Objective estimation for agricultural, livestock and forestry activities (II)
How to calculate net income under the module method for farmers, livestock breeders and forestry operators — requirements, exclusions, performance indices and correction indices for 2025.
The objective estimation method — commonly known as "modules" — allows the net income of agricultural, livestock and forestry activities to be calculated without maintaining full accounting records. The calculation starts from actual income and applies indices and correction factors set annually by the Tax Agency.
🔵 Legislation: Arts. 16.2 b), 31 and DT 32ª Personal Income Tax Law; Art. 32 et seq. Personal Income Tax Regulations; Order HAC/1347/2024 of 28 November (Official State Gazette of 30 November)
Who may apply this method?
Holders of agricultural, livestock or forestry activities may use objective estimation in 2025 if they meet all of the following conditions:
- The activity is included in the list of Order HAC/1347/2024
- They have not waived the method (either expressly or tacitly)
- They do not incur any exclusion ground
Entities under the income attribution regime
Civil partnerships, civil companies and dormant estates carrying on these activities apply objective estimation irrespective of the individual circumstances of their partners. The waiver must be unanimous, but revocation may be made by any partner individually.
Waiver of the method
Express waiver
Submitted using Form 036 during December of the year before the waiver is to take effect (for 2025, in December 2024).
Tacit waiver
A tacit waiver is deemed to have been made when the first quarterly instalment payment for the year (by 20 April) is submitted in accordance with the direct estimation method.
Consequences of the waiver
- The taxpayer is obliged to use direct estimation for a minimum of three years
- After that period, the waiver is automatically renewed unless revoked in December
DANA 2024: Taxpayers who waived in 2024 due to DANA damage may return to the objective estimation method in 2025 without meeting the minimum three-year period, by revoking the waiver in December 2024 or through the first 2025 instalment payment. → Full guide: DANA aid and its taxation.
Exclusion grounds
Quantitative limits (2025)
Royal Decree-Law 16/2025 extended the limits already in force since 2016 to the 2025 and 2026 tax years.
| Ground | Limit |
|---|---|
| Volume of income from all agricultural, livestock and forestry activities in 2024 | > €250,000 |
| Volume of purchases of goods and services in 2024 (excluding fixed assets) | > €250,000 |
Volume of income from all agricultural, livestock and forestry activities in 2024
Limit > €250,000
Volume of purchases of goods and services in 2024 (excluding fixed assets)
Limit > €250,000
To calculate these limits, the taxpayer's transactions and those of their spouse, ascendants, descendants and related entities are added together when they carry on identical or similar activities (same IAE group) with shared management.
2025 update: The VAT special agricultural, livestock and fishing regime compensation no longer counts as income for the purpose of the €250,000 limit from 1 January 2025.
Other exclusion grounds
- Carrying on the activity totally or partially outside Spain
- Determining income from any economic activity under direct estimation
- Being excluded from the simplified VAT or IGIC regime
Exclusion takes effect in the following year in which it occurs, and means three mandatory years in simplified direct estimation.
Activities included in objective estimation in 2025
| Code | Activity |
|---|---|
| 1 | Agricultural or livestock activity included in the VAT special agricultural, livestock and fishing regime |
| 2 | Forestry activity included in the VAT special agricultural, livestock and fishing regime |
| 3 | Independent livestock activity (Division 0 of the IAE) |
| 4 | Livestock rearing, custody and fattening services |
| 5 | Ancillary work and services of farmers and livestock breeders excluded from the VAT special regime |
| 6 | Ancillary work and services of forestry operators excluded from the VAT special regime |
| 7 | Rights of the lessor in sharecropping agricultural activities |
| 8 | Rights of the lessor in sharecropping forestry activities |
| 9 | Processing, preparation or manufacture of natural products requiring registration in an industrial IAE code |
| 10 | Mussel production on raft (maximum 5 rafts on any day of the year) |
1
Activity Agricultural or livestock activity included in the VAT special agricultural, livestock and fishing regime
2
Activity Forestry activity included in the VAT special agricultural, livestock and fishing regime
3
Activity Independent livestock activity (Division 0 of the IAE)
4
Activity Livestock rearing, custody and fattening services
5
Activity Ancillary work and services of farmers and livestock breeders excluded from the VAT special regime
6
Activity Ancillary work and services of forestry operators excluded from the VAT special regime
7
Activity Rights of the lessor in sharecropping agricultural activities
8
Activity Rights of the lessor in sharecropping forestry activities
9
Activity Processing, preparation or manufacture of natural products requiring registration in an industrial IAE code
10
Activity Mussel production on raft (maximum 5 rafts on any day of the year)
Each of these activities is treated as independent — net income is calculated separately for each one.
2025 update: The mussel production on raft activity moves from Annex II to Annex I, with the general exclusion limit of €250,000 of income applying.
