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Practical manual for Income Tax 2023.

3.1 Exclusive quantitative limits

The following quantitative limits constitute causes for exclusion from the objective estimation method:

A. Having reached in the previous year (2022) a volume of income greater than 250,000 euros per year , for all of its agricultural, livestock and forestry activities carried out by the taxpayer

Regulations: Art. 32.2 a) Regulation Personal Income Tax . See also art. 3.1 b) Order HFP /1172/2022, of November 29 ( BOE of December 1)

When the activity had been started in the immediately preceding year, the volume of income will increase to the year.

To determine these limits, the following operations will be computed:

  • Those that must be recorded in the sales or income record book provided for in article 68.7 of the Personal Income Tax Regulations.

  • Those that must be recorded in the record book provided for in article 40.1 (record book of invoices received) of the VAT Regulation , approved by Royal Decree 1624/1992, of December 29 ( BOE of December 31).

B. Having exceeded in the previous year (2022) the volume of purchases in goods and services for the set of economic activities carried out by the taxpayer the amount of 250,000.00 euros per year, excluding the acquisitions of fixed assets

Regulations: Thirty-second transitional provision Law IRPF and art. 32.2 b) Regulation IRPF

In the case of subcontracted works or services, the amount thereof will be taken into account for the calculation of this limit.

When an activity had been started in the immediately preceding year, the volume of purchases will increase yearly.

Note: and l article 61.Two of Law 31/2022, of December 23, on the General State Budget for the year 2023 ( BOE of December 24) has modified, with effect from January 1, 2023, the thirty-second transitional provision of the Law of Personal Income Tax , to extend to the tax period 2023 the application of the same exclusive quantitative limits set for the years 2016, 2017, 2018, 2019, 2020, 2021 and 2022 .

Rules for determining the volume of gross returns and purchases:

In order to determine the volume of gross income and the volume of purchases of goods and services mentioned above, not only the operations corresponding to the economic activities carried out by the taxpayer must be taken into account, but also those corresponding to those carried out by the spouse, descendants and ascendants, as well as by entities under the income attribution regime in which any of the above participate, in which the following circumstances occur:

  • That economic activities are identical or similar.

    For these purposes, economic activities classified in the same group in the Tax on Economic Activities will be deemed to be identical or similar.

  • That there exists a common direction for such activities, sharing personal or material resources.

In the case of transactions carried out with related entities , under the terms set forth in article 18 of the LIS , they must be valued imperatively at their normal market value, understood as the one that would have been agreed upon by independent persons or entities under conditions of free competition.

Regarding the LIS see Law 27/2014, of November 27, on Corporate Tax.

In these cases, the taxpayer must comply with the documentation obligations for said operations under the terms and conditions established in articles 13 to 16, Chapter V ("Information and documentation on related entities and operations") of Title I of the Corporate Tax Regulations, approved by Royal Decree 634/2015, of July 10 ( BOE of July 11).