Skip to main content
Practical Income Manual 2020.

Scope of application of the simplified modality

Regulations: Art. 28 Regulation Personal Income Tax

Requirements

The simplified modality of the direct estimation method is voluntary in nature , so the taxpayer can waive its application . In the absence of waiver, this modality must be applied in fiscal year 2020 to determine the net income of all economic activities carried out by the taxpayer, provided that:

a. Do not determine the net return of all your activities by the objective estimation method .

For these purposes, it should be noted that the economic activities eligible for the objective estimation method and the requirements for their inclusion can be consulted in Chapters 8 and 9 .

b. The net amount of the turnover of the previous year , corresponding to all the activities carried out by the taxpayer, does not exceed 600,000 euros per year .

When the activity had started in the immediately preceding year, the net amount of the turnover will be increased per year, for these purposes only.

When no activity was carried out in the immediately preceding year, the performance will be determined by this modality, unless it is waived in the terms discussed below.

c. No activity carried out by the taxpayer is in the normal modality of the direct estimation method.

Note: With the exception of the activities included in the objective estimation method, in the first year of carrying out the activity, the net return will be determined by this method, unless expressly waived, whether whatever the net amount of the resulting turnover at the end of the year.

Determination of the net amount of the turnover

In accordance with the regulations, the net amount of the turnover is constituted by the difference between the following positive and negative items:

• Positive items

  • The amount of the sale of products and the provision of services or other income derived from the ordinary activity of the company, understood as the activity that the company carries out regularly and from which it obtains its periodic income.
  • The acquisition price or production cost of goods or services delivered in exchange for non-monetary assets or in consideration for services that represent expenses for the company.

  • The amount of subsidies granted to the company individually based on and forming part of the price of the units of product sold or the level of services provided.

    The amount of the remaining subsidies should not be included for these purposes.

•Negative items

  • Sales returns.
  • The "rebates" on sales or provision of services, as well as commercial discounts made on the computed income.
  • VAT and other taxes directly related to the turnover that must be passed on, if they have been computed within the amount of sales or the provision of services and must be subject to repercussion.

See article 35.2 of the Commercial Code; the Standard for preparing the annual accounts 11 of the General Accounting Plan, approved by Royal Decree 1514/2007, of November 16 ( BOE of 20), as well as the Resolution, of 16 of May 1991 (BOE of January 18, 1992), of the Institute of Accounting and Auditing of Accounts (ICAC).