As a freelancer in Spain, the general rule is clear: your invoices must include the corresponding VAT. However, the VAT Law 37/1992 outlines a series of professional activities that are exempt from this tax. Understanding them is crucial for correct invoicing and avoiding issues with the Spanish Tax Agency (AEAT).
It's important not to confuse a VAT-exempt transaction with a transaction not subject to VAT. An exempt transaction falls within the scope of the tax, but the law frees it from the payment obligation. In contrast, a transaction not subject to VAT is entirely outside the scope of the VAT law.
Most Common VAT-Exempt Activities for Freelancers
Spanish tax regulations, in Article 20, establish a list of services that should not charge VAT. The most relevant ones for self-employed professionals are:
* Healthcare and medical services: Assistance provided to individuals by medical or healthcare professionals (doctors, dentists, psychologists, physiotherapists) is exempt. Note: cosmetic surgery and veterinary services are not included in this exemption.
* Training and education: This includes early childhood, school, university, and postgraduate education, language teaching, and vocational training. Private tutoring on subjects included in official study plans is also exempt.
* Social, cultural, and sports services: Provided by social-character entities. This includes services such as assistance to children, the elderly, or people with disabilities.
* Insurance and financial operations: Services related to insurance mediation, reinsurance, and capitalization, as well as certain financial operations.
* Artistic and intellectual property services: Professional services provided by visual artists, writers, composers, and literary translators.
How to Issue a VAT-Exempt Invoice
When issuing an invoice for an exempt transaction, you must not break down any VAT amount. However, it is mandatory to include a specific note justifying the exemption.
You must add a line on the invoice stating: "Invoice exempt from VAT under Article 20 of VAT Law 37/1992". This simple sentence legitimizes the absence of the tax in any review by the Tax Agency.
Exempt Invoices and the Arrival of VeriFactu in 2027
The obligation to invoice correctly remains, but the tools will change. With the implementation of the VeriFactu system, all issued invoices, including VAT-exempt ones, must be generated with software that complies with the new Anti-Fraud Law requirements.
Remember that the deadlines are approaching. According to the regulations, the mandatory use of a verified invoicing system for freelancers and micro-enterprises will begin on July 1, 2027. You can find all the details in our guide on VeriFactu 2027: Deadlines for Freelancers in Spain.
It is important to note that being exempt from applying VAT on your invoices does not exempt you from complying with the VeriFactu system, although there are some very specific exceptions. You can check them in our article about freelancers exempt from VeriFactu.
In summary, if your professional activity is on the exemption list, you not only can but must invoice without VAT. Make sure to justify it correctly on each invoice and prepare to adapt your invoicing systems to the new regulations to ensure flawless tax management.