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V1115-22 19 May 2022 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · reducción por inicio de actividad

Reduction for starting an economic activity may apply in the second year if requirements are met

A taxpayer transitioning from employment income to conducting their own economic activity has enquired whether they can apply the reduction for starting an economic activity in 2021. The DGT has ruled that this is possible, provided the legal exclusions are not met.

The question raised

Whether the reduction for the commencement of economic activity can be applied in 2021.

The DGT's ruling

The 20 percent reduction of the positive net income applies in the first tax period in which it is positive and in the following one. To this end, no economic activity must have been carried out in the previous year and the income from the activity cannot derive from more than 50 percent of persons or entities from whom labor income was obtained in the year prior to the commencement. In this case, as the income from the previous company is not applicable, the requirements for the 2021 fiscal year are met.

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