VAT exemptions and special regimes

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It is also important to periodically review invoices and receipts to ensure that they comply with the requirements established by the Tax Agency. In addition, self-employed workers can consider the option of grouping their purchases so that the VAT incurred is concentrated in specific periods, which could facilitate the management of deductions in quarterly declarations.

In short, careful planning and strict control of expenses can maximize deductions and therefore reduce the VAT tax burden.


Not all activities are subject to VAT and there are special regimes that may apply to certain self-employed persons. Some activities, such as education, healthcare, and certain financial services, are exempt from VAT. This means that VAT is not charged on invoices issued, but the VAT incurred on these activities cannot be deducted either.

Self-employed workers can benefit from different special regimes, such as the equivalence surcharge, applicable to retail traders, or the agriculture, livestock and fishing regime, which has particularities in the application of VAT.

To qualify for a special regime, the self-employed person must meet certain requirements and notify the Tax Agency at the start of his or her activity. Each regime has its own rules and may imply a simplification of tax obligations, although it may also limit the ability to deduct input VAT.

Comparison between the general VAT regime and the special franchise regime for self-employed workers
Self-employed workers can choose from different VAT regimes depending on their situation and business volume. The general VAT regime is the most common and requires self-employed workers to charge VAT on all their operations and to deduct the VAT incurred.

On the other hand, the special franchise regime is an option list of canada cell phone number for self-employed persons with income below a certain threshold, which exempts them from charging VAT on their invoices.

This regime simplifies tax obligations, as it does not require self-employed persons to file quarterly VAT returns or to deduct input VAT. However, it also means that self-employed persons cannot deduct VAT from their expenses, which could increase their costs.

The choice between one or another regime depends on the specific characteristics of the business and a careful assessment of the advantages and disadvantages of each. It is advisable to carefully analyze which regime best suits the economic activity of the self-employed person in order to maximize tax benefits.

Penalties and consequences for non-compliance
Failure to comply with VAT-related tax obligations by self-employed workers can have serious consequences for the self-employed, including penalties and fines.

Errors in VAT declaration, such as omitting income or incorrectly deducting expenses, can result in fines and penalties. The Tax Agency can impose penalties proportional to the amount of VAT not declared or incorrectly declared.