Spanish Government opens the door to eliminating VAT for thousands of freelancers

The Government proposes applying the VAT franchise scheme for freelancers earning under €85,000. Over 700,000 freelancers could stop charging VAT and filing quarterly returns.

Published on 2026-03-26 · GTM Team

The Spanish Government has taken a key step in tax policy that could affect hundreds of thousands of self-employed workers: the possible elimination of VAT for freelancers with low income.

The measure is currently on the table in Congress and could be approved shortly.

⚖️ What the Government proposes about VAT for freelancers

The Government's proposal consists of applying the so-called VAT franchise scheme, a system already in place in other European countries.

👉 In practice this means:

• Freelancers with income below €85,000 per year
• Would not have to charge VAT on their invoices
• Nor file quarterly returns

💸 Who really benefits from eliminating VAT for freelancers

This Government measure could affect:

• More than 700,000 freelancers in Spain
• Especially small professionals and service providers
• Low-structure activities (consultants, freelancers, etc.)

Additionally:

👉 it would reduce administrative burden

👉 it would improve immediate liquidity for freelancers

⚠️ Why the Government is acting now (and not before)

Here's the interesting part:

• It's a European directive that Spain had been delaying
• Brussels even pressured with sanctions
• And it's finally unblocked through internal political negotiation

👉 It's not a spontaneous Government initiative — it's external pressure + political necessity

💣 The key: the VAT franchise is not definitive yet

Watch out, because here's the catch:

• It's in the approval phase
• It depends on political agreements
• And it may change in its final implementation

👉 It's not implemented yet, but it's serious

🧠 The important thing about VAT and freelancers (that nobody tells you)

This completely changes the model:

Until now:

• The freelancer acts as a VAT collector

With this system:

👉 they stop being a fiscal intermediary

But it also means:

• You won't be able to deduct input VAT the same way
• The cost structure changes
• It won't always be beneficial for all freelancers

📊 What this means for taxation in Spain

If the Government approves this VAT reform for freelancers:

• Spain would align with the rest of the EU
• The system would be simplified for small freelancers
• But public revenue would decrease

📌 Conclusion

The debate about VAT for freelancers has entered a new phase with the Government's proposal.

👉 It's not a one-off reduction

👉 It's a change of model

And if confirmed, it will mark a before and after for hundreds of thousands of professionals in Spain.