- Order HAC/1347/2024, published on 30 November, keeps the 2025 modules for income tax and the simplified VAT scheme.
- The 5% reduction of net module income is kept, as in previous years.
- Those who prefer direct estimation can opt out until 31 December 2024.
On 30 November 2024 the Official State Gazette published Order HAC/1347/2024 of 28 November, which sets out for 2025 the objective-estimation method for personal income tax, known as «modules», and the special simplified VAT scheme. The order keeps the structure of last year’s and, as a general rule, retains the amounts of the signs, indices and modules, together with their instructions for use.
Objective estimation calculates the income of the activity not from actual receipts and expenses, but from magnitudes such as staff employed, the floor area of the premises or installed power, to which amounts set by Hacienda are applied. It applies to those who meet the conditions unless they opt out of it, and it is limited to certain activities and to those who do not exceed certain thresholds, which is why an order setting its parameters is published each year.
What stays and what changes
The 5% reduction of net module income remains, applicable to all taxpayers using this method. The changes are specific: mussel production on rafts moves from annex II to annex I, and the compensation of the special VAT regime for agriculture, livestock and fishing is removed from the calculation of the income-volume limit for agricultural, forestry and livestock activities.
In VAT, the modules of the simplified scheme are kept, but the accrued-tax index for olive oils is revised: from 1 January 2025 olive oil is permanently taxed at the reduced rate of 4%, and the order separates that activity from the processing of natural products. It also adjusts the 2024 modules to the temporary reduced rates applied to basic foods.
Opting out before 31 December
Those taxed under modules who prefer to switch to direct estimation in 2025 can opt out from the day after the order is published until 31 December 2024. The opt-out from the income tax method and from the simplified VAT scheme is made separately. It is also deemed made if the instalment payment for the first quarter of 2025 is filed on time under direct estimation, or the VAT return under the general regime.
Opting out has significant consequences: the direct-estimation method requires keeping books and calculating real profit, and the opt-out generally affects a minimum period, since returning to modules is not immediate. That is why it is usually a decision made with numbers: what results from applying modules against real profit, especially if there are losses, heavy investments or a change in the business.
What to do
Before the end of the year, compare with your adviser what each method means for you in 2025, with your forecasts of income, expenses and staff. Also check whether you will exceed any of the excluding limits of the method, which are measured by income volume and by purchases, since exceeding them forces you out of modules and into direct estimation.
If you work mostly with business customers, also check the limit on billing to that type of customer, which likewise excludes you from the method; and if you expect significant investments, direct estimation may turn out more favourable. And for activities affected by the DANA storm of late October, remember that an additional 25% reduction was applied to net income and to 2024 instalments in the affected municipalities. The decision is individual; consult your adviser. It is also worth keeping a copy of the opt-out filing or the form submitted, as it is the proof that the option was exercised on time.
Modules simplify the calculation, but not always the result.
This article is general information. It is not legal, tax or investment advice, and it does not take anyone’s particular circumstances into account.
