Phase 4: Determination of the net performance of the activity
The determination of the net income of the activity is the result of reducing the net income of modules by the amount of the general reduction (if applicable, by the amount of the specific reduction for economic activities carried out in the municipality of Lorca) and by the extraordinary expenses due to exceptional circumstances. The balance resulting from this operation must be increased by the amount corresponding to other business income.
General reduction: 5 per 100
The first Additional Provision of Order HAC/1264/2018, of November 27, by which the objective estimation method of the Personal Income Tax and the simplified special regime of the Value Added Tax are developed for the year 2019 ( BOE of 30), has established a reduction in the net income of modules of 5 percent applicable on a general basis in the year 2019 to all taxpayers who determine the net income of their activity by the objective estimation method.
Reduction for economic activities carried out in the municipality of Lorca: 20 percent general
Once the previous reduction has been applied and only for those taxpayers who carry out their economic activity in the municipality of Lorca and determine the net income of said activity by the objective estimation method, the net income of modules for 2019 corresponding to such activities may be reduced by 20 percent . The reduction must be recorded in box [1476] of the declaration.
See the fourth Additional Provision of Order HAC/1264/2019, of November 27 ( BOE of 30), which establishes the 20 percent reduction in 2019 of the net yield calculated by the objective estimation method of Personal Income Tax and the fee accrued for current operations of the special simplified regime of VAT for economic activities carried out in the term municipal of Lorca.
Extraordinary expenses due to exceptional circumstances
Regulations: Art. 37.4.3 Regulation Personal Income Tax . See also Annex III of Order HAC/1264/2018, of November 27 ( BOE of the 30th).
When the development of the activity has been affected by fires, floods, subsidence or other exceptional circumstances, which have determined extraordinary expenses outside the normal process of carrying out the activity, the interested parties may reduce the resulting net income by the amount of said expenses.
To do so, taxpayers must inform the Administration or Delegation of the State Tax Administration Agency corresponding to their tax domicile of this circumstance within 30 days from the date on which it occurs, providing, for this purpose, the corresponding justification and mentioning, where appropriate, the compensation to be received due to such alterations. The tax authorities will verify the certainty of the cause that motivates the reduction in income and its amount.
Other business insights
The net return on modules must be increased by the amount corresponding to other business receipts such as current and capital subsidies.
The criteria for temporary allocation of current and capital grants are discussed in Chapter of this Manual.