Reduction in net income due to the start of an economic activity
Regulations: Art. 32.3 Personal Income Tax Law
Requirements
The taxpayer who meets each and every one of the following requirements is entitled to this reduction:
-
That he/she begins the exercise of an economic activity and determines the net performance of his/her economic activity according to the direct estimation method .
To comply with this requirement, all economic activities carried out by the taxpayer must be taken into account, both those carried out individually and those carried out through entities under an income attribution regime.
-
That the economic activity has started on as of January 1, 2013 .
-
That no other activity has been carried out in the year prior to the start date of the new activity .
For these purposes, it will be understood that an economic activity has begun when no economic activity has been carried out in the year prior to the start date of the same, without taking into consideration those activities whose exercise has ceased without having obtained positive net returns since its start.
Amount of reduction
- Once the above requirements have been met, the taxpayer may reduce by 20 percent of the amount of positive net income declared from all its activities, previously reduced, where applicable, by applying the reduction for net income with a generation period of more than two years, or obtained in a notoriously irregular manner over time, and by the reduction corresponding to the exercise of certain economic activities referred to in article 32.2 of the Tax Law.
- The reduction will be applied in the first tax period in which the income is positive and in the following .
- In cases where an activity that generates the right to apply this reduction is started and another activity is subsequently started, without having ceased the previous one, the reduction will begin to apply in the tax period in which the sum of the positive net income from both activities is positive , being applied to said sum.
Maximum limit of reduction
The amount of net income to which the aforementioned reduction will be applied cannot exceed the amount of 100,000 euros per year .
Exclusion
The reduction does not apply in the tax period in which more than 50% of the income of the same comes from a person or entity from which the taxpayer obtained employment income in the year prior to the start date of the activity.