3.4 Normal direct estimation

Direct estimation constitutes the general method for determining the amount of the different components of the tax base of Personal Income Tax , among which are obviously included those derived from the exercise of economic activities. This method is based on the declarations submitted by the taxpayer, as well as on the data recorded in the accounting books and records that the taxpayer is required to keep, verified by the Tax Administration.

When it comes to determining the performance of economic activities in Personal Income Tax the direct estimation method admits two modalities: normal and simplified.

The electronic headquarters of the Tax Agency incorporates a « Reporter of Income from Economic Activities », where you can consult how to declare the income of your activity under this regime and in which cases you can choose to apply the direct estimation regime in its simplified modality as well as the waiver and exclusion of said modality.

It applies, in general, to entrepreneurs and professionals who are not covered by the simplified modality or the objective estimation method.

In any case, it applies if the amount of the turnover of the set of activities exceeds €600,000 per year in the immediately preceding year or the simplified direct estimate is waived.