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Practical Income Manual 2023.

Practical Case

Special category bar (heading IAE : 673.1), located in a rented premises in which since its opening in 1995, 3 full-time salaried people have worked with the owner according to the Collective Agreement of the sector, which establishes a working day of 1,800 hours per year. The owner does not carry out any other economic activity.

In the previous fiscal year (2022), the number of units in the "salaried personnel" module amounted to 3 people.

In fiscal year 2023, the data to take into account are the following.

  1. On September 1, 2 new workers over 19 years of age were hired who remained in the company as of December 31, 2023, each of whom has totaled 600 hours of work in said year. The total remuneration paid to staff in fiscal year 2023 amounted to 41,500 euros.

  2. The length of the bar counter is 10 meters and there are 8 authorized tables for four people.

  3. The contracted electrical power is 35 kilowatts and a type "B" recreational machine is installed on the premises.

  4. Of the assets assigned to the activity, the owner only keeps invoices for the coffee maker, a thermal display case, the air conditioning installation and the 8 tables with their chairs. The data that appears in your investment property record book is the following:

    Element Start of use Cost price Accumulated amortization as of 12-31-2022
    Furniture (tables and chairs) 06-01-2018 1,500 euros 1,500 euros
    Coffee maker 01-06-2019 9,400 euros 8,400 euros
    Thermal display case 01-07-2020 4,000 euros 2,500 euros
    Air conditioner installation 01-08-2020 6,600 euros 3,900 euros

  5. To replace the tables and chairs of the establishment, the owner on February 1, 2023 acquired 8 new tables and 32 chairs for 2,400.00 euros, without the unit value of any of said furniture exceeding the amount of 601.01 euros.

    Said furniture has been installed in the bar on the 15th of the aforementioned month. He sold the old furniture for 510.00 euros.

  6. On August 10, 2023, a flood occurred in the bar, causing damage whose repair amounted to 1,200.00 euros, without the owner's insurance policy covering the aforementioned risk. On September 1, the owner of the activity submitted a document to the Tax Agency Administration corresponding to his tax domicile, communicating the aforementioned events and providing an invoice for the repairs carried out along with the document proving the flood issued by the fire service. of the town. By the competent services of the Tax Agency Administration, the certainty of the cause that motivated the extraordinary expense and its amount has been verified.

  7. The taxpayer has not obtained other income during the year.

Solution

1 Phase: Determination of prior net performance.

1. Determination of the number of computable units of each of the modules applicable to activity .

Module 1. Salaried staff

Previous note: Salaried personnel are quantified based on the number of hours actually worked annually by each worker in the activity.

  • 3 people all year round: (3 x 1,800 hours ÷ 1,800) = 3.00 people.

  • 2 people hired on 09-01-2023: (2 x 600 hours ÷ 1,800) = 0.66 people

  • Total: 3.66 people.

Module 2. Non-salaried staff: The owner: 1.00 person

Module 3. Electrical power . Contracted kilowatts: 35.00 kWh

Module 4. Tables . Tables for 4 people: 8 tables

Module 5 . Bar length. Linear meters: 10.00ml

Module 6. Type "A" recreational machines.

The premises do not have any type "A" recreational machines. Therefore, number of units = 0.00

Module 7. Type "B" recreational machines.

The premises have 1 type “B” recreational machine installed: Therefore, the number of units is: 1.00 machine.

2. Application to the number of units of each module of the annual yield per unit before amortization established in Order HFP /1172/2022, of November 29 (BOE of December 1).

Module No. units Performance per unit Performance per module
1. Salaried staff 3.66 4,056.30 14,846.06
2. Non-salaried Staff 1.00 15,538.66 15,538.66
3. Electrical power 35.00 321.23 11,243.05
4. Tables 8.00 233.04 1,864.32
5. Bar length 10.00 371.62 3,716.20
6. Type "A" machines 0.00 957.39 0.00
7. Type "B" machines 1.00 2,903.66 2,903.66
Previous net performance (sum) 50,111.95

2 Phase: Determination of the reduced net return.

1. Minority for employment incentives .

  1. Minority coefficient due to increase in the number of salaried people .

    -Increase in the number of units of the "salaried personnel" module in 2023 compared to 2022:

    Number of units of the "salaried personnel" module in 2022: 3.00 people

    Number of units of the "salaried personnel" module in 2023: 3.66 people

    Increase in the number of units: 3.66– 3.00 = 0.66 people

    When both requirements are met, the positive difference between the number of units of the "salaried personnel" module in 2023 compared to 2022 will be multiplied by 0.40.

    Coefficient for increase in the number of salaried people: 0.40 x 0.66= 0.264.

