Skip to main content
Practical manual for Income Tax 2020.

Scope of application of the simplified modality

Regulations: Art. 28 Regulation Income Tax

Requirements

The simplified form of the direct estimation method is voluntary , so the taxpayer may waive its application . In the absence of a waiver, this modality must be applied in the 2020 fiscal year to determine the net income of all economic activities carried out by the taxpayer, provided that:

a. Do not determine the net income of all your activities by the objective estimation method .

For these purposes, it should be noted that the economic activities eligible for the objective estimation method and the requirements for their inclusion can be consulted in Chapters and .

b. The net amount of the turnover of the previous year , corresponding to all the activities carried out by the taxpayer, does not exceed 600,000 euros per year .

When the activity had been started in the immediately preceding year, the net amount of the turnover will be raised to the year, for these purposes only.

When no activity was carried out in the immediately preceding year, the income will be determined by this modality, unless it is waived under the terms discussed below.

c. No activity carried out by the taxpayer is in the normal mode of the direct estimation method.

Note: with the exception of activities included in the objective estimation method, in first year of carrying out the activity, the net income will be determined by this method, unless it expressly waived, regardless of the net amount of the resulting turnover at the end of the year.

Determination of the net amount of sales revenue

According to the regulations, the net amount of the turnover is made up of the difference between the following positive and negative items:

• Positive games

  • The amount from the sale of products and the provision of services or other income derived from the ordinary activity of the company, understood as the activity that the company carries out regularly and from which it obtains its periodic income.
  • The purchase price or production cost of goods or services delivered in exchange for non-monetary assets or as consideration for services that represent expenses for the company.

  • The amount of subsidies granted to the company individually based on and forming part of the price of the product units sold or the level of services provided.

    The amount of the remaining subsidies should not be included for these purposes.

•Negative items

  • Sales returns.
  • "Rebates" on sales or services, as well as commercial discounts applied to computed income.
  • VAT and other taxes directly related to the turnover that must be passed on, if they have been computed within the amount of sales or the provision of services and must be subject to repercussion.

See article 35.2 of the Commercial Code; the Standard for the preparation of annual accounts 11 of the General Accounting Plan, approved by Royal Decree 1514/2007, of November 16 ( BOE of the 20th), as well as the Resolution, of May 16, 1991 (BOE of January 18, 1992), of the Institute of Accounting and Auditing of Accounts (ICAC).