The self-employed have two ways of calculating the personal income tax that they will have to pay to the Treasury each quarter: the direct estimation system and the objective estimation system. However, not all self-employed workers have the decision-making power to choose one system or the other, but some can contribute to either of the two .
Direct estimation system
The direct estimation system is the personal income tax regime to which the vast majority of the group belongs. However, being part of it depends on the volume of turnover and the type of activity that is developed, so not just any worker can be included in it.
This regime has two aspects that are differentiated by the result of the calculation of the returns of its economic activities: normal or simplified.
Direct normal estimation
This system includes those professionals whose turnover exceeds 600,000 euros per year. However, you can also join it voluntarily, even if the result is lower.
Simplified direct estimation
To this regime belong all those self-employed whose annual turnover is less than 600,000 euros. Those whose activity is not part of the objective estimation regime or is not part of the normal direct estimation regime can also take part.
Objective estimation system
The module system, or objective estimation, differs from the other two regimes in that taxes are not measured based on the profit collected . Instead, they are paid according to the parameters established by the Administration: the modules.
This is because it is very common for certain freelancers to charge their customers in cash, such as bars, restaurants, butchers and fishmongers, among other similar small businesses.
When can I change the tax system as a self-employed person?
Not all freelancers can, it is necessary that certain requirements are met. However, those who can change the option from direct estimation to objective estimation or from objective to direct estimation must do so in the month of December ; for the change to take effect at the beginning of the following year.
Although this change can also be carried out in the first quarter of the year, presenting the personal income tax payment model that corresponds to the chosen estimate.
In order to carry out this change, the requirements are as follows:
– Carry out an activity that is included in the Order that develops the Objective Estimation Regime.
– Do not exceed the established billing limits for each activity.
– The sales volume of the previous year cannot exceed 250,000 euros .
– Invoices cannot exceed 125,000 euros per year.
– The volume of purchases must not exceed 250,000 euros .
– Not having renounced or be excluded from the simplified Canarian VAT or IGIC regime, or the special special regimes for Agriculture, Fishing or Livestock.
– Do not carry out other activities that pay in Direct Normal or Simplified Estimation.
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