Earnings from economic activities

The determination of the attributable income will be carried out in accordance with the method of determining the net income applicable to the entity, without applying the 30% reduction to the income with a generation period of more than two years or classified by regulation as obtained in a notoriously irregular manner over time, when, in both cases, they are imputed in a single tax period provided for in article 32.1 of the Personal Income Tax Law, for the calculation of the income to be attributed to each of its members.

Reductions for the exercise of economic activities in article 32.2. of the Personal Income Tax Law and for the start of a new activity of article 32.3 of the Personal Income Tax Law are not applicable for entities under an income attribution regime to determine the net income of their economic activities. The members of the entity under the income attribution regime who are taxpayers of the Personal Income Tax will be able to make these reductions in their declaration, if applicable.

The expenses of each of the owners, partners or participants that, because their payment has not been agreed to be charged to the entity under an income attribution regime, are paid by each of them will be deductible for them, provided that there is due correlation with the obtaining of the income. The deductibility of these expenses will be carried out by the commoner, partner or participant who has paid them, reducing the income attributed to him by the entity.

The requirements for the application to entities under the income attribution regime of the direct estimation method , both in the normal and simplified modality, and the objective estimation method of both agricultural, livestock and forestry activities the remaining activities be consulted, respectively, in Chapters 7, 9 and 8 of this Manual.