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Practical Income Manual 2021.

3.2 Other causes of exclusion from the objective estimation method

In addition to the exclusive quantitative limits, the following are causes of exclusion from the objective estimation method:

a. Develop economic activity, totally or partially, outside Spanish territory

Regulations: Art. 32.2 c) Regulation Personal Income Tax .

b. Determine the net return of any economic activity using a direct estimation method, in any of its modalities.

Regulations: Articles 34.2 and 35 Personal Income Tax Regulations.

However, when any activity that is not included or for which the objective estimation method is waived is started during the year, the exclusion will not take effect for that year with respect to the activities that had been carried out previously, but rather from the following year.

c. Exclusion from the special simplified regime of VAT or IGIC

Regulations. Art. 36.2 and 4 Personal Income Tax Regulation .

The exclusion of the special simplified regime of the Value Added Tax or the Canary Islands General Indirect Tax will mean the exclusion of the objective estimation method for all the economic activities carried out by the taxpayer.