Phase 4: Determination of the net performance of the activity
In accordance with the regulations governing the objective estimation method, contained in Annex I and in the first Additional Provision of Order HFP /1335/2021, of December 1 ( BOE of December 2), to determine the net income of the activity, the following reductions may be made:
1. General reduction: 25 percent
Regulations: Additional Provision Eighth Order HFP /1172/2022, of November 29 ( BOE of December 1), Additional Provision First Order HFP /1335/2021, of December 1 ( BOE of December 2) and article 2 of Order HFP /405/2023, of April 18 ( BOE of April 25).
By 2022, the net performance of modules of agricultural, livestock and forestry activities, as well as transformation processes, determined as discussed in phase 3 above, may be reduced by the percentage of 25 per 100 .
Note: article 2 of Order HFP /405/2023, of April 18, by which the net return indices and the general reduction applicable in the method are reduced for the 2022 tax period of objective estimation of the Personal Income Tax for agricultural and livestock activities affected by various exceptional circumstances ( BOE of April 25), has raised the reduction provided for in First Additional Provision of Order HFP /1335/2021, which was previously increased from 5 to 15 by Eighth Additional Provision of Order HFP / 172/2022, of November 29, by which they are developed for the year 2023 the method of objective estimation of personal income tax.
2. Young farmers reduction: 25 percent
Regulations: Additional Provision Sixth Law Personal Income Tax and instruction 3 of Annex I Order HFP /1335/2021, of December 1 ( BOE of December 2)
Young farmers (over 18 years of age and under 40 years of age) or agricultural employees may reduce the net yield of modules, resulting after applying the general reduction, by 25 percent in each of the tax periods closed during the five years following their first installation as owners of a holding that has a priority status, carried out under the provisions of Chapter IV of Title I of Law 19/1995, of July 4, on the Modernization of Agricultural Holdings , provided they prove the completion of a plan to improve the operation.
For these purposes, the status of priority exploitation must be accredited by certification issued by the corresponding body of the Autonomous Community, or by inclusion in the General Catalog of Priority Exploitations of the Ministry of Agriculture, Fisheries and Food.
See Royal Decree 613/2001, of June 8, on the improvement and modernization of the production structures of agricultural holdings ( BOE of 9).
3. Reduction for economic activities carried out on the Island of La Palma: 20 percent
Regulations: Additional Provision Sixth Order HFP /1172/2022, of November 29 ( BOE of December 1)
For those taxpayers who carry out their economic activity on the Island of La Palma and determine the net return of said activity by the objective estimation method, the net return of 2022 modules corresponding to such activities may be reduced by a 20 percent.
The reduction must be entered in box  of the declaration.
Attention: Due to the consequences of the volcanic eruptions that occurred on the Island of La Palma, it is established, by Additional Provision sixth of Order HFP /1172/2022, of 29 of November, by which the objective estimation method is developed for the year 2023, has established for the economic activities carried out on said island, a special reduction, similar to that established for the municipality of Lorca, to cause of the earthquake that occurred in said municipality. These reductions will apply in both 2022 and 2023.
4. Extraordinary expenses due to exceptional circumstances
Regulations: See common standard 2 of Annex III Order HFP /1335/2021, of December 1 ( BOE of December 2)
When the development of the activity has been affected by fires, floods, subsidence or other exceptional circumstances that have led to extraordinary expenses unrelated to the normal process of the exercise of that activity, the interested parties may reduce the resulting net return by the amount of said expenses. To do this, taxpayers must have brought this circumstance to the attention of the Administration or, failing that, the Tax Agency Delegation, within a period of 30 days from the date on which it occurs, providing for this purpose the corresponding justification and mentioning, where appropriate, the compensation to be received due to such alterations, so that the Tax Administration verifies the certainty of the cause that motivates the reduction in performance and the amount thereof.
See in this regard Royal Decree-Laws 10/2021, of May 18, which adopts urgent measures to alleviate the damage caused by the storm "Filomena" (BOE of May 19) and 20/2021, of May 5. October, by which urgent support measures are adopted for the repair of the damage caused by the volcanic eruptions and for the economic and social reconstruction of the island of La Palma ( BOE of 6 October). Likewise, see Royal Decree-Law 28/2021, of December 17, which adopts urgent complementary measures to repair the damage caused by volcanic eruptions and for the economic and social recovery of the island of La Palma (BOE of December 18).