Performance of economic activities

Directly estimated economic activities

Determination of net income

• Deductible expenses

  a) Expenses of the activity holder on social security and contributions to mutual societies alternative to social security

  Two new features stand out:

  • As of January 1, 2023, all self-employed or freelance workers included in this special regime will pay contributions based on the annual income obtained in the exercise of their economic, business or professional activities, having to choose the monthly contribution base that corresponds to their forecast of annual net income, within the general table established in the respective General State Budget Law and limited by a minimum contribution base in each of its sections and by a maximum base in each section for each year, although with the possibility, when they foresee that their income will be lower than the interprofessional minimum wage on an annual basis, to choose a contribution base within a reduced table.

    The chosen bases will be provisional until they are regularised based on the annual income obtained and reported by the tax authorities from the following year for each self-employed worker.

  • Law 31/2022, of December 23, on the General State Budget, sets the maximum quota for common contingencies for 2023, which operates as a limit for deductible expenses as an alternative mutual fund to the special Social Security regime for self-employed workers (RETA), at 15,266.72 euros. [0.283 x (4,495.50 x 12)]

  b) Expenses that are difficult to justify in simplified direct estimation during the 2023 tax period

  An Additional Provision fifty-sixth is added to the IRPF Law to raise from 5 to 7 percent the deduction percentage for all deductible provisions and expenses that are difficult to justify referred to in article 30 of the IRPF Regulations.

• Repayments

  a) Accelerated depreciation of certain vehicles and new infrastructures

  As of January 1, 2023, the possibility of amortizing certain investments in items related to economic activities that come into operation in the tax periods beginning in 2023, 2024 and 2025 is established, based on the coefficient resulting from multiplying by 2 the maximum linear amortization coefficient provided for in the officially approved amortization tables, subject to compliance with certain requirements and conditions. Specifically, this allows for amortization of investments in:

  • Certain new vehicles FCV , FCHV , BEV , REEV or PHEV .

  • New electric vehicle charging infrastructure.

  b) Freedom of amortization on investments that use energy from renewable sources.

  Investments in facilities intended for the following purposes may be freely amortized in the 2023 tax period: 

  • Self-consumption of electrical energy using energy from renewable sources as defined in Royal Decree 244/2019, of April 5.

  • Thermal use for own consumption that uses energy from renewable sources, replacing installations that use energy from non-renewable fossil sources.

  This tax incentive will only apply to those investments that came into operation in the years 2023 and 2024.

Determination of reduced net income

Reduction of the “XXXVII Copa América Barcelona”

The thirty-sixth Final Provision of the General State Budget Law for the year 2023 allows natural persons who carry out economic activity using the direct estimation method to apply a special reduction of 65% on the net amount of income they receive from the organizing entity or the teams participating in the “XXXVII Copa América Barcelona” during the celebration of said event and to the extent that they are directly related to their participation in it, for the calculation of the reduced net income of their activity.

Determination of Total Reduced Net Return

General reductions for the exercise of certain economic activities

Regarding the additional reduction applicable to economically dependent self-employed workers, both the maximum amount of the same is raised from 3,700 euros per year to 6,498 euros per year, as well as the threshold of net income from economic activities, which goes from 14,450 euros to 19,747.5 euros, provided that they do not have income, excluding exempt income, other than that from economic activities exceeding 6,500 euros.

Objectively estimated economic activities

1. Resignation and consequences of resignation:

   For the 2023 financial year, a new deadline has been established to exercise the waiver or revocation of the waiver to the application of the objective estimation method, which runs from December 25, 2022 to January 31, 2023. However, resignations or revocations submitted for the year 2023, during the month of December 2022, prior to the start of the previously indicated period, were understood to have been submitted during the valid period. However, taxpayers may modify the option exercised during the month of December, if applicable, within the period between December 25, 2022 and January 31, 2023.

2. Exclusionary limits:

   • 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 to 2022: both those relating to the volume of gross income in the immediately preceding year derived from the exercise of economic activities (250,000 euros for all economic activities, except for agricultural, livestock and forestry activities and 125,000 euros for operations for which there is an obligation to issue an invoice when the recipient is a businessman) and to the volume of purchases of goods and services (250,000 euros, excluding the acquisition of fixed assets, for all activities in objective estimation - also including agricultural, livestock and forestry activities).

   • For agricultural, livestock and forestry activities, the exclusion limit provided for in article 31 of the Personal Income Tax Law applies for the volume of gross income in the immediately preceding year (250,000 euros per year, for all agricultural, livestock and forestry activities carried out by the taxpayer) and, for the volume of purchases in goods and services, the amount of 250,000 euros, excluding acquisitions of fixed assets, for all activities in objective estimation, provided for in the thirty-second transitional provision in the Personal Income Tax Law and whose application is extended to the year 2023.

3. Determination of prior net performance:

   Order HFP /1172/2022, of November 29 ( BOE of December 1), by which the objective estimation method of the Personal Income Tax and the simplified special regime of the Value Added Tax are developed for the year 2023, maintains, in general, for the year 2023 the amount of the signs, indices or modules of the previous year with the exception of the net yield indices applicable to the following products derived from agricultural activities:

   • table grapes: is reduced from 0.42 to 0.32

   • flowers and ornamental plants: is reduced from 0.42 to 0.32, and

   • tobacco: is reduced from 0.37 to 0.26

    Likewise, the treatment of direct aid decoupled from the Common Agricultural Policy is being reviewed for the year 2023, so that their taxation in proportion to the income from their crops or farms is conditional on obtaining a minimum income from the activity other than that of the direct aid itself.

4. Determination of reduced net income:

   For agricultural and livestock activities, the existing reductions on previous net income, applicable before the amortization of tangible and intangible fixed assets, are maintained, that is:

   • 35% reduction in the purchase price of agricultural diesel.

   • 15% reduction in the purchase price of fertilizers.

   In both cases, the acquisitions must be necessary for the development of said activities, must have been made in the year 2023 and must be documented in invoices issued in said period that meet the requirements set forth in Royal Decree 1619/2012, of November 30, which approves the Regulation governing billing obligations.

5. Determination of net module yield:

   The correction rate for feed purchased from third parties is set at 0.50 percent and the rate for crops on irrigated land that use electric power for this purpose is set at 0.75 percent of the yield from crops grown on irrigated land using electric power.

   For the application of this index, the requirement that the average daily electricity consumption, in terms of energy billed in kWh , of the bill for the month of the tax period with the highest consumption be at least 2.5 times higher than that corresponding to two months of the same tax period is also eliminated.

6. Determination of the net income of the activity: applicable reductions:

   • General reduction: The general reduction applicable to the net income from modules obtained in the 2023 tax period by taxpayers in an objective estimate with activities other than agricultural, livestock and forestry is set at 10 percent.

   • In the case of agricultural, livestock and forestry activities, article 2 of Order HAC /348/2024, of April 17, ( BOE of April 19), has raised for the 2023 tax period said general reduction percentage from 10 to 15 percent.

   • Lorca reduction: The 20% reduction in net income for economic activities carried out in the municipal area of Lorca (Murcia) is maintained, applicable only to determine net income in activities other than agricultural, livestock and forestry. 

   • Reduction of La Palma Island: The 20% reduction in net income for taxpayers who carry out economic activities on the island of La Palma will be maintained in 2023.

     This reduction, unlike that of Lorca, applies to all economic activities that determine net income in the objective estimation method, including agricultural, livestock and forestry activities.