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), the following reductions may be made to determine the net income of the activity:

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 yield of modules from agricultural, livestock and forestry activities, as well as from transformation processes, determined in accordance with the above phase 3, may be reduced by 15% .

Note: Article 2 of Order HAC /348/2024, of April 17, which modifies for the tax period 2023 the net return indices and the general reduction applicable in the objective estimation method of the Personal Income Tax for agricultural and livestock activities affected by various exceptional circumstances ( BOE of April 19), has raised from 10 to 15 percent the reduction provided for in article 61.One of Law 31/2022, of December 23, on the General State Budget for the year 2023, which added the Fifty-fourth Additional Provision to the Law of IRPF , and the First Additional Provision of Order HFP /1172/2022, of November 29, by which the objective estimation method of personal income tax is developed for the year 2023 ( BOE of December 1).

2. Reduction of young farmers: 25 percent

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

Young farmers (over 18 and under 40) or agricultural wage earners may reduce the net module yield resulting from applying the general reduction by 25% in each of the tax periods closed during the five years following their first installation as owners of a farm with 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 that they prove the implementation of a plan to improve the farm.

For these purposes, the priority farm status must be accredited by a certificate issued by the corresponding body of the Autonomous Community, or by inclusion in the General Catalogue of Priority Farms 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 per 100

4. Extraordinary expenses due to exceptional circumstances

Regulations: See common rule 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 determined extraordinary expenses outside the normal process of carrying out the activity, the interested parties may reduce the resulting net income by the amount of said expenses. To do so, taxpayers must have informed the Administration or, failing that, the Tax Agency Delegation, of this circumstance within 30 days from the date on which it occurs, providing the corresponding justification for this purpose and mentioning, where appropriate, the compensation to be received due to such alterations, so that the Tax Administration can verify the certainty of the cause that motivates the reduction in income and the amount thereof.