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Practical Income Manual 2022.

Paintings: Methods and modalities for determining the net income of economic activities: objective estimate

Objective estimation (See Chapters 8 and 9)

Scope

Entrepreneurs and professionals attended by:

  • That your activity is among those related to Order HFP /1335/2021, of December 1, and not excluded from its application

  • That the volume of total returns in the immediately preceding year does not exceed any of the following amounts:

    • 250,000 euros for all activities, except agricultural, livestock and forestry.
    • 125,000 euros when it corresponds to operations for which they are obliged to issue an invoice as the recipient is a businessman or professional acting as such.
    • 250,000 euros for all agricultural, livestock and forestry activities.
  • That the volume of purchases of goods and services in the previous year, excluding acquisitions of fixed assets, does not exceed the amount of 250,000 euros per year (VAT excluded).

  • That the activity is not carried out outside the scope of application of Personal Income Tax .

  • That they have not renounced or are excluded from the simplified regime of VAT and the special simplified regime of the Canary Islands General Indirect Tax (IGIC). That they have not renounced the special regime for agriculture, livestock and fishing of the VAT , nor the special regime for agriculture and livestock of the IGIC.

  • That no activity carried out by the taxpayer is in direct estimation, in any of its modalities.

Determination of net return

ACTIVITIES OTHER THAN AGRICULTURAL, LIVESTOCK AND FORESTRY

Number of module units

(x) Annual yield per unit

(=) Previous net performance 

(-) Minorities due to employment and investment incentives

(=) Net income reduced

(x) Corrective indices

(=) Net performance of modules

(-) General reduction 15%

(-) Lorca special reduction (20%)

(-) Special reduction on the island of La Palma (20%)

(-) Extraordinary expenses

(+) Other business perceptions

(=) Net performance of the activity

(-) Reduction (30%) with a maximum reduction base of 300,000 euros

  • For returns with a generation period of more than two years when they are allocated in a single year 
  • For income obtained in a notoriously irregular manner when attributed in a single year

Transitional regime : application of this reduction to performance that was received in installments prior to 01-01-2015.

(-) Reduction for taxpayers with total income less than 12,000 euros including those from the activity

(=) Reduced net yield 

AGRICULTURAL, LIVESTOCK AND FORESTRY ACTIVITIES

Total revenue volume

(x) Net return index

(=) Previous net performance

(-) Reduction for acquisition of agricultural diesel: 35%

(-) Reduction due to the acquisition of fertilizers: 15%

(-) Amortization of tangible and intangible assets (excluding forestry activities)

(=) Net income reduced

(x) Corrective indices

(=) Net performance of modules

(-) General reduction (25%)

(-) Reduction of young farmers

(-) Special reduction on the island of La Palma (20%)

(-) Extraordinary expenses

(=) Net performance of the activity

(-) Reduction (30%) with a maximum reduction base of 300,000 euros.

  • For income with a generation period of more than two years when attributed to a single year
  • For income obtained in a notoriously irregular manner when attributed in a single year

Transitory rules: application of this reduction to performance that was received in installments prior to 01-01-2015.

(-) Reduction for taxpayers with total income less than 12,000 euros including those from the activity

(=) Reduced net yield

Registry obligations

Invoices issued, invoices received and documentary evidence.

If amortizations are carried out :

- Record Book of investment goods

For activities whose net return is set based on the volume of operations (agricultural, livestock, forestry and processing of natural products):

– Sales and income record book