In a consultation from March of this year, the DGT (Spanish Tax Agency) expressed its opinion on the deductibility of the RETA (Special Regime for Self-Employed Workers) flat-rate contribution for the self-employed individual in their Personal Income Tax (IRPF) return when engaging in more than one activity (one as a corporate administrator and another under the direct estimation method).
In its official response issued on March 10, 2023, the Directorate-General for Taxes (DGT) has provided its opinion regarding the deductibility in the Personal Income Tax (IRPF) of Social Security contributions paid by a self-employed worker who receives income for their role as an administrator of a company (remuneration in this capacity) and other income derived from their economic activity under the direct estimation regime.
The Directorate-General is based on Article 46.3 of Royal Decree 84/1996 of January 26, which approves the General Regulation on the registration of companies and the affiliation, enrollment, deregistration, and data changes of workers in the Social Security, as a starting point:
“When self-employed workers simultaneously perform two or more activities that require inclusion in this special regime, their registration in it shall be single. They must communicate all their activities and the corresponding data in the registration application or, if pluriactivity occurs after it, through the corresponding data change, under the terms and with the effects indicated in Articles 28 and 37 of this regulation. Likewise, the same procedure shall be followed in case of changes or termination of their pluriactivity.”
Therefore, considering the need to declare pluriactivity in this regime, in order to determine the impact of the expenses associated with contributions to the Special Regime for Self-Employed Workers (RETA) in the Personal Income Tax (IRPF) of the self-employed worker, it is important to note that these contributions are related to the registration in this regime and the exercise of multiple activities. Consequently, the deduction in the IRPF can be made in the following ways:
- When calculating the net income from work (for the remuneration received as an administrator of the company).
- When determining the net income from the economic activity being carried out under the direct estimation regime.
It is important to emphasize that, in both cases, the taxpayer is obliged to contribute to the RETA, providing them with the flexibility to decide where to apply this single contribution.
Furthermore, it is essential to remember that the consideration of deductible expenses in this income is based on the provisions set out in Articles 19 and 28 of the Personal Income Tax Law (LIRPF), as applicable to income from work and economic activities, respectively.
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