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Practical manual for Income Tax 2024. Part 1

Correction index for small companies

Regulations: Instruction 2.3 b.1) Order HFP /1359/2023, of December 19 ( BOE of December 21).

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

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

  2. That the activity is carried out in a single location.

  3. That there is no more than one vehicle used for the activity and that it does not exceed 1,000 kg of load capacity.

  4. That the activity is 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 correction index will be the one indicated below, depending on the number of salaried persons and, where applicable, the population of the municipality in which the activity is carried out:

  • 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, due to the activity being carried out in several municipalities, there is the possibility of applying more than one of the previously mentioned indexes, 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 correction index of 0.90 per 100 for small companies with up to two employees in the objective estimation method of PIT, the magnitude consisting of a maximum of 2 workers must be calculated based on the number of annual hours prorated 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 appeal for cassation number. 2702/2022 ( ROJ : STS 5697/2023).