Returning to the objective estimation method after the exclusion period

The choice of method for determining net income in Personal Income Tax (IRPF) is a key decision for taxpayers carrying out economic activities. Recently, the Directorate General of Taxes (DGT) has clarified the procedure for those who, after being excluded from the objective estimation method, wish to return to this regime.

What the DGT has resolved

The inquiry focused on determining whether a taxpayer could once again apply the objective estimation method in the 2025 tax year. The DGT has resolved that exclusion from this method entails the obligation to apply the simplified direct estimation modality during the three years following the cause that prompted said exclusion.

However, the ruling establishes that, once that full three-year period has elapsed, the taxpayer regains the ability to determine their net income through the objective estimation method. To do this, it is essential that all the requirements delimiting the scope of application of said regime are met once again.

What it means for you

If you carry out an economic activity and have had to switch to the direct estimation regime due to a previous exclusion, you should keep in mind that this change is not permanent. The regulations impose a mandatory three-year grace period during which direct estimation is the only valid option.

This information is relevant for the tax planning of individuals, as it allows for predicting the exact moment when the option for objective estimation can be recovered, provided that the activity and turnover parameters allow it.

What you should do

It is necessary to strictly monitor the dates on which the cause of exclusion occurred to accurately calculate the end of the three-year period. Before making the change in the corresponding tax return, it must be verified that the activity still meets the requirements demanded by the Personal Income Tax Regulations (RIRPF) and the General Tax Law.

Given that every tax situation is unique, it is recommended to assess your specific case to ensure that the return to the objective method strictly complies with current regulations.