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Practical Income Manual 2019.

Practical Case

Special category bar (heading IAE : 673.1), located in a rented premises in the city of Salamanca, where since its opening in 1995, 3 full-time salaried people have worked with the owner according to the Collective Agreement of the sector, which sets a working day of 1,792 hours per year. . The owner does not carry out any other economic activity.

In the previous year (2018), the number of units in the "salaried personnel" module amounted to 3 people. As regards fiscal year 2019, the activity has been carried out with the following detail:

  • On September 1, 2 new workers over the age of 19 who remained in the company as of December 31, 2019 were hired, each of whom has totaled 630 hours of work in said year. The total remuneration paid to staff in fiscal year 2019 amounted to 39,500.00 euros.
  • The length of the bar counter is 10 meters and there are 8 tables for four people installed there.
  • The contracted electrical power is 35 kilowatts and a type "B" recreational machine is installed on the premises.
  • Of the assets assigned to the activity, the owner only keeps invoices for the coffee maker, a thermal display case, the air conditioning installation and the 8 tables with their chairs. The data that appears in your investment property record book is the following:
    ElementStart of useCost priceAccumulated amortization as of 12-31-2018
    Furniture (tables and chairs) 06-01-1999 1,500 euros 1,500 euros
    Coffee maker 06-01-2014 9,400 euros 8,400 euros
    Thermal display case 01-07-2015 4,000 euros 2,500 euros
    Air conditioner installation 01-08-2015 6,600 euros 3,900 euros

  • To replace the tables and chairs of the establishment, the owner on October 1, 2019 purchased 8 new tables and 32 chairs for 2,400.00 euros, without the unit value of any of said furniture exceeding the amount of 601.01 euros. . Said furniture has been installed in the bar on the 15th of the aforementioned month. He sold the old furniture for 510.00 euros.

  • On August 10, 2019, a flood occurred in the bar, causing damage whose repair amounted to 1,200.00 euros, without the owner's insurance policy covering the aforementioned risk. On September 1, the owner of the activity submitted a document to the Tax Agency Administration corresponding to his tax domicile, communicating the aforementioned events and providing an invoice for the repairs carried out along with the document proving the flood issued by the fire service. of the town. By the competent services of the Tax Agency Administration, the certainty of the cause that motivated the extraordinary expense and its amount has been verified.

Solution:

1 Phase: Determination of prior net performance.

  1. Determination of the number of computable units of each of the modules applicable to activity .
    • Salaried staff:
      • 3 people all year round: (3 x 1,792 hours ÷ 1,792) = 3.00 people
      • 2 people hired on 09-01-2019: (2 x 630 hours ÷ 1,792) = 0.70 people
      • Total: 3.70 people
    • Non-salaried staff. The owner: 1.00 person
    • Electrical power. Contracted kilowatts: 35.00 kW.
    • Tables. Tables for 4 people: 8.00 tables
    • Bar length. Linear meters: 10.00ml
    • Type "B" recreational machines. Number of installed machines: 1.00 machine
  2. Application to the number of units of each module of the annual yield per unit before amortization established in Order HAC/1264/2018, of November 27 ( BOE of 30).
    Previous net performance (sum) 50,274.20
    ModuleNo. unitsPerformance per unitPerformance per module
    1. Salaried staff 3.70 4,056.30 15,008.31
    2. Non-salaried Staff 1.00 15,538.66 15,538.66
    3. Electrical power 35.00 321.23 11,243.05
    4. Tables 8.00 233.04 1,864.32
    5. Bar length 10.00 371.62 3,716.20
    6. Type "A" machines 0.00 957.39 0.00
    7. Type "B" machines 1.00 2,903.66 2,903.66

2 Phase: Determination of the reduced net return.

  1. Minority for employment incentives .

    1. Minority coefficient due to increase in the number of salaried people.

      Once the condition of having increased the workforce in 2019 compared to that existing in fiscal year 2018 has been met, due to the two workers hired on September 1, 2019, the following results:

      Number of units of the "salaried personnel" module in 2019: 3.70 people

      Number of units of the "salaried personnel" module in 2018: 3.00 people

      Increase in the number of units of the "salaried personnel" module (3.70 -3.00): 0.70 people

      Minority coefficient due to increase in the number of salaried people:

      0.70 (increase in the number of units of the "salaried personnel" module) x 0.40 = 0.28 people.

