- Directive (EU) 2020/285, effective January 2025, allows (but doesn’t mandate) Member States to implement domestic VAT exemptions for small businesses up to €85,000 turnover, and introduces a new mandatory cross-border exemption up to €100,000 total EU turnover.
- Spain is unique as the only EU country without any domestic VAT exemption for small businesses, making it an anomaly, though this domestic absence isn’t a direct infringement of the Directive.
- Spain’s actual non-compliance and the source of criticism is its failure to transpose the Directive, which prevents Spanish SMEs from accessing the crucial cross-border exemption, putting them at a competitive disadvantage in the EU market by denying them administrative simplification.
Source El Pais (by Fernando Matesanz & Ana Gozalez)
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