Introduction

Regulations: Articles 28.1 and 30 Law IRPF , 30 Regulation IRPF ; 12 to 16 LIS and 3 to 7 Regulation IS

The determination of the net income from economic activities using the direct estimation method is carried out in accordance with the Corporate Tax (IS) regulations, without prejudice to the rules contained for this purpose in the Personal Income Tax Law and Regulations.

By virtue of this reference to the Corporate Tax regulatory block, the determination of net income must be carried out by correcting, through the application of the qualification, valuation and imputation criteria established in the aforementioned regulations, the accounting result determined in accordance with the provisions of the Commercial Code and its development regulations, especially those contained in the General Accounting Plan. 

However, given that in the area of IRPF the obligation to keep accounting records in accordance with the Commercial Code and other implementing regulations does not affect all taxpayers who carry out economic activities, corrections or adjustments of a fiscal nature must be made as follows:

• Taxpayers required to keep accounting records in accordance with the Commercial Code (holders of commercial business activities whose net income is determined using the normal method of direct estimation): They must apply corrections and adjustments of a fiscal nature to the components of the accounting result, that is, to income and expenses.

• Taxpayers who are not required to keep accounting records in accordance with the Commercial Code (holders of non-commercial business activities, professionals, artists or athletes, regardless of the method of determining their net income and holders of business activities whose net income is determined using the simplified form of the direct estimation method): They must apply these same tax principles to the income and expense records that appear in their registration books to formulate the net income of the activity.

In short, the determination of net income in the direct estimation method, in any of its forms, must be carried out based on the tax concepts of total income and tax-deductible expenses that appear in the declaration form.

To do this, the tax criteria for imputation, qualification and valuation detailed below must be applied to each of the items that are considered computable income and deductible expenses, as well as the tax incentives established for small companies .