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Practical manual for Income Tax 2024. Volume 1

5. Other business insights

Regulations: See common rule 3 of Annex III Order HFP /1359/2023, of December 19 ( BOE of December 21).

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.

Note: Please note that the following direct aid is taxed as current subsidies: ##

  • Direct aid to the road transport sector provided for in articles 34 of Royal Decree-Law 20/2022, of December 27 ( BOE of December 28) and 156 and following of Royal Decree-Law 5/2023, of June 28 ( BOE of June 29).

  • Direct aid granted to holders of economic activities especially affected by the DANA for the destruction or repair of heritage elements included in article 11 of Royal Decree-Law 6/2024 , with the following qualifications. 

    -In the case of public aid intended to compensate for the destruction of assets , the aid received will be fully exempt in accordance with section 1 c) of the Fifth Additional Provision of the Personal Income Tax Law if its amount is greater than the acquisition value of the destroyed asset. But if the amount is lower, the negative difference will be included in the tax base. 

    -When the aid is intended repair damage to assets, only the portion the aid that, where applicable, exceeds the cost of repairing the aforementioned assets will be included in the tax base. In no case will the repair costs, up to the amount of the aforementioned aid, be tax deductible or counted as an improvement.

Unlike the previous benefits, Social Security benefits received for temporary disability, pregnancy risk, or temporary disability, if applicable, are taxed as earned income.

Important: In the event that aid or subsidies are granted by the Autonomous Communities, following the Covid-19 pandemic crisis, with the aim of promoting the maintenance of the economic activity of the self-employed in the face of the effects of the measures adopted to deal with said epidemic, as they do not fit into other concepts of IRPF and their purpose is to compensate for the decrease in income obtained from economic activity, they will be classified as income from economic activities (current subsidies) and must be attributed to the year in which they are granted, unless the criterion of collections and payments has been chosen for the temporary imputation of the income from the activity.