Practical Case

Special category bar (IAE heading: 673.1), located in rented premises where, since its opening in 1995, 3 full-time salaried employees have worked with the owner in accordance with the Collective Agreement for the sector, which sets a working day of 1,800 hours per year. The owner does not carry out any other economic activity.

In the previous year (2021), the activity was suspended for part of the year and of its three workers, one worked for 600 hours in the activity, returning to ERTE and the other two remained included throughout the year in ERTE .

In the 2022 financial year, the following data must be taken into account.

Economic activity was suspended during the month of January, reopening on February 1.
The holder has received an extraordinary benefit for cessation of activity for the month of January, during which the activity was suspended, amounting to 600 euros.
Regarding its three employees who were on ERTE at the beginning of the 2022 financial year, it incorporated one of them into the activity on February 1, the other on May 15, and the third remained on ERTE. The hours worked by each of the workers amounted to 1,650 and 900 hours/year, respectively.
The bar is 10 metres long and has 8 tables for four people.
The contracted electrical power is 35 kilowatts and a type "B" gaming machine is installed on the premises.

Of the fixed assets assigned to the activity, the owner only keeps invoices for the coffee machine, a thermal display case, the air conditioning installation and the 8 tables with their chairs. The data contained in your investment assets register are as follows:

Element	Beginning of use	Cost price	Accumulated amortization as of 31-12-2021
Furniture (tables and chairs)	01-06-2017	1,500 euros	1,500 euros
Coffee maker	01-06-2018	9,400 euros	8,400 euros
Thermal display case	01-07-2019	4,000 euros	2,500 euros
Air conditioner installation	01-08-2019	6,600 euros	3.900 euros

To replace the establishment's tables and chairs, the owner purchased 8 new tables and 32 chairs on February 1, 2022 for €2,400.00, without the unit value of any of said pieces of furniture exceeding the amount of €601.01.

The furniture was installed in the bar on the 15th of the aforementioned month. He sold the old furniture for 510.00 euros.
On August 10, 2022, a flood occurred in the bar, causing damages whose repair amounted to 1,200.00 euros, without the owner's insurance policy covering the aforementioned risk. On September 1, the owner of the activity submitted a document to the Tax Agency corresponding to his tax domicile, reporting the aforementioned facts and providing an invoice for the repairs carried out along with the document proving the flooding issued by the local fire service. The competent services of the Tax Agency Administration have verified the certainty of the cause that motivated the extraordinary expense and its amount.
The taxpayer has not obtained other income in the year.

Solution

Phase 1: Determination of prior net performance.

1. Determination of the number of computable units of each of the modules applicable to activity .

Module 1. Salaried staff

Previous note: Salaried staff is quantified based on the number of hours actually worked annually by each worker in the activity.

In the case of ERTE, salaried personnel must be valued exclusively by the hours of effective work they perform in accordance with the individual conditions that affect each worker.

Therefore, for the purposes of quantifying the “salaried personnel” module, salaried personnel must be assessed, worker by worker, based on the conditions in which they are in the ERTE, not counting the part of the employment contract that is temporarily suspended.

Worker 1: Reinstated on February 1st

Computable hours worked: 1,650 hours
Worker 2: Reinstated on May 15

Computable hours worked: 900 hours
Worker 3

Computed hours worked: 0 hours (since it has been in ERTE all year).
Total hours (1,650 + 900 + 0) = 2,550 computable hours/year.
Calculation of number of units for the "salaried personnel" module (average): 2,550 hours worked ÷ 1,800 hours/year = 1.41

Module 2. Non-salaried staff: The owner

Previous note: In accordance with Instruction 7 for the application of signs, indexes or modules in the IRPF of Order HFP /1335/2021, of December 1, to calculate the period in which the activity was carried out during said calendar year, the days in which the activity was suspended (31 days) will not be taken into account, without including in these days the vacation and weekly rest days.

Computable days:

Closing of the activity: 31 days

Total days with activity (365-31) = 334 days
Hours worked: (334 days ÷ 365 days) x 1,800 hours/year = 1,647 hours/year
Calculation of number of units for the "non-salaried personnel" module (average): 1,647 hours worked ÷ 1,800 hours/year = 0.91

Module 3. Electrical power . Contracted kilowatts: 35.00 kW/hour

Closing of the activity: 31 days

Total days with activity (365 - 30) = 334 days
Average: 35 KW/hour × (334 days ÷ 365 days) = 32.02 kw/hour

Module 4. Tables . Tables for 4 people: 8 tables

Closing of the activity: 31 days

Total days with activity (365 -30) = 334 days
Average: 8 tables × (334 days ÷ 365 days) = 7.32 tables

Module 5 . Bar length. Linear meters: 10.00 ml

Closing of the activity: 31 days

Total days with activity (365 - 30) = 334 days
Average: 10 × (334 days ÷ 365 days) = 9.15 bar length

Module 6. Type "A" recreational machines.

The premises do not have any type "A" gaming machines. Therefore, number of units = 0.00

Module 7. Type "B" recreational machines.

Closing of the activity: 31 days

Total days with activity (365 - 30) = 334 days
Average: 1 machine × (334 days ÷ 365 days) = 0.91 type "B" gaming machines

2. Application to the number of units of each module of the annual yield per unit before amortization established in Order HAC /1155/2020, of November 25 (BOE of December 4).

