Method and modalities for determining the net return from economic activities

Regulations: Art. 16 Personal Income Tax Law

Introduction

The methods for determining the net income of business activities, commercial or non-commercial, and professional activities are the following:

Direct estimation, which admits two modalities: normal and simplified.
Objective estimate, which is applied as a voluntary method to each of the economic activities, considered separately, determined by the Minister of Finance.

Without prejudice to the detailed commentary on each of the methods and modalities for determining net performance in the corresponding Chapters of the Manual, the tables in the following sections include the most significant notes of each of said methods and modalities.

Note: Royal Decree-Law 18/2019, of December 27, which adopts certain measures in tax, cadastral and social security matters (BOE of 29) modified the Personal Income Tax Law , extending for the 2020 tax period the exclusive quantitative limits set in the years 2016, 2017, 2018 and 2019 for the application of the objective estimation method, with the exception of agricultural, livestock and forestry activities that have their own quantitative limit by volume of income.