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Systems to determine the income of the economic activity

Which methods you can use, which are incompatible, when you are excluded and which you can renounce

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Normal direct assessment

Applies:

  • Unless you have opted for the simplified modality or the objective assessment (modules).

  • Provided that the net revenues of all your activities exceed €600,000 per year in the immediately preceding year or you were excluded from simplified direct assessment in any of the three previous financial years.

It is calculated as the difference between: eligible income (the total of the full income derived from sales and the provision of services, as well as self-consumption and subsidies, among others) and deductible expenses (those that are duly justified and recorded in the accounts or in the obligatory registers produced in carrying out the activity and are necessary to obtain the income). On the net income thus obtained, the reductions provided for in the regulations may be applied.

Phase 1

(+) Gross income

(-) deductible expenses

(-) Amortization

(=) Net income
Phase 2

(-) Reduction of returns with a generation period of more than two years or obtained in a clearly irregular manner when they are imputed in a single fiscal year (30%). Maximum reduction base: 300,000 euros.

Transitional regime : application of this reduction
to income that was received in installments prior to 1-1-2015.

(=) Reduced net performance
Phase 3

(-) Reduction for economically dependent self-employed workers or
with a single unrelated client:

  • General reduction
  • Additional increase for taxpayers
    with net income from activity less than
    14,450 euros (19,747.50 euros from 1 January 2023) and income other than the above,
    excluding exempt income, less than 6,500
    euros.
  • Additional increase for disability

(-) Reduction for taxpayers with total income of less than 12,000 euros, including income from economic activity (incompatible with the previous reduction)

(-) Reduction due to start of activity

(=) Total reduced net earnings