If you are a doctor, physiotherapist, or psychologist working as a freelancer (autónomo) or running your own small business in Spain, this tax guide is for you. Taxation in the healthcare sector has its peculiarities, especially regarding VAT, and it's crucial to stay updated not only to comply with the Tax Agency (Hacienda) but also to optimize your tax burden. Furthermore, significant changes in invoicing are on the horizon that you need to be aware of.
VAT on Health Services: Exempt or Not?
The main question for health professionals is whether their invoices should include VAT (IVA in Spanish). The general answer is no: according to Article 20.One.3 of the VAT Law, healthcare services are exempt. However, this exemption has important nuances:
- Key condition: The exemption only applies to services for the diagnosis, prevention, and treatment of diseases.
- Doctors: A consultation to diagnose an ailment or provide medical treatment is exempt. In contrast, cosmetic surgery for purely aesthetic purposes (e.g., breast augmentation) must be invoiced with 21% VAT.
- Physiotherapists: Rehabilitation sessions to treat an injury are exempt. However, a relaxation massage, a sports training plan, or non-therapeutic wellness services are subject to 21% VAT.
- Psychologists: Clinical therapy to treat disorders such as anxiety or depression is exempt. On the other hand, services like coaching, personal development, or preparing reports for personnel selection processes are not covered by the exemption and must include 21% VAT.
IRPF: Direct Estimation and Key Deductions
As a freelance professional, you will most likely pay your Personal Income Tax (IRPF) under the Simplified Direct Estimation regime. This allows you to deduct expenses directly related to your activity to reduce your taxable income. Some of the most common deductible expenses in the health sector are:
* Rent and utilities for the clinic or office.
* Professional association fees and professional liability insurance.
* Purchase of medical supplies (gloves, examination tables, etc.) and office supplies.
* Training, conferences, and subscriptions to specialized journals.
* Personnel costs, if you have employees.
Remember to keep all invoices and receipts to justify these expenses to the Spanish Tax Agency.
Mandatory Digitalization: VeriFactu and Electronic Invoicing
Invoicing in Spain is about to undergo a radical change. To combat tax fraud, the AEAT has launched the VeriFactu system. If you want to learn more about this system, you can check our What is VeriFactu? Guide for Freelancers in Spain.
This system requires all freelancers and companies to use certified invoicing software that automatically sends a record of each invoice to the Tax Agency. This means that it will no longer be valid to issue invoices using programs like Word or Excel.
It is crucial to be aware of the mandatory implementation deadlines:
* Companies and SMEs: Starting from January 1, 2027.
* Freelancers and micro-enterprises: Starting from July 1, 2027.
Although the dates may seem distant, it is vital to start planning the transition. Adapting your processes and choosing the right software will save you trouble and potential penalties in the future. For more details on the timeline, we recommend reading our guide on VeriFactu 2027: Deadlines for Freelancers in Spain.