paying VAT for self-employed workers with incomes of less than 85,000 euros per year. The point is that the proposal was already approved by the EU in 2020 and only the transposition of the European directive by the Government of Spain is necessary.
“Lowering taxes is not an option: it is an obligation. Therefore, we will exempt self-employed workers with incomes of less than 85,000 euros per year from paying VAT,” Feijóo commented at a meeting with self-employed workers this weekend in Soria.
The reality is that the popular leader's proposal was approved by the EU in Council Directive 2020/285 of February 18, 2020, which modifies Directive 2006/112/EC, relating to the common system of value added tax, with regard to the special regime for small businesses, which It has already been collected in the BOE.
Feijóo also announced as its own measure that self-employed workers will go from one VAT declaration per quarter to one per year. “We will review each procedure and eliminate all unnecessary bureaucracy so that you can dedicate yourself to work and make your business work,” said the PP leader. The modified European directive already states that “Member States will authorize these small companies benefiting from the franchise (exemption) to submit a simplified VAT return covering the period of one calendar year.”
The Ministry of Finance has not yet transposed the European directive. In response to questions from elDiario.es, the Treasury assures that “the directive is pending transposition, but the idea is to meet the deadlines.” However, the modification of the directive establishes that it would have to be approved in EU countries “as of January 1, 2025.”
At the same time, the Treasury argues that there are other tax regimes in Spain that make it meaningless to apply this VAT exemption to self-employed people who earn less than 85,000 euros.
“In Spain, since 1986, the year in which the tax was established in Spain, it has been decided to apply other different regimes for small businesses such as the simplified regime or the equivalence surcharge regime that are coordinated with the module regime in the Personal Income Tax. Therefore, it does not seem that it makes much sense to reformulate the taxation in one tax and not say what will happen in the other,” they declare from the Ministry of Finance.
Furthermore, from the department directed by María Jesús Montero they remember that “retailers who apply the equivalence surcharge regime no longer have to declare VAT. Therefore, the objective of not having to submit a VAT declaration has already been met.”