Spain's VAT Scandal: Thousands of Small Businesses Affected by Government Inaction

Spain Faces EU Scrutiny Over Delayed VAT Exemptions for Small Businesses MADRID, June 4, 2025 – Spain is under fire from the European Union for its failure to fully implement a crucial directive granting VAT exemptions to small businesses. The delay, impacting thousands of self-employed individuals and small business owners, has sparked outrage and legal action. "This is a fiscal scandal of enormous proportions," states Xavi Abat, a lawyer who created a viral TikTok video detailing the issue. Abat highlights that the EU directive 2020/285, mandating the exemption for businesses with annual turnover under €85,000, was supposed to be implemented by December 31, 2024. Spain's delay is costing small businesses significant sums in unnecessary VAT payments. The video shows examples of receipts and explains the legal steps self-employed individuals can take to challenge the unnecessary VAT payments. Abat's video has garnered significant attention, with over 25,000 views. He also provides a downloadable legal recourse document. While the Spanish government has yet to comment publicly, the EU's pressure is mounting. The situation underscores the challenges faced by small businesses navigating complex tax regulations. The lawyer's initiative empowers Spanish citizens to fight for their rights and highlights the importance of transparency in government policy.