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Practical Income Manual 2021.

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 Personal Income Tax Law , the balance resulting from the net income of the economic activities cannot be 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 of article 32.2.1 of the Personal Income Tax Law is limited to the amount of the net income from the activities economic interests of the taxpayers that generate the right 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 by application of the reduction.

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

Incompatibilities

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