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Practical Income Manual 2020.

Phase 4: Determination of the net performance of the activity

In accordance with the regulations governing the objective estimation method, contained in Annex I and in the first Additional Provision of Order HAC /1164/2019, of November 22 ( BOE of 30), to determine the net income of the activity, the following reductions may be made:

1. General reduction: 20 percent

Regulations: First Additional Provision of Order HAC /1164/2019, of November 22 ( BOE of 30) and art. 9 of Royal Decree-Law 35/2020, of December 22, on urgent measures to support the tourism, hospitality and commerce sector and in tax matters ( BOE of 23)

By 2020, the net performance of modules of agricultural, livestock and forestry activities, as well as transformation processes, determined as discussed in phase 3 above, may be reduced by a percentage of 20 percent ##1 .

2. Young farmers reduction: 25 percent

In accordance with the provisions of the sixth Additional Provision of the Personal Income Tax Law and point 3 of the instructions for the application of signs, indices or modules in IRPF of Annex I of Order HAC /1164/2019, of November 22 ( BOE of 30), farmers young people (over 18 years of age and under 40 years of age) or agricultural employees may reduce the net yield of modules, resulting after applying the general reduction, by 25 percent in each of the tax periods closed during the five years following their first installation as owners of a holding that has priority status, carried out under the provisions of Chapter IV of Title I of Law 19/1995, of July 4, on the Modernization of Agricultural Holdings, always that prove the completion of a plan to improve the exploitation.

For these purposes, the status of priority exploitation must be accredited by certification issued by the corresponding body of the Autonomous Community, or by inclusion in the General Catalog of Priority Exploitations of the Ministry of Agriculture, Fisheries and Food.

See Royal Decree 613/2001, of June 8, on the improvement and modernization of the production structures of agricultural holdings ( BOE of 9).

3. Extraordinary expenses due to exceptional circumstances

Regulations: See Annex III of Order HAC /1164/2019, of November 22 ( BOE of 30).

When the development of the activity has been affected by fires, floods, subsidence or other exceptional circumstances that have led to extraordinary expenses unrelated to the normal process of the exercise of the activity, the interested parties may reduce the resulting net return by the amount of said expenses. To do this, taxpayers must have brought this circumstance to the attention of the Administration or, failing that, the Tax Agency Delegation, within a period of 30 days from the date on which it occurs, providing for this purpose the corresponding justification and mentioning, where appropriate, the compensation to be received due to such alterations, so that the Tax Administration verifies the certainty of the cause that motivates the reduction in performance and the amount thereof.

See in this regard Royal Decree-Law 2/2019, of January 25 (BOE of 26) and 11/2019, of September 20 (BOE of 21), by which urgent measures are adopted to alleviate the damage caused by storms. and other catastrophic situations.