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Adobe Legal Brussels takes Spain to European Court of Justice for failing to update national law to comply with tax regulationsThe European Commission warns that failure to apply these directives "carries the risk of double taxation or non-taxation" and asks the CJEU to impose economic sanctions
Wednesday, 11 March 2026, 15:35
The European Commission announced on Wednesday that it will take Spain to the Court of Justice of the EU (CJEU) for failing to transpose two tax directives (IVA tax) into national law. Member states were required to implement these directives by December 2024 at the latest, so Brussels has decided to bring the matter before the European court.
The EU directive in question introduces substantial changes to tax regulations applicable to SMEs (small- and medium-sized businesses), with the aim of creating a modern and simplified system. The EU rules reduce tax compliance costs for SMEs (at national and EU level), reduce distortions of competition, reduce the negative impact of the threshold effect and facilitate compliance and monitoring by tax administrations.
The Spanish authorities have already stated that they do not intend to apply the tax exemption for SMEs established by the directive. The measure is optional. The European Commission, however, insists that Spain must transpose the provisions that allow SMEs established in Spain to apply the exemption system in other member states. This is necessary because, for an SME established in Spain to obtain the exemption elsewhere in the EU, it must first register with the Spanish authorities.
In a statement, Brussels warns that Spain's failure to apply these directives "carries the risk of double taxation or non-taxation", given that "the 26 other member states have transposed the directive and will apply different rules". Spain has not communicated the transposition of the two directives. In the absence of such communication, the Commission sent two letters of formal notice to the country, followed by reasoned opinions in July 2025. In the absence of a reply, Brussels has decided to refer the matter to the CJEU.