Method and modalities of determining the net income of economic activities

Regulations: Art. 16 LawPIT

Introduction

The methods for determining the net income from business, commercial or non-commercial activities, and professional activities are as follows:

Direct estimation, which supports two modalities: normal and simplified.
Objective estimate, which is applied as a voluntary method to each of the economic activities, considered in isolation, determined by the Minister of Finance.

Without prejudice to the detailed commentary on each of the methods and modalities of determining net income in the corresponding chapters of the Manual, the tables in the following sections contain the most significant notes on each of these methods and modalities.

Note: Royal Decree-Law 16/2025, of December 23 (BOEof December 24), has modified, with effect from January 1, 2025, the thirty-second transitional provision of the Law of IRPFABBR, to extend to the tax periods 2025 and 2026 the application of the same exclusionary quantitative limits set for the fiscal years 2016 to 2024: 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).