Estimación directa: you are taxed on what you actually earn
It is almost everybody's default regime. It has two forms, and the difference between them is worth two thousand euros of expenses a year.
The IRPF regime in which the income from the activity is worked out by deducting real deductible expenses from real income.
Article 16 of the Personal Income Tax Act establishes estimación directa as the general method, and the regulations split it into two forms.
Directa simplificada
It applies when the net turnover of all your activities in the previous year does not exceed €600,000 and you have not opted out of it. It has two advantages:
- An extra deduction for provisions and hard-to-substantiate expenses: 5% of preliminary net income, capped at €2,000 a year.
- A simplified depreciation table, shorter than the general one.
Directa normal
It applies above that threshold or where you opt out. It has no 5% for hard-to-substantiate expenses, it uses the general Corporation Tax tables and, if the activity is a commercial one, it requires accounts kept under the Código de Comercio and not just record books.
An example with numbers
An autónomo on directa simplificada with €48,000 of income and €14,000 of deductible expenses in the year:
- Preliminary net income: 48,000 − 14,000 = €34,000
- Hard-to-substantiate expenses: 5% of 34,000 = €1,700, below the €2,000 cap
- Net income: €32,300
On €45,000 of preliminary income, 5% would be €2,250 and only €2,000 would be deducted: the cap is an absolute annual cap.
The mistake that comes up most
Applying the 5% quarter by quarter without watching the annual cap. On the instalment payment the calculation is cumulative, so anyone deducting the full 5% each quarter ends up going over the €2,000 and underpaying until the annual return comes round.
Where this carries on in Cairos: Form 130, step by step.
Terms that go with this one
Almost no tax concept makes sense on its own. These three are the ones that most often turn up beside it.
Estimación objetiva
The IRPF regime in which income is worked out by applying signs, indices or módulos — staff, floor area, power rating, tables — instead of the real profit.
IRPF and withholdingsNet income
What is left after deducting the tax-deductible expenses from the gross income of the activity, before applying any reductions.
IRPF and withholdingsInstalment payment
The payment on account made during the year of a tax that is settled at the year-end.
This, handled without thinking about it
Cairos keeps the invoices, the record books and Hacienda's forms from the same data, so the theory on this page turns into boxes that are already filled in.
No card and no minimum term.