Joint calculation of agricultural, livestock, and forestry activities in Personal Income Tax

The Directorate General of Taxes (DGT) has issued a relevant criterion for taxpayers carrying out activities in the primary sector under the objective estimation regime. The issue focuses on determining whether agricultural, livestock, and forestry activities can be considered similar for the purposes of the limits of said method.

What the DGT has resolved

The binding ruling determines that agricultural, livestock, and forestry activities included in Order HAC/1359/2023 must be considered similar for the objective estimation method. This allows for the joint calculation of the excluding magnitudes, provided that two additional requirements are met:

• That the activities are carried out under common management.
• That there is the use of shared personal or material resources.

This criterion is based on the Personal Income Tax Regulation (RIRPF) and Order HAC/1359/2023.

What it means for you

If you are an individual carrying out activities in the primary sector, this criterion directly impacts the management of your income limits. As these activities are considered similar, the calculation of the magnitudes that limit staying in the objective estimation regime will not be performed in isolation for each one, but jointly if the requirements of common management and shared resources are met.

This implies that the control of income limits to maintain the objective estimation regime must be carried out by integrating the magnitudes of the different mentioned activities, preventing the taxpayer from being able to fragment their income to remain in this method artificially.

What should be done

It is necessary to analyze the operational structure of the agricultural, livestock, or forestry activities being carried out. If there is common management and the use of shared resources, the joint calculation of magnitudes must be applied to verify compliance with the limits established by current regulations. It is recommended to assess each particular situation to ensure that the applied tax treatment is correct according to the reality of the operation.