Phase 4: Determination of the net performance of the activity

In accordance with the regulations governing the objective estimation method, contained in Annex I and in the first Additional Provision of Order HFP /1172/2022, of November 29 ( BOE of December 1), to determine the net income of the activity, the following reductions may be made:

1. General reduction: 15 percent

Regulations: Additional Provision fifty-fourth Law IRPF and Additional Provision first Order HFP /1172/2022, of November 29 ( BOE of December 1) .

By 2023, the net performance of modules of agricultural, livestock and forestry activities, as well as transformation processes, determined as discussed in phase 3 above, may be reduced by a percentage of 15 percent 1## ##1##.

Note: article 2 of Order HAC /348/2024, of April 17, which modifies for the 2023 tax period the net return indices and the general reduction applicable in the method of objective estimation of the Personal Income Tax for agricultural and livestock activities affected by various exceptional circumstances ( BOE of April 19), has raised the reduction provided for in article 61.One of Law 31/2022, of December 23, on General State Budgets for the year 2023, which added the fifty-fourth Additional Provision to the Personal Income Tax Law , and the first Additional Provision of Order HFP /1172/2022, of November 29, by which the method for objective estimation of personal income tax is developed for the year 2023 ( BOE of December 1).

2. Young farmers reduction: 25 percent

Regulations: Additional Provision Sixth Law Personal Income Tax and instruction 3 of Annex I Order HFP /1172/2022, of November 29 ( BOE of December 1)

Young farmers (over 18 years of age and under 40 years of age) or agricultural employees may reduce the net yield of modules, resulting after applying the general reduction, by 25 percent in each of the tax periods closed during the five years following their first installation as owners of a holding that has a priority status, carried out under the provisions of Chapter IV of Title I of Law 19/1995, of July 4, on the Modernization of Agricultural Holdings , provided they prove the completion of a plan to improve the operation.

For these purposes, the status of priority exploitation must be accredited by certification issued by the corresponding body of the Autonomous Community, or by inclusion in the General Catalog of Priority Exploitations of the Ministry of Agriculture, Fisheries and Food.

See Royal Decree 613/2001, of June 8, on the improvement and modernization of the production structures of agricultural holdings ( BOE of June 9).

3. Reduction for economic activities carried out on the Island of La Palma: 20 percent

4. Extraordinary expenses due to exceptional circumstances

Regulations: See common standard 2 of Annex III Order HFP /1172/2022, of November 29 ( BOE of December 1)

When the development of the activity has been affected by fires, floods, subsidence or other exceptional circumstances that have led to extraordinary expenses unrelated to the normal process of the exercise of that activity, the interested parties may reduce the resulting net return by the amount of said expenses. To do this, taxpayers must have brought this circumstance to the attention of the Administration or, failing that, the Tax Agency Delegation, within a period of 30 days from the date on which it occurs, providing for this purpose the corresponding justification and mentioning, where appropriate, the compensation to be received due to such alterations, so that the Tax Administration verifies the certainty of the cause that motivates the reduction in performance and the amount thereof.