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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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Simplified direct assessment

You can apply this method when:

  • Do not determine the performance of any of your activities by objective estimation.

  • Do not determine the performance of any of your activities using normal direct estimation.

  • In the previous year, the net turnover of all your activities did not exceed €600,000. If the immediately preceding year is the year in which you started the activity, the net amount of the turnover will be increased to the year.

  • You have not waived your application.

The reduced net return is calculated as in the normal mode by the difference between: the computable income (all the gross income derived from sales and the provision of services, as well as self-consumption and subsidies, among others), the deductible expenses (those that are duly justified and recorded in the accounting or in the mandatory registration books and occur in the exercise of the activity and are necessary to obtain the income) and the reductions that are applicable, with the following particularities:

  • Tangible fixed assets are depreciated on a straight-line basis and according to a simplified table specific to this type.

  • The amount of deductible provisions and expenses that are difficult to justify is 5% (7% for 2023) of the positive net income, excluding these concepts, with a limit of €2,000. If you apply this deduction, you will not be able to apply the reduction for economically dependent self-employed workers or those with a single unrelated client.

Phase 1

(+) Gross income

(-) Deductible expenses (except provisions and amortizations)

(-) Amortizations simplified table

(-) Difference

(+) Expenses that are difficult to justify: 5% (7% for 2023) s/positive difference (Maximum 2,000 euros) *

Note (*): It is incompatible with the reduction for economically self-employed workers
dependent or with a single unrelated client

(=) 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 those with a single unrelated client *

Note (*): It is incompatible with expenses that are difficult to justify

  • 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