Obligation to apply the simplified direct estimation method for Personal Income Tax (IRPF)

Determining the net yield of an economic activity is a critical aspect for taxpayers operating under Personal Income Tax (IRPF). Recently, the Directorate General of Taxation (DGT) has clarified the application rules of the simplified direct estimation method for those not included in the objective estimation regimes.

What the DGT has ruled

The ruling establishes that taxpayers performing activities not covered by the objective estimation method are obliged to determine their net yield through the simplified modality of direct estimation. This criterion remains in effect as long as the taxpayer does not expressly manifest their waiver of said modality.

Furthermore, the resolution addresses the situation of new business activities. In these cases, to determine whether the requirements for the simplified modality are met, the turnover limit must be calculated by annualizing the projected figure.

What this means for you

If you are an individual starting an economic activity or performing an activity that does not allow the use of modules (objective estimation), the regulations place you by default under the simplified direct estimation regime. This implies that you must maintain accounting records and a register of income and expenses to calculate your net yield.

It is fundamental to understand that the application of this method is not optional by default; rather, it is the general rule for non-objective activities, unless a formal waiver procedure is carried out before the Administration.

What you should do

Upon starting an economic activity, it is necessary to verify whether the activity is included in the objective estimation list. If it is not, the application of simplified direct estimation must be considered, keeping in mind that turnover limits will be projected on an annual basis to comply with current regulations.

Since the choice of calculation method has direct implications for the tax burden and registration obligations, it is recommended to assess each particular situation to ensure compliance with the General Tax Law and the Personal Income Tax Regulations.