Differences between Normal and Simplified Direct Estimation
The normal and simplified direct estimation are two alternatives to declare personal income tax, this being understood as the Personal Income Tax, which is a tax figure belonging to the Spanish tax system with the characteristics of being a personal, progressive and direct tax that taxes the income obtained in a calendar year by natural persons residing in Spain.
In this sense, in this article we present the differences that exist between the normal direct estimation and the simplified direct estimation in order to contribute to the understanding of our readers in this matter.
Normal Direct Estimate
It can be said that the normal direct estimate is a method in which the taxpayer pays for what is “real”. This is applied to determine the net income of all the economic activities carried out by the taxpayer, based on certain criteria or requirements, among which are mentioned more than 600,000 euros of invoicing per year and the waiver of the simplified modality of the direct estimation method. .
In addition to the above, the normal direct estimate is a system that self-employed entrepreneurs and professionals can take advantage of, which determines the income obtained by the entrepreneur or self-employed professional so that a faithful reflection of reality is obtained. To calculate this, first all the income obtained through the professional activity is calculated, the expenses attributable to said activity are subtracted and the tax base is obtained as a result, from which the IRPF (Income Tax on Individuals) will be taxed. ).
Thus, to opt for the normal direct estimation method, accounting must be kept like the one kept by a company with balance sheets, which includes profit and loss accounts, since the net return is calculated by the difference between the computable income and the deductible expenses. On the other hand, taxpayers must make four quarterly installment payments in the tax document called model 130, on account of the Personal Income Tax.
Simplified Direct Estimation
Basically, the simplified direct estimate is one of the Personal Income Tax regimes for which the income obtained by individuals through business activities to which the Objective Estimate modality does not apply is taxed. and those that do not have an annual volume of operations greater than 600,000 euros and, therefore, have not waived the application of another method of payment of IRPF (Income Tax on Individuals).
Otherwise, the simplified direct estimate may not be applied in the event that the taxpayer carries out another activity to which the Normal Direct Estimate is applicable. Hence, the simplified direct estimation is the one to which most self-employed professionals submit, since it has simpler formal obligations, since it does not require keeping accounting adjusted to the Commercial Code. Finally, the fundamental requirement to adjust to the simplified direct estimate is that no activity carried out by the taxpayer is in the Normal Direct Estimate, since they are not compatible.
Once the pertinent definitions have been presented, the following differences are presented:
| Normal Direct Estimate | Simplified Direct Estimation |
| In the normal direct estimation, the net amount of turnover must exceed €600,000 per year in the previous year. | In the simplified direct estimate, the net amount of turnover must not exceed €600,000 per year in the previous year. |
| To apply it you need to have renounced the use of the simplified modality. | To apply it you must have renounced or be excluded from the normal or objective modality. |