Spain extends its modules tax system for small hospitality businesses through 2027

Small hospitality businesses in Spain that pay taxes under the modules system will continue to use that framework in 2027, after the Finance Ministry kept the objective assessment method for personal income tax and the simplified value-added tax regime in an order published in the Official State Gazette on Thursday, November 5.

The measure matters for bars, cafes, some restaurants and certain lodging businesses that meet the system’s requirements, because it preserves the way many small operators calculate their taxes without moving to ordinary bookkeeping-based taxation. It also keeps a general 5% reduction in net income for taxpayers under the objective assessment method, according to the order published in the Boletín Oficial del Estado, or BOE. The reduction applies to net income used for tax calculation under the modules regime. It is not a 5% cut in the final tax bill.

The rule, Order HAC/1161/2026, is dated Wednesday, November 4, and sets out how the objective assessment method for Spain’s personal income tax, known as IRPF, and the simplified special regime for VAT will operate in 2027. According to the BOE text cited by the government publication, the order maintains the same basic modules framework for another year.

Under Spain’s modules system, eligible self-employed workers and small businesses can determine their tax base through preset indicators, indexes and signs linked to the activity, instead of calculating results through standard accounting. In practice, that means taxes are estimated using criteria fixed by regulation for each business category, which can reduce administrative work for businesses that fall within the system’s thresholds.

For hospitality operators, the decision gives continuity rather than introducing a new tax break or a structural reform. Businesses already using modules and still meeting the legal conditions in 2027 will continue under the same general method for both IRPF and the simplified VAT regime. That continuity is important in a sector made up of many small operators that often rely on predictable tax treatment and less complex filing requirements.

The BOE publication says the order also regulates the criteria for inclusion, exclusion and modification of the applicable indexes and extends the simplified VAT regime for the coming tax year. That means the 2027 framework will continue to define which taxpayers can remain in the system and which parameters apply to their activity.

The measure applies only to businesses that meet the conditions for the regime. Spain’s modules system is limited by thresholds tied to revenue and the volume of operations, and businesses that exceed those limits or fail other conditions must move to other tax methods. The BOE notice summarized the order as a continuation of the simplified taxation system for taxpayers that fit those parameters.

For restaurants and lodging businesses, the practical effect is that tax planning for 2027 will not change sharply because of this order alone. Operators covered by the regime will still be able to rely on the modules structure that has been used in prior years, and the 5% reduction in net income under objective assessment remains in place for another year.

The order does not present the 5% measure as a reduction in VAT itself. In the hospitality sector, that distinction is important because the relief affects the net income figure used within the objective personal income tax method, not the final amount of tax owed in every case, and not a general 5% reduction of VAT charges. The simplified VAT regime also remains in force for eligible taxpayers, but it is governed by its own rules within the order.

The publication in the BOE gives legal effect to the 2027 tax framework and provides formal confirmation for businesses, advisers and tax professionals who needed to know whether the modules system would continue unchanged into the next year. For small hospitality operators that remain inside the regime, the main outcome is stability: the modules stay, the simplified VAT regime stays, and the general 5% reduction in net income under objective assessment stays as well.