  2. Reduction coefficient by sections of the number of units of the "salaried personnel" module.

    The coefficient by sections is applied to 3.00 (3.66- 0.66) units of the module in the following way:

    Up to 1.00: 1.00 x 0.10 = 0.10

    Between 1.01 and 3.00: 2.00 x 0.15 = 0.30

    Reduction coefficient by sections: (0.10 + 0.30): 0.40

  3. Reduction coefficient for employment incentives.

    It is the result of adding the reduction coefficients by increase in the number of salaried people and by sections of the number of units of the "salaried personnel" module: 0.264 + 0.40 = 0.664

  4. Amount of the reduction for employment incentives.

    It is the result of multiplying the minor coefficient by the annual performance per unit of the "salaried personnel" module: 0.664 x 4,056.30 = 2,693.38 euros.

2. Minority due to investment incentives .

Using the amortization table contained in Order HFP /1172/2022, of November 29 ( BOE of December 1), and applying the maximum linear amortization coefficients set therein, the amount of the reduction for investment incentives is determined as follows:

Minority due to investment incentives (sum) 6,050

Note to the box:

(1) The input VAT is not included in the acquisition value of the fixed assets, since the activity is subject to the simplified VAT regime. (Back)

(2) Despite having been in operation in the company until it was terminated due to sale, it is not possible to amortize the old tables and chairs in 2023, since as of 12-31-2022 these elements were already completely amortized. (Back)

(3) As the amount that would result from the application of the maximum coefficient is higher than the amount pending amortization as of 12-31-2022, which amounts to 1,000 euros (acquisition value 9,400 - Accumulated amortization 8,400), the amortization has been carried out by the latter amount. (Back)

(4) The new tables and chairs can be freely amortized because their unit value is less than 601.01 euros and because, in addition, the global amount of the new assets acquired in 2023 does not exceed the amount of 3,005.06 euros. (Back)
heritage element Value acquisition(1) Maximum coefficient Amortization period Amortization
Furniture (tables and chairs) 1,500 --- --- --- (2)
Coffee maker 9,400 25% All year 1,000(3)
Thermal display case 4,000 25% All year 1,000
Air-conditioning 6,600 25% All year 1,650
New tables and chairs (freely amortized) 2,400 100%(4) Irrelevant 2,400

3. Determination of the net reduced return

Previous net performance: 50,111.95

less: Reduction for employment incentives: 2,693.38

less: Minority due to investment incentives: 6,050.00

equal to: Minorized net return (50,111.95–2,693.38–6,050) = 41,368.57

3 Phase: Determination of net performance of modules.

The only corrective index applicable in this example is the excess corrective index, because the reduced net return exceeds the amount of 30,586.03 euros. Therefore:

Net performance of modules = 30,586.03 + [1.30 x (41,368.57 – 30,586.03)] = 44,603.33 euros.

4 Phase: Determination of the net performance of the activity.

It is appropriate to apply, first of all, the general reduction of 10 percent.

Note: Article 61.Two of Law 31/2022, of December 23, on the General State Budgets for the year 2023 ( BOE of December 24) by which the Provision is added Fifty-fourth additional to the Personal Income Tax Law and the Additional Provision first Order HFP /1172/2022, of November 29, by which they are developed For the year 2023, the objective estimation method in Personal Income Tax has raised to 10 percent the general reduction applicable to the net yield of modules obtained in the 2023 tax period.

Likewise, once all the requirements established for this purpose are met, the amount of the extraordinary expenses caused by the flood that occurred on August 10 must be deducted.

Therefore:

Net performance of modules = 44,603.33

less: General reduction (10% s/44,603.33) = 4,460.33

less: Extraordinary expenses due to exceptional circumstances: 1,200

equal to: Net performance of the activity (44,603.33– 4,460.33–1,200) = 38,943

5 Phase: Determination of the reduced net return of the activity.

  1. Reduction due to irregularity

    As there are no returns with a generation period of more than two years or that are considered to have been obtained in a notoriously irregular manner over time, the reduced net return of the activity coincides with that determined in the previous phase 4, which amounts to 38,943 euros.

    Comment : The capital gains or losses obtained as a result of the transfer of the assets affected by the activity (chairs and tables) must be declared in section F2 of the declaration.

  2. Reduction for the exercise of certain economic activities

    Since the income from economic activity exceeds 12,000 euros, it is not appropriate to apply the reduction in article 32.2.3. of the Personal Income Tax Law .

Determination of the total reduced net return of the activity.

The total reduced net return coincides with the total reduced net return of the activity = 38,943 euros