Doctrine by topic · DGT Observatory

Reduction for Commencement of Activity: DGT doctrinal evolution

How the DGT's position on this topic has evolved, and the rulings it rests on.

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How the DGT's position has evolved

Settled doctrine High confidence 39 rulings · 2014–2026

Current position

The 20 percent reduction is applied to the positive net income obtained through direct estimation, with a limit of 100,000 euros per year. For its application, no economic activity must have been carried out in the previous year, and income cannot derive from more than 50 percent of persons or entities from which employment income was obtained in the previous year. The right is exercised in the first tax period with positive income and in the following one.

The DGT's position remains constant regarding the requirements of no prior exercise and the source of income. The doctrine has specified the moment the application period begins, linking it to the first period with positive net income. Recently, the quantitative limit of 100,000 euros upon which the reduction is applied has been integrated.

Turning points

  1. V2206-25

    Introduces a quantitative limit for the reduction base, establishing that the amount of net income to which it is applied cannot exceed 100,000 euros per year.

Analysis based on 38 of 39 rulings with a stated position. Updated 23 September 2026.

Rulings on this topic

24
V5350-26 28 Jul 2026

Reduction for start of activity applies only to first economic activity

SG de Impuestos sobre la Renta de las Personas Físicas
reducción por inicio de actividadrendimiento neto positivoestimación directaactividad económicaejercicio de actividad LIRPF — Ley 35/2006 del IRPF art. 32.3
Affects CompanyExpat · Non-residentIndividual
V5293-26 28 Jul 2026

Reduction for start of activity applicable in second year if conditions met

SG de Impuestos sobre la Renta de las Personas Físicas
reducción por inicio de actividadrendimiento netoestimación directaactividad económicaperiodo impositivo LIRPF — Ley 35/2006 del IRPF art. 32.3LGT — Ley 58/2003 General Tributaria art. 89.1
Affects CompanyExpat · Non-residentIndividual
V2206-25 17 Nov 2025

Reduction for start of activity capped at €100,000 net income

SG de Impuestos sobre la Renta de las Personas Físicas
reducción por inicio de actividadestimación directarendimiento netoactividad económicarectificación de autoliquidaciones LIRPF — Ley 35/2006 del IRPF art. 32.3LGT — Ley 58/2003 General Tributaria art. 120.3
Affects CompanyExpat · Non-residentIndividual
V1587-21 26 May 2021

Start-up reduction applies during periods when net income is positive

SG de Impuestos sobre la Renta de las Personas Físicas
reducción por inicio de actividadrendimiento neto positivoestimación directaperiodo impositivoactividad económica LIRPF — Ley 35/2006 del IRPF art. 32.3
Affects CompanyExpat · Non-residentIndividual

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