Incompatibility between direct and objective estimation in Personal Income Tax (IRPF)

The Dirección General de Tributos (DGT) has issued a relevant ruling regarding the transition between taxation regimes in Personal Income Tax (IRPF). The inquiry analyzes the possibility of applying the objective estimation method in a tax year immediately following a period of taxation under the direct estimation regime.

What the DGT has ruled

The resolution establishes that the incompatibility between direct and objective estimation entails an exclusion from the objective method for the three years following the tax year in which said incompatibility occurs. In the specific case analyzed, as the incompatibility begins in the 2025 tax year, it remains in effect during the years 2025, 2026, and 2027.

Consequently, the DGT determines that it is not possible to determine the net income of the new activity using the objective estimation method in the 2026 tax year.

What this means for you

This ruling directly affects individuals carrying out an economic activity who wish to change their method of taxation. If you have opted for direct estimation in a given tax year, you must take into account that this change triggers a restriction period for accessing the objective estimation regime.

Current regulations, set out in Royal Decree 439/2007 (RIRPF), impose this three-year term to ensure consistency in the determination of net income. Therefore, a change of regime in 2025 blocks the possibility of using objective estimation during the following two tax years.

What you should do

Before modifying the taxation method for your economic activity, it is necessary to evaluate the temporal impact this change will have on your tax obligations. It is fundamental to consider that the choice of a regime is neither immediate nor instantly reversible for the following tax year.

It is recommended to analyze the cost and income structure of the activity to determine if direct estimation is the most suitable long-term option, considering the exclusion period that will be activated after the choice is made.