Practical Case

Special category bar (IAE heading: 673.1), located in a rented premises in the city of Salamanca, in which since its opening in 1995, 3 full-time salaried people have worked with the owner according to the Collective Agreement of the sector, which establishes a working day of 1,800 hours. annual. The owner does not carry out any other economic activity.

In the previous year (2019), the number of units in the "salaried personnel" module amounted to 3 people.

In fiscal year 2020, as a consequence of the health emergency situation caused by the Covid-19 coronavirus and the various measures adopted in response to this situation, the data to take into account are the following.

Economic activity has been suspended during the declaration of the state of alarm from March 14 to June 20, 2020 and from November 4 to December 5, 2020, a period in which the closure of the hospitality industry was decreed due to the competent authority.
Due to the closure of the bar during the declaration of the state of alarm, the owner requested and obtained the extraordinary benefit for cessation of activity for an amount of 1,400 euros
Regarding its three workers, in accordance with Royal Decree-Law 8/2020, of March 17, it requested and was granted an ERTE due to force majeure of suspension of employment contracts, which took effect from the March 14, 2020. Subsequently, on July 1, I reinstated one of the workers, with the other two continuing in ERTE as of December 31, 2020.

The owner cannot exactly set the hours worked, so it must be calculated for each worker, taking into account their situation in the ERTE and the days on which the state of alarm was declared in the first half of 2020, as well as the days of the second half of 2020 in which the exercise of the activity was suspended by the competent authorities of the Community of Castilla y León, the number of hours they did not work.
The length of the bar counter is 10 meters and there are 8 authorized tables for four people.

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:

Element	Start of use	Cost price	Accumulated amortization as of 12-31-2019
Furniture (tables and chairs)	06-01-2015	1,500 euros	1,500 euros
Coffee maker	06-01-2016	9,400 euros	8,400 euros
Thermal display case	01-07-2017	4,000 euros	2,500 euros
Air conditioner installation	01-08-2017	6,600 euros	3,900 euros

To replace the tables and chairs of the establishment, the owner on February 1, 2020 acquired 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, 2020, 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.
The taxpayer has not obtained other income during the year.

Solution

1 Phase: Determination of prior net performance.

1. Determination of the number of computable units of each of the modules applicable to activity .

Module 1. Salaried staff

Note: For the quantification of the “salaried personnel” and “non-salaried personnel” modules, those corresponding to the days in which the state of alarm was declared in the first half of 2020, as well as the days of the second half of 2020, will not be counted as hours worked. 2020 in which, whether or not the state of alarm was declared, the effective exercise of economic activity would have been suspended as a consequence of the measures adopted by the competent authority to correct the evolution of the epidemiological situation derived from Covid-19 (also called SARS-CoV-2).

Worker 1:

ERTE: from 03/14/2020 to 06/30/2020 = 109 days

Closing of the activity: from 11/04/2020 to 12/04/2020 = 31 days

Total (109 + 31) = 140 days

Number of Hours not worked in that period (140 days ÷ 366 days) x 1,800 hours/year = 688

Computable hours worked: 1,800 hours/year – 688 hours not worked = 1,111 hours
Workers 2 and 3

ERTE: from 03/14/2020 to 12/31/2020 = 293 days

Number of Hours not worked in that period: (293 days ÷ 366 days) x 1,800 hours/year = 1,441 hours

Hours worked: 1,800 hours/year – 1,441 hours not worked = 359 hours each of the two workers

Total: 2 workers x 359 hours = 718 hours
Total hours (1,111 + 718) = 1,829 computable hours/year.
Calculation No. units of module "salaried personnel" (average): 1,829 hours worked ÷ 1,800 hours/year = 1.01

Module 2. Non-salaried staff: The owner

Note: The declaration of the state of alarm to face the health emergency situation caused by the Covid-19 coronavirus carried out by Royal Decree 463/2020, of March 14, covered with its successive extensions from March 14 until 00:00: 00 hours on June 21, 2020. Therefore, the days in which the state of alarm was declared in the first half of 2020 were 99 days.

