Thousands of self-employed workers could be exempted from IVA

The Tax Agency wants to begin in 2024 to approve the necessary rules to implement the future IVA regime for franchises, whose entry into force is expected at the beginning of 2025, which would be a reform that will affect all self-employed workers.

Sources close to the proposals explained that the negotiation table has already agreed on all the keys and details that will make up the future franchise system that will allow thousands of self-employed workers and SMEs to be excluded from declaring IVA and including this tax in their invoices.

Although we will have to wait for the final draft and approval later in 2024, the negotiation table are believed to have initially concluded that this system has a limit of 85,000 euro in billing for self-employed workers and SMEs working in the national territory. Those who are below this threshold may be exempt from declaring IVA and will not have to include this tax in their invoices to clients, although they will not be able to deduct it from their purchases.

In any case, these sources warned, in the coming months all the details of what this future regime will be known. “The Treasury already has the proposal agreed upon by the panel of experts and now it will be necessary to deploy the system through a bill. In 2024, this rule will be carried out and, at the same time, a transitional system will be created to eliminate all the regimes that the franchise system will replace”.

The implementation of this new IVA exemption system, which is already underway in all countries of the European Union, except Spain, is being carried out at a table of experts with the Ministry of Finance, which is dealing in parallel the gradual disappearance of the module system, among other issues.

The Secretary of State for the Treasury himself, Jesús Gascón, already anticipated that the implementation of this system so that thousands of self-employed people stop being subject to IVA “is a debate that we should land in 2023, to adopt the necessary legal changes in 2024, with a view to its entry into force in 2025.”

These legal changes that could be implemented next year, as confirmed by sources close to the negotiation, will also include a transitional regime for the modules and other systems that are going to be eliminated. This transition would help self-employed workers who are currently subject to simplified IVA adapt to the new regulations.

Although the Treasury does not yet want to set a date for the elimination of the modules, the underlying idea is that the franchise regime will replace the simplified IVA system, which is part of the module regime. Therefore, both changes – the elimination of the objective estimate and the simplified IVA regime and the introduction of the franchise regime – are likely to be carried out in a phased manner.

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