Practical case

Mr. LHI He is the owner of a rural property where he is engaged in agricultural activities and the farming of meat sheep, whose heads are fed mainly with the grass produced on the property itself, all of which are activities included in the special regime for agriculture, livestock and fishing (VAT) of the Value Added Tax (VAT). The holder does not obtain income from work or carry out any other economic activity.

The products he grows, all of which are intended for sale, consist of corn and various horticultural products (lettuces, beans and chard).
In the 2025 financial year, the cost of salaried personnel corresponding to a person working full-time in the activity since 2008 has amounted to 18,000 euros. The remuneration paid to this employee in the year 2025, included in the cost of salaried personnel, amounts to 14,000 euros.

Mr. LHI It chooses to allocate the income from its activity according to the cash basis, according to which the income corresponding to 2025 that appears in the income register book has been the following:

Subject	Cost	Compensation VAT	Total
Total computable income (euros)			108.515
Income from the sale of corn	49,000	5.880	54,880
Income from the sale of lambs	27,000	2.835	29.835
Income from sales of horticultural products	17,000	2,040	19.040
Income from work carried out for other farmers under the special regime of agriculture, livestock and fishing of the VAT ⁽¹⁾	4.760	-- ⁽²⁾	4.760

Notes to the table:

⁽¹⁾ In the previous year (2024), income from work done for other farmers represented only 6 percent of the total income for that year. Therefore, in 2025 these jobs are considered to be included in the special regime for agriculture, livestock and fishing for the purposes of IVAABBR and do not constitute independent activity for the purposes of the objective estimation method of IRPFABBR, and must be counted as a separate product or service within the single agricultural and livestock activity carried out by its owner. ^(Back)

⁽²⁾Since the recipients of said works are other farmers also covered by the special regime of agriculture, livestock and fishing of the VAT, reimbursement of compensation in relation to these operations is not applicable. ^(Back)

In addition to the above income, Mr. LHI It has recorded in the aforementioned register book another income amounting to 6,250 euros, corresponding to the amount received in 2025 as direct aid decoupled from the Common Agricultural Policy (CAP).

For its part, its investment goods register contains the following entries as of December 31, 2024, relating to the fixed assets used in the business activity for which the owner has full documentary evidence:

Element	Commencement of operation	Cost price	Accumulated amortization as of 31-12-2024
Warehouse and stable	10-02-2013	36,000 ⁽¹⁾	22,000
Trailer	10-02-2013	3.155	3.155
Fertilizer machine	10-02-2018	7,500	7.200
Irrigation installation	10-02-2020	2,500	1.015
Tractor, accessories and implements	10-02-2020	28,800	9.800

⁽¹⁾The recorded acquisition value (depreciable value) does not include the value of the land.^(Back)

Finally, during the 2025 financial year, it acquired various new farming tools for 1,260 euros, with the unit value of none of them exceeding the amount of 601.01 euros.

Solution:

Previous issue: performed activities.

Activities carried out by Mr. LHI They are all included in the special regime of agriculture, livestock and fishing of the Value Added Tax, so, for the purposes of applying the objective estimation method of the PIT, it is a single activity, whose identification code is 1 (agricultural or livestock susceptible to being included in the special regime of agriculture, livestock and fishing of the VAT).

Phase 1: Determination of prior net performance.

As a preliminary operation, it is necessary to determine the eligible income corresponding to each of the products obtained and services provided in the exercise of the activity, taking into account that, in this specific case, the amount of direct aid decoupled from the Common Agricultural Policy ( CAP ) must be added to the income from the different crops and farms, in proportion to their respective amounts, without including for this purpose the income from other accessory work and services.

Therefore, the following income will be eligible:

Total income from crops and farms: 54,880 (Corn) + 29,835 (Lambs) + 19,040 (p. horticultural) = 103,755 euros.