Module	No. of units	Yield per unit	Performance per module
1. Salaried staff	1.41	4.056,30	5,719.38
2. Non-salaried Staff	0.91	15,538.66	14.140,18
3. Electrical power	32.02	321.23	10,285.78
4. Tables	7.32	233.04	1,705.85
5. Bar length	9.15	371.62	3,400.32
6. Type "A" machines	0.00	957.39	0.00
7. Type "B" machines	0.91	2.903,66	2,642.33
Previous net performance (sum)			37,893.84

Note: The benefit for cessation of activity is considered work income and therefore does not count as income from economic activity.

Phase 2: Determination of reduced net income.

1. Minority for employment incentives .

Minority coefficient due to increase in the number of salaried people .

- Increase in the number of salaried people: 1 person

Note: The workforce has been increased compared to the one existing in the 2021 financial year since in that year only 1 of its 3 workers was employed in the activity for a few months, while in 2022, 2 of them were employed, for which reason this coefficient is applied.

-Increase in the number of units of the "salaried personnel" module in 2022 compared to 2021:

Number of units of the "salaried personnel" module in 2021: 600 ÷ 1,800 = 0.33

Number of units of the "salaried personnel" module in 2022: 1.41

Increase in the number of units: 1.41– 0.33 = 1.08 people

If both requirements are met, the positive difference between the number of units of the "salaried personnel" module in 2022 compared to 2021 will be multiplied by 0.40.

Coefficient for increase in the number of salaried people: 0.40 x 1.08 = 0.432.
Reduction coefficient by sections of the number of units of the "salaried personnel" module.

The coefficient by sections is applied on 0.33 (1.41- 1.08) units of the module as follows:

Up to 1.00: 0.33 x 0.10 = 0.033

Reduction coefficient by sections: 0.033
Reduction coefficient for employment incentives.

It is the result of adding the reduction coefficients by increase in the number of salaried people and by sections of the number of units of the "salaried personnel" module: 0.432 + 0.033 = 0.465
Amount of the reduction for employment incentives.

It is the result of multiplying the reduction coefficient by the annual performance per unit of the "salaried personnel" module: 0.465 x 4,056.30 = 1,886.18 euros.

2. Minority due to investment incentives .

Using the amortization table contained in Order HFP /1335/2021, dated December 1 ( BOE of December 2), and applying the maximum linear amortization coefficients set therein, the amount of the reduction for investment incentives is determined as follows:

Heritage element	Value acquisition⁽¹⁾	Maximum coefficient	Amortizable period	Amortization
Minority due to investment incentives (sum)	6.050
Note to the table: ⁽¹⁾The input VAT is not included in the acquisition value of the fixed assets, since the activity is subject to the simplified VAT regime. ^(Back) ⁽²⁾Despite having been in operation in the company until its closure due to sale, the old tables and chairs cannot be depreciated in 2022, since as of 31-12-2021 these items had already been fully depreciated. ^(Back) ⁽³⁾Since the amount that would result from the application of the maximum coefficient is higher than the amount pending amortization as of 31-12-2021, which amounts to 1,000 euros (acquisition value 9,400 - Accumulated amortization 8,400), the amortization has been carried out for this last amount. ^(Back) ⁽⁴⁾New tables and chairs can be freely depreciated because their unit value is less than 601.01 euros and because, in addition, the total amount of the new assets acquired in 2022 does not exceed the amount of 3,005.06 euros. ^(Back)
Furniture (tables and chairs)	1,500	---	---	--- ⁽²⁾
Coffee maker	9.400	25%	All year	1,000⁽³⁾
Thermal display case	4.000	25%	All year	1,000
Air-conditioning	6.600	25%	All year	1,650
New tables and chairs (freely amortized)	2,400	100%⁽⁴⁾	Irrelevant	2,400

3. Determination of reduced net income

Previous net performance: 37,893.84

less: Reduction for employment incentives: 1,886.18

less: Minority due to investment incentives: 6.050,00

equal to: Reduced net income (37,893.84 – 1,886.18 – 6,050) = 29,957.66

Phase 3: Determination of net module yield.

The correction index for small companies is applicable when the following requirements are met:

That the owner of the activity is a natural person.
That the activity is carried out in a single location.
That there is no more than one vehicle used for the activity and that it does not exceed 1,000 kg of load capacity.
That at no time in 2022 has there been more than two salaried employees.

Therefore: 29,957.66 x 0.90 = 26,961.89

Phase 4: Determination of the net return of the activity.

The general reduction of 15% must first be applied.

Note: The eighth Additional Provision of Order HFP /1172/2022, of November 29 ( BOE of December 1), as a result of the current economic situation, has raised for 2022 the general reduction provided for in the first Additional Provision of Order HFP/1335/2021, of December 1, from 5 to 15 percent.

Furthermore, since all the requirements established for this purpose have been met, the amount of the extraordinary expenses caused by the flood that occurred on August 10 must be deducted.

Therefore:

Net module yield = 26,961.89

less: General reduction (15% s/ 26,961.89) = 4,044.28

less: Extraordinary expenses due to exceptional circumstances: 1,200

equal to: Net income from the activity (26,961.89 – 4,044.28 - 1,200) = 21,717.61

Phase 5: Determination of the reduced net return of the activity.

Reduction for irregularity

Since there are no returns with a generation period of more than two years or which are considered to be obtained in a notoriously irregular manner over time, the reduced net return from the activity coincides with that determined in phase 4 above, which amounts to 21,717.61 euros.

Comment : Capital gains or losses obtained as a result of the transfer of assets related to the activity (chairs and tables) must be declared in section F2 of the declaration.
Reduction for the exercise of certain economic activities

Since the income from economic activity exceeds 12,000 euros, the reduction in article 32.2.3 does not apply. of the Income Tax Law .

Determination of the total reduced net income of the activity.

The total reduced net income matches the total reduced net income of the activity = 21,717.61