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Practical Income Manual 2021.

3.1 Exclusive quantitative limits

Note:Article 63 of Law 11/2020, of December 30, on the General State Budgets for the year 2021 ( BOE of 30) has modified, with effect from January 1, 2021, the thirty-second transitional provision of the Personal Income Tax Law , to extend to the 2021 tax period the application of the same exclusive quantitative limits set for the years 2016, 2017, 2018, 2019 and 2020.

The following quantitative limits constitute causes for exclusion from the objective estimation method:

A. Having achieved, in the previous year (2020), a volume of full income derived from the exercise of economic activities that exceeds the following amounts:

Regulations: Transitional provision thirty-second Law Personal Income Tax and art. 32.2 a) Regulations

  • 250,000 euros annually , considering all operations carried out by the taxpayer, except agricultural, livestock and forestry operations

    For these purposes, all operations will be counted regardless of the recipient of the same, that is, whether or not there is an obligation to issue an invoice in accordance with the provisions of the Regulations that regulate billing obligations, approved by Royal Decree 1619/2012, of November 30.

    For this calculation, the volume of income from agricultural, livestock and forestry activities is not taken into account.

  • 125,000 euros annually , when corresponding to operations for which they are required to issue an invoice as the recipient a businessman or professional who acts as such in accordance with the provisions of article 2.2.a) of the Regulation that regulates billing obligations.

    Article 2.2.a) of the Regulation that regulates billing obligations establishes that: “a) Those in which the recipient is a businessman or professional who acts as such, regardless of the tax regime to which the businessman or professional carrying out the operation is subject, as well as any others in which the recipient does so. required for the exercise of any right of a tax nature.

    When an activity was started in the immediately preceding year, the volume of income will increase per year.

    In no case will current or capital subsidies or compensation be computed, as well as the Value Added Tax and, where applicable, the equivalence surcharge that taxes the operation, for those activities that are taxed by the simplified Tax regime. on Added Value.

B. Having exceeded the volume of purchases in goods and services in the previous year ( 2020 amount of 250,000 euros annually , excluding acquisitions of fixed assets. 

Regulations: Art. 32.2 b) Regulations Personal Income Tax .

Attention: To determine this limit, the volume of purchases from agricultural, livestock and forestry activities is also taken into account.

In the case of subcontracted works or services, their amount will be taken into account for the calculation of this limit.

When an activity had been started in the immediately preceding year, the volume of purchases will increase per year.

Rules for determining the volume of full returns and purchases

To determine the volume of full income and purchases of goods and services mentioned above, not only the operations corresponding to the economic activities carried out by the taxpayer, but also those corresponding to those carried out by the spouse, descendants and ascendants, must be computed. as well as by entities under the income attribution regime in which any of the above participate, in which the following circumstances occur:

  • That economic activities are identical or similar.

    For these purposes, it will be understood that the economic activities classified in the same group in the Tax on Economic Activities are identical or similar.

  • That there is a common direction for such activities, sharing personal or material means.

    In the case of operations carried out with related entities, in the terms provided in article 18 of Law 27/2014, of November 27, on Corporate Tax ( BOE of 28), They must be valued at their normal market value, understood as the value that would have been agreed upon by independent persons or entities under conditions of free competition.

    In these cases, the taxpayer must comply with the documentation obligations of said operations in the terms and conditions established in articles 13 to 16, Chapter V ("Information and documentation on related entities and operations") of Title I of the Tax Regulations. Companies, approved by Royal Decree 634/2015, of July 10 ( BOE of 11).