Special tax imputation criteria of the Personal Income Tax Regulations

Criteria for allocating collections and payments

Regulations: Art. 7.2 Regulation Income Tax

a. In general

Taxpayers who carry out economic activities, with the exception of holders of commercial business activities whose net income is determined by the direct estimation method, standard modality, obliged to keep accounting adjusted to the provisions of the Commercial Code, as well as those who, without being obliged to do so, voluntarily keep such accounting, may opt for the "receipts and payments" criterion to temporarily allocate the income and expenses derived from all their activities.

This criterion will be deemed approved by the Tax Administration by the mere fact of stating it in the corresponding declaration for the IRPF .

The option for this criterion, whose minimum duration is three years, will lose its effectiveness if, after said option, the taxpayer develops any business activity of a commercial nature using the direct estimation method, normal modality, or keeps accounting in accordance with the provisions of the Commercial Code and other regulations for its development.

Precision: Capital grants will be recorded as income for the year in proportion to the depreciation provision made in that period for the aforementioned items or, where appropriate, when their disposal, impairment correction or removal from the balance sheet occurs, even if the taxpayer has previously opted for the criterion of temporary allocation of collections and payments or the cash criterion, given its specialty and the referral that the Tax Law makes to the specific regulations on Corporate Tax and this, in turn, to the accounting result. See in this regard the Third Legal Basis of the Supreme Court Judgment No. 398/2022, of March 30 (Contentious Chamber), issued in cassation appeal no. 8193/2020 ( ROJ : STS 1285/2022).

Attention : Taxpayers who determine net income by normal direct estimation when they are not required to keep accounting adjusted to the Commercial Code (professionals and entrepreneurs who carry out activities that are not of a commercial nature), as well as taxpayers in simplified direct estimation or in objective estimation who opt in 2023 for the collection and payment criterion for the temporary imputation of income and expenses of all their activities, will express this option by marking an "X" in box [0169] (in the case of economic activities in direct estimation), in box [1443] (if it is an economic activity, except agricultural, livestock and forestry, in objective estimation) and in box [1487] (in agricultural, livestock and forestry activities in objective estimation). Likewise, this box/es [0169], [1443] and [1487] will be marked by taxpayers who opted for this temporary imputation criterion in previous tax periods and maintain this option in the current tax period.

b. Entities in the income allocation system

In the case of entities under an income attribution regime, compliance with the requirements to determine the method of estimating the performance of the applicable economic activity is determined at the headquarters of the entity, and said method will be applicable to the entity regardless of the method that corresponds to the commoners, partners or participants for the economic activities developed by them individually or through other entities (Arts. 31 and 39 Regulation IRPF ).

As a result, the accounting or registration books corresponding to the economic activity carried out by the entity under the income attribution regime will be unique for each entity, without the partners, commoners or participants having to keep accounting or registration books corresponding to their participation in the entity; Likewise, the accounting or registration books kept by the entity are independent of those that must be kept by the commoners, partners or participants for the economic activities carried out by them individually or through other entities (Art. 68.8 Personal Income Tax Regulations).

In accordance with the above, to the extent that the requirements for the application of the collection and payment criterion, relating to the method of estimating the performance of the economic activity and formal obligations, must be met by the entity, the application of the collection and payment criterion will correspond to the entity, so it will be necessary for all its members to opt for said application, without consequently it being possible for its partial application by the entity for one or some of its members.

Likewise, since the aforementioned requirements can be met by the entity, but not by each of its members, and vice versa, the application of the collection and payment criteria by the entity will be independent of the temporary imputation criteria that corresponds to the commoners, partners or participants for the economic activities carried out by them individually or through other entities in the attribution of income in which they participate.

Criteria for allocating the advance payment on account of the transfer of the exploitation of copyright

Regulations: Art. 7.3 Regulation Income Tax

In the case of income from professional activities derived from the transfer of the exploitation of copyright that accrue over several years, the taxpayer may choose to allocate the advance payment to the account of the same as the rights accrue.