Who is assesed under Estimacion Directa Normal?
This form of Spanish tax assesment is applied to all business in Spain whether self employed or company limited unless they have chosen to be assesed under Estimacion Directa Objetiva or Estimacion Directa Simplificada (discussed in another post).
This form of tax assesment will be applied when the total sum of the business activities surpasses 600,000 € for the previous year, or the Estimacion Directa Simplificada has been renounced.
Calculation of net profit
In Spain net profit is calculated by deducting legitimate expenses from total income, allowing for modifications under the rules for Impuesto de Sociedades if applicable.
Total income is made up from sales of goods and/or services, as well as products for own use and any subsidies among others.
Total deductible costs are considered to be those that are essential in the operation of the business activity such as electricity, telephone, wages, repair and maintenance, rent, leasing amongst others.
Accounting Obligations
- Limited Company: Accounting as required by the law of commerce and in compliance with EL Plan General Contable General Accounting plan).
- Self Employed in Spain: Must maintain the following books. Sales and income ledger. Purchase and expenses ledger. Investment ledger.
- Professionals working in Spain: Income ledger. Expenses ledger. Fund provision ledger.
Quaterly Payments
Contributers assesed on Estimacion Directa Normal have to make quaterly payments on account of IRPF (income tax) on the following dates. On the first thre quarters between the 1st and 20th of April, July and October. The last quarter is paid between the 1st and 30th of January of the follwing year.
Each quaterly payment will be calculated using the following formula. 20% of the net profit achieved from the begining of the quarter up to the last date of the quarter being assesed.
Notes
Contributers that have agricultural or forestry income will be assesed differently.
Any quarter that results in no income still needs to be presented as a negative declaration.
This information is for guidance purposes only.
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