Professionals starting an incompatible activity will lose the right to the objective estimation method

The regime for estimating yields in Personal Income Tax (IRPF) presents strict compatibility rules that directly affect individuals carrying out multiple economic activities. A recent resolution from the Directorate General of Taxes (DGT) has specified the consequences of starting a professional activity that is incompatible with the objective estimation method.

What the DGT has ruled

The binding ruling establishes that when a taxpayer starts a professional activity that is incompatible with the objective estimation regime, such incompatibility takes effect from the year following the start of the new activity. The operational consequence is that the taxpayer must determine the yield from all their economic activities using the direct estimation method.

This exclusion from the objective method is not immediately transitory; rather, it will be maintained for the three years following the start of the incompatible activity. Likewise, the DGT has clarified the impossibility of combining temporal imputation criteria: if the taxpayer opts for the cash basis (collections and payments), this must be applied uniformly to all their economic activities, without the possibility of applying the accrual basis to one and the cash basis to another.

What this means for you

If you currently carry out activities under the objective estimation regime and decide to undertake a new professional activity that, by its nature, only allows for direct estimation, your tax situation will change comprehensively. You will not be able to maintain the objective estimation method for your previous activities; the totality of your yields must switch to taxation via direct estimation.

This implies a greater administrative burden and a change in how you account for your income and expenses. Furthermore, you must take into account that the choice of temporal imputation criterion will be indivisible for all your economic activities, which prevents the flexibility of managing each business with a different recording method.

What is advisable to do

Before starting a new professional activity, it is necessary to analyze whether it will generate an incompatibility with your current regimes. It is fundamental to evaluate the impact that the mandatory transition to direct estimation will have on the totality of your yields and on the management of your accounting. It is recommended to assess the structure of your activities to avoid unforeseen changes in the determination of your net yields.