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Practical Income Manual 2023.

Correction index for small companies

Regulations: Instruction 2.3 b.1) Order HFP /1172/2022, of November 29 ( BOE of December 1).

This corrective index is applicable to companies that meet the following requirements :

  1. That the owner of the activity is a natural person.

  2. That carries out the activity in a single location.

  3. That you do not have more than one vehicle used for the activity and that it does not exceed 1,000 kg of load capacity.

  4. That the activity be carried out without salaried personnel or with salaried personnel up to a maximum of two workers.

If these requirements are met, the amount of the corrective index will be that which, depending on the number of employees and, where applicable, the population of the municipality in which the activity is carried out, is indicated below:

  • If the activity is carried out without salaried personnel:

    Population of the municipality in which the activity is carried out Applicable index
    Up to 2,000 inhabitants 0.70
    From 2,001 to 5,000 inhabitants 0.75
    More than 5,000 inhabitants 0.80

    When, because the activity is carried out in several municipalities, there is the possibility of applying more than one index of those previously indicated, a single index will be applied, which will be the one corresponding to the municipality with the largest population.

  • If the activity is carried out with salaried personnel, up to a maximum of two workers, the index 0.90 will be applied regardless of the population of the municipality in which the activity is carried out.

    For the purposes of applying the corrective index of 0.90 percent for small companies with up to two workers in the objective estimation method of Personal Income Tax , the magnitude consisting of a maximum of 2 workers must be computed based on the prorated annual number of hours per worker established in the corresponding collective agreement. Doctrine established in the Supreme Court Judgment number 1667/2023, of December 13, of the Second Section of the Contentious-Administrative Chamber, issued in the cassation appeal no. 2702/2022 ( RED : STS 5697/2023).