Simplified [Model 036]

The simplified regime is a regime of automatic application, unless waived .

Inclusion

This regime will apply (box 550 “ Including ”) to individuals and entities under the income attribution regime in the Personal Income Tax that meet the following requirements :

1. That they are natural persons or entities subject to the income attribution regime in the Personal Income Tax, provided that, in the latter case, all of their partners, heirs, commoners or participants are natural persons.
2. That they carry out any of the economic activities included in the Ministerial Order that regulates this regime, provided that, in relation to such activities, they do not exceed the limits determined for them.

The application of the simplified special regime to entities in the allocation of income in the Personal Income Tax will be carried out regardless of the individual circumstances of the persons comprising them.

The simplified regime will be applied to each of the activities included in the objective estimation method (box 604 or 606) of the Personal Income Tax, except those to which any other of the special regimes regulated in the Value Added Tax Law would be applicable.

Example: the objective estimation method of IRPF and the special simplified regime of VATare applicable to the retail trade activity of bread, pastries, confectionery and similar and milk and dairy products, classified under section 644.1 of IAE .

For the purposes of applying the simplified regime, each of those specifically included in the Ministerial Order regulating this regime will be considered independent activities.

The determination of the economic operations included in each of the activities must be carried out in accordance with the regulations governing the Tax on Economic Activities, to the extent that they are applicable.

Exclusion

According to Law 37/1992, the following will be excluded from the simplified regime (box 554 “excluded”):

1. Businessmen or professionals who carry out other economic activities not included in the simplified regime, unless such activities are covered by the special regimes for agriculture, livestock and fishing or the equivalence surcharge. However, the performance by the entrepreneur or professional of other activities that are determined by regulation will not entail exclusion from the simplified regime.
2. Those entrepreneurs or professionals in whom any of the following circumstances occur, in the terms established by regulation:

   That the volume of income in the immediately preceding year exceeds any of the amounts provided for by regulation:

   • For all business or professional activities, except agricultural, forestry and livestock activities

   • For all agricultural, forestry and livestock activities determined by the Minister of Finance and Public Administration.

   When an activity was started in the immediately preceding year, the volume of income will be increased to the year.

   For the purposes of the provisions of this section, the volume of income will include all of the income obtained from all of the activities mentioned above, not including current or capital subsidies or compensation, as well as the Value Added Tax levied on the operation.

3. Those businessmen or professionals whose purchases and imports of goods and services for the purposes of their business or professional activities, excluding those relating to fixed assets, have exceeded the amount stipulated by regulation in the previous year, excluding Value Added Tax.

   When an activity has been started in the immediately preceding year, the amount of the aforementioned acquisitions and imports will be increased to the year.

4. Business owners or professionals who waive or have been excluded from the application of the objective assessment regime of the Personal Income Tax for any of their activities.

Renunciation

The waiver (box 558) must be made at the time of submitting the declaration of commencement of the activity or, where appropriate, during the month of December prior to the start of the calendar year in which it must take effect. The resignation submitted on the occasion of the start of the activity to which the simplified regime is applicable will take effect from the moment the activity is started.

The waiver will also be deemed to have been made when the self-assessment corresponding to the first quarter of the calendar year in which it must take effect by applying the general regime is submitted on time. Likewise, in the event of the start of the activity, the waiver will be deemed to have been made when the first declaration-settlement that the taxpayer must submit after the start of the activity is submitted on time, applying the general regime.

When the taxpayer has been carrying out an activity covered by the simplified regime or by the agriculture, livestock and fishing regime, and begins during the year another activity that may be covered by one of these regimes, the renunciation of the special regime corresponding to this last activity will not have any effect for that year with respect to the activity that was previously carried out.

The waiver will be effective for a minimum period of three years and will be deemed to be extended for each of the following years in which the respective special regime may be applicable, unless it is expressly revoked (box 562) in the month of December prior to the start of the calendar year in which it must take effect.

If in the year immediately preceding the year in which the renunciation of the simplified regime or the agriculture, livestock and fishing regime should take effect, the limit determining its scope of application is exceeded, said renunciation will be deemed not to have been made.

Waiving the objective estimation method of Personal Income Tax will entail waiving the special simplified regimes (box 558) and agriculture, livestock and fishing (box 542) in Value Added Tax for all business and professional activities carried out by the taxpayer.

The waiver of the simplified special regime by entities under the attribution regime must be formulated by all partners, heirs, co-owners or participants. To this end, the entity will submit a census declaration, completing, among others, box 823 on page 8.