Requirements to be entitled to this reduction

Taxpayers who meet each and every one of the following requirements are entitled to this reduction:

a) That the net income from the economic activity is determined according to the direct estimation method.

However, if the net income is determined using the simplified direct estimation method, the reduction will be incompatible with the application of the 5% deductible percentage (with a maximum amount of 2,000 euros) for all deductible provisions and expenses that are difficult to justify as referred to in article 30.2.4 of the Personal Income Tax Law.

Clarifications:

In joint taxation, if only one of the spouses meets the requirements to apply the reduction, the fact that they choose to apply it does not prevent the other spouse from applying the 5% deduction for deductible provisions and expenses that are difficult to justify ( with the limit of 2,000 euros).

If both spouses meet the requirements to apply the reduction, the fact that one of them chooses to apply it does not prevent the other spouse from applying the 5% deduction for all deductible provisions and expenses that are difficult to justify (with a limit of 2,000 euros). However, in this case the amount of the reduction may not be greater than the net income from the activities of the spouse who has opted to apply the reduction.

b) That all deliveries of goods or services are made to a single person , physical or legal, not linked in the terms of article 18 of the LIS , or that the taxpayer is considered a self-employed worker economically dependent in accordance to the provisions of Law 20/2007, of July 11, of the Statute of Self-Employed Work (BOE of July 12) and the client on whom you financially depend is not a related entity in the terms previously discussed.

For these purposes, in accordance with article 11 of the aforementioned Law 20/2007, an economically dependent self-employed worker is considered to be one who carries out an economic or professional activity for profit and on a regular, personal, direct and predominant basis for a natural or legal person, called a client, on whom he or she depends economically because he or she receives from him or her at least 75 percent of his or her income from work and economic or professional activities.

Regarding the LIS see Law 27/2014, of November 27, on Corporate Tax.

c) That the set of deductible expenses corresponding to all economic activities developed by the taxpayer does not exceed 30% of the declared gross income .

d) That, during the tax period, all formal obligations provided for in article 68 of the Personal Income Tax Regulations are fulfilled.

The formal accounting and registration obligations of taxpayers who are owners of economic activities are discussed in Chapter 6.

e) That no income from work is received in the tax period.

However, this requirement will not be deemed to be breached if unemployment benefits or any of the benefits derived from the social security systems referred to in article 17.2 of the Personal Income Tax Law are received during the tax period, provided that their amount does not exceed 4,000 euros per year.

In these cases and provided that all the established requirements are met, both the reduction for obtaining work income and the reduction for carrying out certain economic activities will be applied.

f) That at least 70 percent of the income for the tax period is subject to withholding or payment on account.

g) That no economic activity is carried out through entities under an income attribution regime.

Note: When the taxpayer opts for joint taxation, he/she will be entitled to the reduction for economically dependent self-employed workers or those with a single unrelated client when he/she individually meets the requirements indicated above to be entitled to its application and its amount may not exceed the net income from the economic activities of the members of the family unit that generate the right to its application.