Taxpayers under the objective estimation regime shall calculate their limits according to their imputation criterion

The determination of the income and purchase limits required to remain in or access the Personal Income Tax (IRPF) objective estimation regime has raised doubts regarding which amounts should be computed exactly. The Dirección General de Tributos (DGT) has resolved this technical issue by defining the calculation method that the taxpayer must follow.

What the DGT has resolved

The advisory body establishes that, to delimit the scope of application of the objective estimation, gross yields and purchases must be computed following the temporal imputation criterion that the taxpayer themselves applies in their accounting. This implies two possible scenarios:

• Accrual basis: If the taxpayer uses this method, income and expenses accrued in accordance with current accounting regulations will be computed.
• Cash basis: If the taxpayer opts for this method, the amounts that have been effectively received or paid during the corresponding period will be used.

This resolution is based on the application of the IRPF Law, the Corporate Tax Law, and the IRPF Regulations.

What this means for you

If you are a natural person carrying out an economic activity under the objective estimation regime, there is no single calculation model to verify whether you exceed the legal limits. The key lies in consistency with your system for the imputation of income and expenses. If your accounting is based on accrual, the limits are measured by what you have invoiced or what has been invoiced to you, regardless of whether the money has entered your account. Conversely, if you use the cash basis, only actual cash movements will count to determine whether you can remain in this regime.

What you should do

It is necessary to verify which temporal imputation criterion your economic activity applies to avoid errors in calculating income and purchase limits. An error in this determination could lead to an incorrect application of the objective estimation regime, which would entail the obligation to pay taxes under the direct estimation regime. It is recommended to analyze the consistency between accounting records and the amounts declared to ensure compliance with current regulations.