ECJ VAT Case – C-512/26 (Commission v Spain) – Action – VAT rates reform: failure to transpose Directive (EU) 2022/542

Summary

The European Commission brought an infringement action against the Kingdom of Spain on 20 May 2026 concerning the transposition of Council Directive (EU) 2022/542 on VAT rates. The Commission claims that Spain failed to adopt all the laws, regulations and administrative provisions necessary to comply with that Directive or, in any event, failed to communicate those measures. Directive (EU) 2022/542 updates the goods and services eligible for reduced VAT rates, seeks to provide Member States with equal access to reduced rates, regulates the place of supply of certain virtually provided services and introduces an additional condition relating to the special arrangements for taxable dealers. Under Article 3 of the Directive, Member States had to transpose the required measures by 31 December 2024, communicate them immediately to the Commission and apply them from 1 January 2025. The Commission asks the Court to declare that Spain has failed to fulfil its obligations and to impose a lump sum and, if the infringement persists until judgment, a daily penalty payment under Article 260(3) TFEU. [eur-lex.europa.eu]

Articles of the EU VAT Directive 2006/112/EC discussed

Article 316 – This article concerns access to the special arrangements applicable to taxable dealers. Directive (EU) 2022/542 introduces an additional condition for access to those arrangements. The provision is relevant because it is one of the elements of Directive 2006/112/EC amended by Directive (EU) 2022/542 and therefore forms part of the measures which the Commission claims Spain failed to transpose or communicate. [eur-lex.europa.eu], [juris.curi….europa.eu]

Order Sought

The European Commission claims that the Court should:

Declare that, by failing to adopt all the laws, regulations and administrative provisions necessary to comply with Council Directive (EU) 2022/542 of 5 April 2022 amending Directives 2006/112/EC and (EU) 2020/285 as regards rates of value added tax, or, in any event, by failing to communicate them, the Kingdom of Spain has failed to fulfil its obligations under that Directive.
Order the Kingdom of Spain to pay the Commission a lump sum equal to the higher of the following amounts:i. A daily amount of EUR 32,430 multiplied by the number of days during which the infringement has persisted from the day following the expiry of the transposition period laid down in Article 3 of Directive (EU) 2022/542 until the date on which the Kingdom of Spain puts an end to the infringement or, failing that, the date of delivery of the judgment pursuant to Article 260(3) TFEU.
ii. A minimum lump sum of EUR 7,540,000.
Should the failure to fulfil obligations persist until the date on which judgment is delivered in the present proceedings, order the Kingdom of Spain to pay the Commission a daily penalty payment of EUR 135,811.20 from the date of judgment in the present proceedings until the Kingdom of Spain has fulfilled its obligation to communicate the measures transposing Directive (EU) 2022/542 into national law.
Order the Kingdom of Spain to pay the costs. [eur-lex.europa.eu]

Key Takeaways

The action concerns Spain’s alleged failure to transpose or communicate Directive (EU) 2022/542 by the 31 December 2024 deadline, with the relevant national measures due to apply from 1 January 2025. [eur-lex.europa.eu]
The unimplemented measures concern several areas, including reduced VAT rates, virtually provided services and an additional condition governing access to the special arrangements for taxable dealers under Article 316 of Directive 2006/112/EC. [eur-lex.europa.eu], [juris.curi….europa.eu]
The Commission is seeking financial sanctions under Article 260(3) TFEU, comprising a lump sum and, if the infringement continues until judgment, a daily penalty payment of EUR 135,811.20. [eur-lex.europa.eu]

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