Computable income from the sale of corn

Recorded income: 54,880

Proportional share of direct aid decoupled from the CAP (54,880 ÷ 103,755 x 6,250) = 3,305.86

Computable income (54,880 + 3,305.86) = 58,185.86

Computable income from the sale of beef sheep

Recorded income: 29.835

Proportional share of direct aid decoupled from the CAP (29,835 ÷ 103,755 x 6,250) = 1,797.20

Computable income (29,835 + 1,797.20) = 31,632.20

Computable income from the sale of horticultural products

Recorded income: 19.040

Proportional share of direct aid decoupled from the CAP (19,040 ÷ 103,755 x 6,250): 1,146.93

Computable income (19,040 + 1,146.93) = 20,186.93

Computable income from other work and accessory services

Recorded and computable income: 4.760

By applying the corresponding net performance indexes to the income from each of the products and services, the prior net performance is determined as follows:

Product code	Type of product/service	Computable income	Performance Index	Product base performance
Previous net performance (sum)				25,889.42
3	Beef sheep	31,632.20	0.09	2,846.90
6	Corn	58,185.86	0.26	15,128.32
6	Horticultural products	20,186.93	0.26	5.248,60
15	Other accessory works and services	4,760.00	0.56	2,665.60

Phase 2: Determination of reduced net income.

Amount of depreciation of fixed assets assigned to the activity .

Using the amortization table contained in the Order HAC/1347/2024, of November 28 (BOE of November 30), and in accordance with the rules for its application established therein, the amount of amortization that can be deducted from the previous net income is determined as follows:

Heritage element	Acquisition value	Maximum coefficient	Amortizable period	Amortization
Total amortizations	11.185
Warehouse and stable	36,000	5%	All year	1,800
Trailer	3.155	Irrelevant ⁽¹⁾		0
Fertilizer machine	7,500	25%	All year	300 ⁽²⁾
Irrigation installation	2,500	25%	All year	625
Tractor and accessories	28,800	25%	All year	7.200
Farming tools	1.260	100% ⁽³⁾	Irrelevant	1.260

Notes to the table:

⁽¹⁾On December 31, 2025, the trailer was already fully amortized, so no amount should be included for this concept in 2025. ^(Back)

⁽²⁾Since the amount resulting from the application of the maximum linear coefficient is greater than the amount pending amortization as of 31-12-2024, which amounts to 300 euros (7,500 – 7,200), the amortization of the fertilizer machine has been carried out for this latter amount. ^(Back)

⁽³⁾They can be freely amortized because their unit value is less than 601.01 euros and because, in addition, the total amount of the new assets acquired in 2025 does not exceed the amount of 3,005.06 euros. ^(Back)

Reduced net income (summary):

Previous net performance: 25,889.42

less: Amortization of tangible and intangible fixed assets: 11.185

equal to: Reduced net return: 14,704.42

Phase 3: Correction indices and determination of net module performance.

Only the correction index for the use of salaried personnel is applicable in this case, the cost of which represents 16% of the total volume of income (18,000 ÷ 114,765 x 100 = 15.68%).

Since the percentage in question is between 10 and 20 percent, the correction index 0.90 should be applied. Therefore:

Net module yield: (14,704.42 x 0.90) = 13,233.98 euros

Phase 4: Determination of the net return of the activity.

General reduction: 5% of 13,233.98 euros = 661.70 euros
Since there are no extraordinary expenses due to exceptional circumstances or right to reduction for young farmers, the net income from the activity is as follows: 13,233.98 – 661.70 = 12,572.28 euros

Phase 5: Determination of the reduced net return of the activity.

Reduction for irregularity

Since no type of income is computed with a generation period of more than two years, nor any obtained in a noticeably irregular manner over time, no reduction is applicable for this concept. Therefore:

Reduced net income from the activity = Net income from the activity (12,572.28 euros)

Determination of the total reduced net income of the activity

Reduction for the exercise of certain economic activities:

This reduction applies only when the net income from the activity is less than or equal to 12,000 euros.

Since the income from economic activities exceeds 12,000 euros (12,572.28 euros), the reduction of article 32.2.3 of the Law does not apply. IRPFABBR.

Therefore:

Net income from the activity = 12,572.28

equal to: Total reduced net return from activity = 12,572.28