VAT franchise for the self-employed under €85,000: what the EU directive allows and what applies in Spain today

What the EU directive allows

Directive (EU) 2020/285 allows Member States to exempt small businesses with an annual turnover of up to €85,000 from VAT, and set 1 January 2025 as the date of application (text on EUR-Lex, in Spanish). It is an option granted to the Member States, not an exemption that applies by itself.

What happens in Spain today

As of October 2026, Spain has not incorporated that regime into Ley 37/1992 on VAT. We checked this on 6 October 2026 in the consolidated text in the BOE, updated on 2 October 2026: the list of special regimes in article 120 does not include a franchise for small businesses.

That is why, today, a self-employed person who invoices less than €85,000 still charges and settles VAT as normal, unless a specific exemption under article 20 applies.

What is worth doing

• Keep issuing invoices with VAT and filing the returns that apply to you, as until now.
• Do not stop charging VAT because you have read that a franchise "already exists": as long as Spanish law does not incorporate it, an invoice without VAT when no exemption applies can lead to a reassessment.
• Ask your accounting firm if you think any of your operations is exempt under article 20.
• Keep an eye on the BOE: if the Spanish legislator incorporates the regime, it will be published there, with its requirements and how to notify the Tax Agency.

👉 Do you have an accounting firm and want to organise your self-employed clients' queries? That is what XERA for accounting firms is for: it warns you of what needs your judgement. If you prefer to see it on your case, write to us. Calls and demos are held in Spanish.