New limits for taxation by modules
Types of professionals and companies that may be affected by the reduction of this limit
The 2015 tax reform significantly reduced the limits that allowed taxation by modules . However, due to the type of companies affected, especially SMEs and self-employed workers, a two-year grace period was granted to adapt and apply the new limit. The new scales would come into force in 2018. However, pressure from self-employed associations and business groups led to the moratorium being extended for another year.
But there will be no more leeway. At least that is what the Tax Agency announced . The module system will reduce its limit to 150,000 euros in 2019. In addition, other conditions are also reduced, such as not having invoiced more than 75,000 euros in the previous year to other companies, or not carrying out other activities in direct estimation. And this is a problem for many groups.
Who benefits from the module system?
The module system is widely used by small businesses and self-employed people who have a more or less stable income and prefer to simplify their taxation, since it involves paying the same amount every month regardless of how much they have invoiced.
To be eligible for this, the requirements of Order HFP/1823/2016 must be met . In general, we can say that small businesses in the trade sector, bars or taxi drivers , to give some examples, benefit from this regime .
The fact that they always have to enter the night clubs and bars email list same amount, regardless of the amount invoiced, by applying the coefficients that the Treasury imposes on each activity , such as the number of workers hired, the square meters of the premises or the installed electrical power, greatly simplifies the management of their taxes for these companies , saving costs and time.
The reduction in limits excludes all those with higher incomes, although expenses are not taken into account. For example, in sectors such as transport , where a lot of money can be earned, but the associated expenses, such as petrol, vehicle maintenance, etc., are also very high.
New module system limits in 2019
From 1 January 2019, in order to remain in the module system, the following criteria must be taken into account:
Whether they are individuals or entities subject to income attribution regime in the Personal Income Tax .
That their activities are included in the Order of the Ministry of Finance that regulates it and the established limits are not exceeded.
The volume of income in 2018 cannot exceed 150,000 euros for all economic activities, except for agricultural and livestock activities, which will remain at 250,000 euros.
The volume of purchases and imports of goods and services in 2018, excluding purchases of fixed assets, cannot exceed 150,000 euros, not including VAT .
