Spain: the tax challenge for SMEs
A Quantax study places Spain among the EU countries with the highest share of employer social contributions and a high level of tax complexity for small businesses, in a context of increasing administrative control and the digital transformation of tax compliance
by gonzalo blázquez de sande
Spain is at a turning point in its corporate tax system. Not so much because of tax rates themselves, but due to the combination of high social contributions, regulatory complexity, and a rapid digitalisation of compliance processes that is advancing faster than many small businesses can adapt. This is highlighted by a Quantax analysis titled “Spain ranks among the EU countries with the highest tax pressure on SMEs and self-employed workers” (May), which places the country among the most demanding tax systems in the European Union for SMEs and freelancers, at a time when tax control and data traceability are reaching unprecedented levels. Iberian Lawyer has spoken with several sector experts to contextualise the findings: Celia Ferrero, Vice President of ATA (National Federation of Self-Employed Workers), Castor Gárate, partner in charge of international tax and transactions at EY, and Concha Navarro, tax lawyer at Ontier.
THE COST DEBATE
Spain stands out not only for its nominal tax rates, but for the structure of its system, where employer social contributions play a particularly significant role.
According to the Corporate Tax Competitiveness Report 2025, prepared by the Institute of Economic Studies and the Tax Foundation, Spain is the third EU country where the largest share of total tax revenue comes from employer social contributions, at 25.8%, compared to a European average of 17.9%. In addition, total business tax contribution accounts for 17.8% of GDP, above the EU average of 14.8%.
In this context, taxation ceases to be a purely technical discussion and becomes a day-to-day management challenge. Celia Ferrero, Vice President of ATA, describes a reality in which the tax burden on the selfemployed is shaped not only by what they pay, but by how they are required to operate within the system: “There is constant uncertainty about the deductibility of expenses, which leads many self-employed workers not to deduct what they are entitled to for fear of the Tax Administration’s interpretation, resulting in over-taxation.” She adds that this uncertainty translates into an administrative burden that forces outsourcing of compliance. “It is such a complex system that many must rely on accountants or tax advisors simply to comply.”
SELF-EMPLOYED WORKERS: ECONOMIC FRAGILITY AND ADMINISTRATIVE BURDEN
The impact is not only operational. Ferrero also highlights a structural dimension. “There is a sense of defenselessness, because there is not always real capacity to defend oneself in complex procedures, which often leads to accepting assessments even when they could be challenged.”
ATA’s barometer data helps contextualise this perception. In 2025, 35% of self-employed workers reported a decline in turnover, 32% saw a deterioration in their financial situation, and up to 93% perceived an increase in administrative burdens. In addition, 63% report earnings below the minimum wage, highlighting the fragility of a significant share of the sector.
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