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Practical Income Manual 2021.

Special rules applicable to certain subsidies or aid

Without prejudice to the peculiarities that may arise from the regulatory regulations or the specific conditions of each of them, it is worth mentioning the treatment applicable, in general, to the following subsidies or aid:

  • Direct aid decoupled from the Common Agricultural Policy (basic payment, payment for agricultural practices beneficial for the climate and environment, payment for young farmers and, where appropriate, payment of the simplified regime for small farmers). The amount of the aid will be accumulated to the income from the recipient's crops or farms in proportion to their respective amounts.

    However, when the recipient of direct aid has not obtained any income derived from the exercise of agricultural and livestock activities, the net return index to be applied will be 0.56 .

    In these cases, in addition to the general reduction of 20 percent (2021) and the reduction planned for young farmers, the corrective indices discussed below provided for agricultural and livestock activities may be applied, if applicable, since the fact of The fact that direct income has not been obtained from these activities does not imply, in any case, that no activity has been carried out given that the receipt of direct aid requires recipients to carry out certain maintenance tasks on the farms. Amortizations may also be reduced if appropriate.

  • Public aid provided for in the National Rural Development Framework of Spain. In this case, when the recipient of direct aid has not obtained any income derived from the exercise of agricultural and livestock activities, the net return index to be applied will be 0.56.

  • Subsidies for crop or farm interruptions . If the subsidy or aid is granted for the interruption of a certain crop or a specific livestock production and is intended to compensate for the income lost, the net yield corresponding to the cultivation or production that was carried out previously.

  • Subsidies not linked to specific crops or productions . When subsidies are received that are not linked to a specific crop or production, such as those for the withdrawal of land from production or fallow, the amount of the subsidy that should be computed in the year will be distributed among the remaining crops or operations that the farmer or rancher carries out, in proportion to the income from each of them, subsequently accumulating them for the purposes of applying the corresponding net return indices.

  • Subsidies received to contract agricultural insurance . Subsidies received by farmers or ranchers who subscribe to combined agricultural insurance policies, whether received from the State Agricultural Insurance Entity (ENESA) or from the Autonomous Communities, should not be included among the income that is taken as a basis to determine performance. net, since for the establishment of the net yield indices applicable to each type of crop or product, what the holder actually pays was already taken into account as the cost of the insurance, once the subsidized part has been deducted.

  • Insurance compensation . The amount of compensation received from insurance entities as a result of accidents that have affected farm products, in process or finished, will be computed within the full income corresponding to the type of crop or production in question.

    Within this type of accident or loss, the expenses caused by the destruction of animals are not included, so the compensations that are paid by the insurance to cover the expenses derived from the destruction of animals , will not be integrated into the total volume of income from the activities.

  • Certain subsidies or aid from the community agricultural policy ( PAC ) , as well as others of a public nature that aim to repair the destruction, in certain circumstances , of assets affected, have special tax treatment, which can be consulted in Chapter 7 of this Manual.

  • Forest subsidies . Subsidies granted to those who exploit forestry farms managed in accordance with technical forest management plans, forestry planning, forest management plans or reforestation plans approved by the competent forestry administration will not be included in the tax base, provided that the average production period , depending on the species in question, is equal to or greater than 20 years.

Note: The benefits received from Social Security for temporary disability, risk during pregnancy or provisional disability, where applicable, will be taxed as income from work.