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Practical manual for Income Tax 2023.

Scope of application of the simplified modality

Regulations: Art. 28 Regulation Income Tax

Requirements

The simplified form of the direct estimation method is voluntary , so the taxpayer may waive its application . In the absence of a waiver, this modality must be applied in the 2023 fiscal year to determine the net income of all economic activities carried out by the taxpayer, provided that:

a. Do not determine the net income of all your activities by the objective estimation method .

For these purposes, it should be noted that the economic activities eligible for the objective estimation method and the requirements for their inclusion can be consulted in Chapters 8 and 9 .

b. The net amount of the turnover of the previous year , corresponding to all the activities carried out by the taxpayer, does not exceed 600,000 euros per year .

For the purposes of determining this exclusive limit, the VAT accrued and, where applicable, the passed-on equivalence surcharge will not be computed as income, in cases where the activity carried out is taxed. by the general regime or by the special simplified VAT regime, since in these regimes taxpayers are obliged to present the corresponding VAT settlements.

Now, when the activities are taxed by the special regime of the equivalence surcharge or by the special regime for agriculture, livestock and fishing of VAT , the VAT quotas ##2##theoretically passed on by the equivalence surcharge regime or the compensation derived from the special regime for agriculture, livestock and fishing must be included within the volume of income from the aforementioned activities, given that in these regimes the affected taxpayers do not have to make any settlement of VAT , this tax being, in any case, a greater income or a greater expense of the activity.

When the activity had been started in the immediately preceding year, the net amount of the turnover will be raised to the year, for these purposes only.

When no activity was carried out in the immediately preceding year, the income will be determined by this modality, unless it is waived under the terms discussed below.

c. No activity carried out by the taxpayer is in the normal mode of the direct estimation method.

Note: with the exception of activities included in the objective estimation method, in first year of carrying out the activity, the net income will be determined by this method, unless it expressly waived, regardless of the net amount of the resulting turnover at the end of the year.

Determination of the net amount of sales revenue

The net amount of turnover is made up of the difference between the following positive and negative items:

Positive games

  • The amount from the sale of products and the provision of services or other income derived from the ordinary activity of the company, understood as the activity that the company carries out regularly and from which it obtains its periodic income.

    It should be noted that, on certain occasions, in business reality, several activities are carried out simultaneously, which could be called multi-activity. In this case, in relation to the determination of the "net amount of turnover", it must be understood that the income produced by the different activities of the company will be considered in the calculation of ordinary activities, to the extent that they are obtained regularly and periodically and are derived from the economic cycle of production, marketing or provision of services of the company, that is, from the circulation of goods and services that are the object of its traffic.

    In no case are products for sale consumed by the company itself, or work carried out for itself, included in the annual turnover amount.

  • The purchase price or production cost of goods or services delivered in exchange for non-monetary assets or as consideration for services that represent expenses for the company.

    Exchanges of homogeneous elements, such as exchanges of fungible raw materials between two companies or exchanges of finished products or interchangeable merchandise between two traders are not included in this heading and are therefore excluded

  • The amount of subsidies granted to the company individually based on and forming part of the price of the product units sold or the level of services provided.

    Neither the amount of the remaining subsidies nor the financial income are included.

    Therefore, "subsidies" are generally not included in determining the net amount of turnover, and are only admitted in exceptional cases that occur within the framework of certain specific activities, in which the subsidy is granted on an individual basis, based on units of product sold or services provided.

Negative items

In all cases, the following items shall be deducted from the amount obtained in accordance with the provisions of the previous section:

  • The amounts of sales returns.

  • "Rebates" on sales or provision of services.

  • Trade discounts made on income computed in the annual turnover.

  •  Early payment discounts granted outside of invoice.

  • VAT and Special Taxes (which are levied on the manufacture or import of certain goods), if they have been computed within the amount of sales or the provision of services and must be passed on .

See article 35.2 of the Commercial Code; the Standard for the preparation of annual accounts (NECA) 11 of the General Accounting Plan, approved by Royal Decree 1514/2007, of November 16 ( BOE of November 20) and NECA 9 of the General Plan for Small and Medium-sized Enterprises and the specific accounting criteria for micro-enterprises, approved by Royal Decree 1515/2007, of November 16 ( BOE of November 20), as well as article 34 of the Resolution of February 10, 2021 (BOE of February 13), of the Institute of Accounting and Auditing of Accounts (ICAC).