The European Commission has referred Spain to the Court of Justice of the EU for not transposing two VAT directives – the SME scheme (Council Directive (EU) 2020/285) and the place‑of‑supply rules for streamed services (Council Directive (EU) 2022/542). Spain was required to implement these directives by 31 December 2024 but has not notified transposition, leading to formal notices in January and July 2025 and a request for financial sanctions.
Spain has failed to transpose Council Directive (EU) 2020/285 on the SME VAT scheme and Council Directive (EU) 2022/542 on place‑of‑supply for streamed services and the VAT special scheme for second‑hand goods.
Member States were required to transpose the directives by 31 December 2024.
The Commission referred Spain to the Court of Justice of the EU and requested the imposition of financial sanctions.
It risks double taxation or non‑taxation for services streamed or virtually available, and may distort competition in the EU market.
Formal notices were sent on 31 January 2025 and reasoned opinions on 17 July 2025.
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Law360 · about 3 hours ago
The EU's top court has ruled that Spain's restriction on VAT deductions for entertainment expenses does not breach EU law. The decision, issued on March 12, 2026, rejects a human resources firm's challenge to the country's entertainment VAT break limit. The ruling confirms that Spain's policy remains compliant with EU regulations.
Forbes España · 6 days ago
Spanish business and professional associations have called for fiscal deductions to help companies and self-employed professionals implement the new electronic invoicing and Verifactu systems, which are set to become mandatory on 1 January 2027. They argue that without such incentives, 3.3 million SMEs and 3.4 million self-employed could face a collapse in the rollout. The request is an amendment to the Royal Decree Law that maintains the 2027 deadline while seeking tax relief.
LinkedIn · 13 days ago
The LinkedIn post explains Spain’s Modelo 349, an informative declaration for intra‑community transactions with EU VAT‑registered entities. It outlines filing frequencies, deadlines, key compliance risks, and the types of transactions that must be reported. The post emphasizes that Modelo 349 does not generate a tax payment and stresses accurate reporting to avoid audits.
International Tax Review · about 1 month ago
The Court of Justice of the European Union (CJEU) ruled that Spain cannot impose a stricter “directly and exclusively” requirement on VAT exemptions for services supplied by independent groups of persons. The decision clarifies that services must be directly necessary for the exempt activity, but exclusivity is not required, allowing general services such as cleaning to qualify. The ruling also states that competition distortion must be assessed on a concrete basis, not presumed.
Bloomberg Tax · about 1 month ago
The European Court of Justice issued a preliminary ruling on Jan. 22, 2026, stating that the Spanish VAT exemption for services rendered by cost‑sharing groups to members at cost is not valid. The ruling interprets Council Directive 2006/112/EC as precluding such an exemption, as the services were deemed outsourced and not linked to tax‑exempt activities. The decision applies to services such as cleaning for healthcare and educational buildings.
Law360 · about 2 months ago
The European Court of Justice ruled that Spain cannot automatically deny cleaning cooperatives a VAT exemption for services supplied to educational and healthcare institutions. The decision confirms that such co‑ops are entitled to the exemption, preventing blanket denial by Spanish authorities. The ruling was issued on 22 January 2026.