    2. Reduction coefficient by sections of the number of units of the "salaried personnel" module.

      Excluding the increase of 0.70 people to which the previous reducing coefficient was applied, the coefficient by sections is applied to 3.00 units of the module as follows:

      Up to 1.00: 1.00 x 0.10 = 0.10

      Between 1.01 and 3.00: 2.00 x 0.15 = 0.30

      Reduction coefficient by sections (0.10 + 0.30): 0.40

    3. Reduction coefficient for employment incentives.

      It is the result of adding the reduction coefficients by increase in the number of salaried people and by sections of the number of units of the "salaried personnel" module: 0.28 + 0.40 = 0.68

    4. Amount of the reduction for employment incentives.

      It is the result of multiplying the minor coefficient by the annual performance per unit of the "salaried personnel" module: 0.68 x 4,056.30 = 2,758.28 euros.

  2. Minority due to investment incentives .

    Using the amortization table contained in Order HAC/1264/2018, of November 27 ( BOE of 30), and applying the maximum linear amortization coefficients set therein, the amount of the reduction for investment incentives is determined as follows:

    Minority due to investment incentives (sum) 6,050

    Note to the box:

    (1) The input VAT is not included in the acquisition value of the fixed assets, since the activity is subject to the simplified VAT regime.(Back)

    (2) Despite having been in operation in the company until it was terminated due to sale, it is not possible to amortize the old tables and chairs in 2019, since as of 12-31-2018 these elements were already completely amortized.(Back)

    (3) As the amount that would result from the application of the maximum coefficient is higher than the amount pending amortization as of 12-31-2018, which amounts to 1,000 euros (9,400 8,400), the amortization has been carried out for the latter amount.(Back)

    (4) The new tables and chairs can be freely amortized because their unit value is less than 601.01 euros and because, in addition, the global amount of the new assets acquired in 2019 does not exceed the amount of 3,005.06 euros.(Back)
    heritage elementValue acquisition(1)Maximum coefficientAmortization periodAmortization
    Furniture (tables and chairs) 1,502 --- --- --- (2)
    Coffee maker 9,400 25% All year 1,000(3)
    Thermal display case 4,000 25% All year 1,000
    Air-conditioning 6,600 25% All year 1,650
    New tables and chairs (freely amortized) 2,400 100%(4) Irrelevant 2,400

  3. Determination of the reduced net return .

    Previous net performance: 50,274.20

    less: Reduction for employment incentives: 2,758.28

    less: Minority due to investment incentives: 6,050.00

    equal to: Minorized net return: 41,465.92

3 Phase: Determination of net performance of modules.

The only corrective index applicable in this example is the excess corrective index, because the reduced net return exceeds the amount of 30,586.03 euros. Therefore:

Net performance of modules = 30,586.03 + [1.30 x (41,465.92 – 30,586.03)] = 44,729.89 euros.

4 Phase: Determination of the net performance of the activity.

The general reduction of 5 percent should be applied first. Likewise, once all the requirements established for this purpose are met, the amount of the extraordinary expenses caused by the flood that occurred on August 10 must be deducted. Therefore:

Net performance of modules: 44,729.89

less: General reduction (5% s/ 44,729.89) = 2,236.49

less: Extraordinary expenses due to exceptional circumstances: 1,200.00

equal to: Net performance of the activity: 41,293.40

5 Phase: Determination of the reduced net return of the activity.

As there are no returns with a generation period of more than two years or that are considered to have been obtained in a notoriously irregular manner over time, the reduced net return of the activity coincides with that determined in phase 4 above, which amounts to 41,293.40 euros.

Comment : The capital gains or losses obtained as a result of the transfer of the assets affected by the activity (chairs and tables) must be declared in section F2 of the declaration.

Determination of the total reduced net return of the activity .

Since the income from economic activities exceeds 12,000 euros, the reduction in article 32.2.3 cannot be applied. of the Personal Income Tax Law so the total reduced net return coincides with the total reduced net return of the activity, which amounts to 41,293.40 euros.