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Practical Income Manual 2021.

3. Extraordinary expenses due to exceptional circumstances

Regulations: Art. 37.4.3 Regulation Personal Income Tax . See also common standard 2 of Annex III of Order HAC/ 1155/2020, of November 25 ( BOE of 4 from December).

When the development of the activity has been affected by fires, floods, subsidence or other exceptional circumstances, which 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 inform the Administration or Delegation of the State Tax Administration Agency corresponding to their tax domicile of said circumstance, within a period of 30 days from the date on which it occurs, contributing, to such effect, the corresponding justification and mentioning, where appropriate, the compensation to be received due to such alterations. The Tax Administration will verify the certainty of the cause that motivates the reduction in performance and the amount thereof.