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Practical manual for Income Tax 2020.

3. Maximum limit and incompatibilities of general reductions for the exercise of certain economic activities

Maximum limit

• As a consequence of the application of the reductions for the exercise of certain economic activities mentioned above, provided for in article 32.2 of the Tax Law, the balance resulting from the net income of economic activities may not negative

• In the case of joint taxation the following must be taken into account:

  1. The reduction for economically dependent self-employed workers or with a single unrelated client in article 32.2.1 of the Tax Law is limited to the amount of the net income from the economic activities of the taxpayers that generate the to its application.

  2. The reduction for taxpayers with non-exempt income of less than 12,000 euros is limited to the balance of the sum of net income from economic activities of the members of the family unit , so that it cannot be negative due to the application of the reduction.

    Furthermore, this reduction for taxpayers with non-exempt incomes of less than 12,000 euros together with the reduction for obtaining work income of article 20 of the Personal Income Tax Law may not exceed 3,700 euros.

Incompatibilities

The reduction for economically dependent self-employed workers or those with a single unrelated client and the reduction for taxpayers with non-exempt incomes of less than 12,000 euros are incompatible with each other.