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Practical guide for completing census form 036

Exclusion of the objective estimation method

The determining cause for exclusion from the objective estimation method will be the occurrence of any of the circumstances established in article 32.2 of the Personal Income Tax Regulation (439/2007 of March 30) or having exceeded the limits established in the Ministerial Order that develops it.

The exclusion will take effect from the beginning of the year immediately following the year in which the circumstance occurs.

The incompatibility provided for in article 35 and those regulated in sections 2 and 4 of article 36 of the aforementioned Regulation of IRPF will also be considered causes for exclusion from this method.

The exclusion of the objective estimation method will entail the inclusion during the following three years in the scope of application of the simplified form of the direct estimation method, in the terms provided for in section 1 of article 28 of the aforementioned Regulation of Personal Income Tax .

Example: The consultant had been carrying out the activity of retail trade outside of establishments of other goods, section 663.9 of the IAE , determining the net income of this activity by the objective estimation method.

In 2009, the company registered in the wholesale sales activities of medical and orthopedic devices and instruments, section 619.2 of the IAE and wholesale sales of pharmaceutical products and medicines, section 614.1 of the IAE , activities that are not included in the scope of application of the objective estimation method.

In 2009, the net income of the first activity will be determined by the objective estimation method, while that of the second and third will be determined by the direct estimation method.

At the end of 2009, it will cease activities initiated this year.

The question raised is whether the objective estimation method can be applied to determine the net income of the activity in 2010.

Article 34 of the Personal Income Tax Regulations, approved by Royal Decree 439/2007, of March 30 ( BOE of March 31) regulates the exclusion of the objective estimation method, establishing:

  1. The determining cause for exclusion from the objective estimation method will be the occurrence of any of the circumstances established in article 32.2 of this Regulation or having exceeded the limits established in the ministerial order that develops it.

    The exclusion will take effect from the beginning of the year immediately following the year in which the circumstance occurs.

    1. The incompatibility provided for in Article 35 and those regulated in sections 2 and 4 of Article 36 of this Regulation will also be considered reasons for exclusion from this method.
    2. The exclusion of the objective estimation method will entail the inclusion during the following three years in the scope of application of the simplified form of the direct estimation method, in accordance with the terms set out in section 1 of article 28 of this Regulation.”

    According to this provision, any taxpayer who experiences any of the circumstances of exclusion from the objective estimation method in a tax period, such as incompatibility with direct estimation, will be excluded from it in the immediately following year, so that, having occurred this circumstance in 2009, it will be excluded from the scope of application of the same in 2010, even if the cause of exclusion disappears at the end of 2009.

    On the other hand, this exclusion will have a temporary effect of three years, so it will be excluded from the same in the tax periods 2010, 2011 and 2012.

    In the 2013 tax period, the objective estimation method may be applied again if the circumstances that delimit the scope of application of the method were met in 2012.

    (Binding consultation DGT V2469-09)