Non-countable days:

State of alarm: from 03/14/2020 to 06/20/2020 = 99 days

Closing of the activity: from 11/04/2020 to 12/04/2020 = 31 days

Total days without activity (99 + 31) = 130 days

Hours not worked (130÷ 366) x 1,800 hours/year = 639 hours
Hours worked: (1,800 – 639) = 1,161
Calculation No. module units "non-salaried personnel" (average): 1,161 hours worked ÷ 1,800 hours/year = 0.64

Module 3. Electrical power . Contracted kilowatts: 35.00 kW/hour

Non-countable days:

State of alarm: from 03/14/2020 to 06/20/2020 = 99 days

Closing of the activity: from 11/04/2020 to 12/04/2020 = 31 days

Total days without activity (99 + 31) = 130 days
Computable days: (366 – 130) = 236 days
Average: 35 KW/hour × (236 days ÷ 366 days) = 22.57 kw/hour

Module 4. Tables . Tables for 4 people: 8 tables

Non-countable days:

State of alarm: from 03/14/2020 to 06/20/2020 = 99 days

Closing of the activity: from 11/04/2020 to 12/04/2020 = 31 days

Total days without activity (99 + 31) = 130 days
Computable days: (366 – 130) = 236 days
Average: 8 tables × (236 days ÷ 366 days) = 5.15 tables

Module 5 . Bar length. Linear meters: 10.00ml

Non-countable days:

State of alarm: from 03/14/2020 to 06/20/2020 = 99 days

Closing of the activity: from 11/04/2020 to 12/04/2020 = 31 days

Total days without activity (99 + 31) = 130 days
Computable days: (366 – 130) = 236 days
Average: 10 × (236 days ÷ 366 days) = 6.45 ml

Module 7. Type "B" recreational machines.

Non-countable days:

State of alarm: from 03/14/2020 to 06/20/2020 = 99 days

Closing of the activity: from 11/04/2020 to 12/04/2020 = 31 days

Total days without activity (99 + 31) = 130 days
Computable days: (366 – 130) = 236 days
Number of installed machines: 1.00 machine
Average: 1 machine × (236 days ÷ 366 days) = 0.65

2. Application to the number of units of each module of the annual yield per unit before amortization established in Order HAC /1164/2019, of November 22 (BOE of 30).

Module	No. units	Performance per unit	Performance per module
1. Salaried staff	1.01	4,056.30	4,096.86
2. Non-salaried Staff	0.64	15,538.66	9,944.74
3. Electrical power	22.57	321.23	7.250.16
4. Tables	5.15	233.04	1,200.16
5. Bar length	6.45	371.62	2,396.95
6. Type "A" machines	0.00	957.39	0.00
7. Type "B" machines	0.65	2,903.66	1,887.38
Previous net performance (sum)			26,776.25

2 Phase: Determination of the reduced net return.

1. Minority for employment incentives .

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

The workforce has not been increased compared to that existing in fiscal year 2019, so this coefficient does not apply.
Reduction coefficient by sections of the number of units of the "salaried personnel" module.

The coefficient by sections is applied to 1.01 units of the module in the following way:

Up to 1.00: 1.00 x 0.10 = 0.10

Between 1.01 and 1.01: 0

Reduction coefficient by sections (0.10 + 0.00): 0.10
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 + 0.10 = 0.10
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: 0.10 x 4,056.30 = 405.63 euros.

2. Minority due to investment incentives .

Using the amortization table contained in Order HAC/1164/2019, of November 22 (BOE of 30), and applying the maximum linear amortization coefficients set therein, the amount of the reduction for investment incentives is determined as follows:

heritage element	Value acquisition⁽¹⁾	Maximum coefficient	Amortization period	Amortization
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 2020, since as of 12-31-2019 these elements were already fully 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 12-31-2019, which amounts to 1,000 euros (acquisition value 9,400 - Accumulated amortization 8,400), the amortization has been carried out by 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 2020 does not exceed the amount of 3,005.06 euros. ^(Back)
Furniture (tables and chairs)	1,500	---	---	--- ⁽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 net reduced return

Previous net performance: 26,776.25

less: Reduction for employment incentives: 405.63

less: Minority due to investment incentives: 6,050.00

equal to: Minorized net return (26,776.25 – 405.63 – 6,050) = 20,320.62

3 Phase: Determination of net performance of modules.

No corrective index is applicable

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

Note: The extraordinary benefit for cessation of activity is considered work performance, so it does not count as income from economic activity.

Note: In accordance with the provisions of article 9 of the Royal Decree-Law on urgent measures to support the tourism, hospitality and commerce sectors, it is appropriate to apply, first of all, the general reduction of 35 percent as it is a hospitality activity. . 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.

Net performance of modules = 20,320.62

less: General reduction (35% s/ 20,320.62) = 7,112.22

less: Extraordinary expenses due to exceptional circumstances: 1,200

equal to: Net income from the activity (20,320.62 – 7,112.21 - 1,200) = 12,008.40

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

Reduction due to irregularity

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 12,008.40. 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.
Reduction for the exercise of certain economic activities

Since the income from economic activity exceeds 12,000 euros, it is not appropriate to apply the reduction in article 32.2.3. of the Personal Income Tax Law.

Determination of the total reduced net return of the activity.

The total reduced net return matches the total reduced net return of the activity = 12,008.40