Phase 2. Determination of reduced net yield

To determine reduced net income, the following reductions will be applied to the net income calculated in accordance with the provisions of Phase 1 above:

A) Reduction for returns with a generation period of more than two years or obtained in a notoriously irregular manner

Regulations: Articles 32.1 Personal Income Tax Law and 25 Regulation Personal Income Tax

This reduction may be applied to the calculated net yield where appropriate, the most notable aspects of which are as follows:

1. Yields to which it applies and percentage of reduction

The following returns will be reduced by 30% :

1. Net income whose generation period is greater than two years, provided that it is attributed to a single tax period.

2. Net returns obtained in a notoriously irregular manner over time.

   The following are considered to be income from economic activities obtained in a notoriously irregular manner over time, exclusively, when they are imputed in a single tax period :

   1. Capital grants for the acquisition of non-depreciable fixed assets.

   2. Compensation and aid for cessation of economic activities.

   3. Literary, artistic or scientific prizes that do not benefit from exemption from this tax. For these purposes, economic compensation derived from the transfer of intellectual or industrial property rights or that replace these are not considered prizes.

   4. Compensation received in lieu of economic rights of indefinite duration.

2. Maximum amount of performance to which the reduction applies

The amount of net income to which the 30% reduction will be applied may not exceed the amount of 300,000 euros per year .

In the event that several irregular returns of the same nature are obtained, and their amount exceeds the limit of 300,000 euros of maximum amount on which to apply the 30% reduction, the maximum reduction will be distributed proportionally between all the returns of that nature.

Important: This reduction will not apply to those returns that, even though they could individually derive from actions carried out over a period that meets the requirements indicated above, come from the exercise of an economic activity that regularly or habitually obtains this type of returns.

3. Income received in installments before January 1, 2015: Transitional scheme

Regulations: Twenty-fifth transitional provision.3 Law IRPF

Any income received in installments prior to 1 January 2015 that is entitled to apply the reduction in Article 32.1 of the Income Tax Law as amended as of 31 December 2014, may apply the current reduction of 30 , up to a maximum reduction base of 300,000 euros, to each of the installments imputed as of January 2015, provided that the quotient resulting from dividing the number of years of generation, computed from date to date, by the number of tax periods to be paid in installments is greater two.

However, when it concerns income derived from commitments acquired prior to January 1, 2015, which were scheduled to begin being collected in installments in tax periods beginning on or after said date , the substitution of the initially agreed form of collection for its collection in a single tax period will not alter the start of the period for generating the income.

B) Reduction for income under the special regime “XXXVII Copa América Barcelona”

Individuals who become personal income tax payers as a result of their travel to Spanish territory for the “XXXVII Copa América Barcelona” event may apply a reduction of 65 on the net amount of income obtained from the organizing entity or the teams participating in the “XXXVII Copa América Barcelona”, to the extent that they are directly related to their participation in said event

New for 2023: the reduction for income under the special regime “XXXVII Copa América Barcelona” will be applied to the previous net income of the economic activity using the direct estimation method, once applied, where appropriate, the reduction for income with a generation period of more than two years or obtained in a notoriously irregular manner over time, discussed in letter A) above .