Businesses subject to Estimacion Directa Por Modulos in Spain
Estimacion Directa por Modulos is a method whereby Hacienda estimate your profits subject to certain criteria.
The profits estimated have nothing to do with the real profit. For example 2 bars with 100m2, with the same bar length, and same number of tables pay Hacienda the same amount of tax, even though one bar is empty and the other is always full of people.
Hacienda offers this tax method so that smaller businesses don't have worry about accounting, or working out their taxes, in exchange this businesses pay a higher rate of tax.
Under modulos you will normally pay more in taxes than you would otherwise. There is however another side. If according to your modulo you earn 150,000€ but in reality earn 1,000,000€ you only pay for the 150,000€ estimated by Hacienda, the rest is yours.
Be aware however that not every type of business can declare under Estimacion Directa por Modulos.
This article is for information purposes only
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