How net income is calculated: phase-by-phase scheme
The calculation follows five successive phases:
PHASE 1: Gross income × Net income index = PREVIOUS NET INCOME
PHASE 2: Previous net income − Depreciation (excluding forestry) = REDUCED NET INCOME
PHASE 3: Reduced net income × Correction indices = MODULE NET INCOME
PHASE 4: Module net income − Reductions (5%, young farmers, extraordinary expenses) = ACTIVITY NET INCOME
PHASE 5: Activity net income − 30% irregularity reduction = REDUCED NET INCOME
Phase 1: Net income indices by product type
Gross income includes sales, own use, subsidies, insurance compensation for products and CAP aids (with special rules). Each type of income has its own index applied to it:
| Code | Products or services | Index (natural products) |
|---|---|---|
| 3 | Beef cattle, sheep for meat, goats for meat, poultry, rabbits | 0.09 |
| 5 | Dairy cattle | 0.20 |
| 6 | Cereals, citrus fruit, dried fruits, vegetables, potato, pulses, table grapes without DO, olive, mushrooms, tobacco | 0.26 |
| 7 | Breeding pigs, breeding cattle, dairy sheep, dairy goats, beekeeping | — |
| 9 | Table grapes, wine grapes with DO, oilseeds, rice, flowers and ornamental plants | 0.32 |
| 10 | Other livestock species | 0.37 |
| 12 | Roots (except sugar beet), tubers, fodder, cotton, non-citrus fruit, others | 0.26 |
| 14 | Ancillary activities of farmers, livestock breeders or forestry operators | 0.42 |
| 15 | Other ancillary work and services and mussel production on raft | 0.56 |
| 16 | Livestock rearing, custody and fattening services | 0.37 |
3
Products or services Beef cattle, sheep for meat, goats for meat, poultry, rabbits
Index (natural products) 0.09
5
Products or services Dairy cattle
Index (natural products) 0.20
6
Products or services Cereals, citrus fruit, dried fruits, vegetables, potato, pulses, table grapes without DO, olive, mushrooms, tobacco
Index (natural products) 0.26
7
Products or services Breeding pigs, breeding cattle, dairy sheep, dairy goats, beekeeping
Index (natural products) —
9
Products or services Table grapes, wine grapes with DO, oilseeds, rice, flowers and ornamental plants
Index (natural products) 0.32
10
Products or services Other livestock species
Index (natural products) 0.37
12
Products or services Roots (except sugar beet), tubers, fodder, cotton, non-citrus fruit, others
Index (natural products) 0.26
14
Products or services Ancillary activities of farmers, livestock breeders or forestry operators
Index (natural products) 0.42
15
Products or services Other ancillary work and services and mussel production on raft
Index (natural products) 0.56
16
Products or services Livestock rearing, custody and fattening services
Index (natural products) 0.37
For forestry activity, the index varies according to the average felling period (0.20 if over 30 years; higher if shorter).
Decoupled CAP direct aids
If income from agricultural and livestock activities other than the direct aid is less than 25% of total income from those activities, the index applied to decoupled direct aids is 0.56.
Reduction of the index for exceptional circumstances
If the activity has been affected by fires, floods, subsidence or other disasters, the taxpayer may request a reduction of the index at the Tax Agency Delegation within 30 days of the event, providing supporting documentation.
Phase 2: Depreciation of fixed assets
Actual depreciation of assigned fixed assets is deducted (except for forestry activities, where no depreciation is applied).
| Asset | Maximum coefficient | Maximum period |
|---|---|---|
| Buildings and structures | 5% | 40 years |
| Machinery and tractors | Variable | — |
| Tools and implements | 25% | 8 years |
| Cattle, pigs, sheep, goats | 22% | 8 years |
| Horses and non-citrus fruit trees | 10% | 17 years |
| Irrigation systems | 10% | 20 years |
| Intangible assets | 15% | 10 years |
Buildings and structures
Maximum coefficient 5%
Maximum period 40 years
Machinery and tractors
Maximum coefficient Variable
Maximum period —
Tools and implements
Maximum coefficient 25%
Maximum period 8 years
Cattle, pigs, sheep, goats
Maximum coefficient 22%
Maximum period 8 years
Horses and non-citrus fruit trees
Maximum coefficient 10%
Maximum period 17 years
Irrigation systems
Maximum coefficient 10%
Maximum period 20 years
Intangible assets
Maximum coefficient 15%
Maximum period 10 years
Tools with a unit value below €601.01 may be freely depreciated in the year of acquisition.
Update from 2024: Free depreciation may be applied to electric vehicles and charging infrastructure assigned to the activity (Fifty-ninth Additional Provision Personal Income Tax Law).
Phase 3: Correction indices
The following reducing indices are applied to the reduced net income where applicable:
| Index | Condition | Correction factor |
|---|---|---|
| 1 — Hired means of production | Agricultural activities using exclusively hired means (excluding land) | 0.75 |
| 2 — Salaried staff (10–20% of income) | Staff cost > 10% of income | 0.90 |
| 2 — Salaried staff (20–30%) | — | 0.85 |
| 2 — Salaried staff (30–40%) | — | 0.80 |
| 2 — Salaried staff (> 40%) | — | 0.75 |
| 3 — Crops on rented land | Part of crop income from rented land | 0.90 |
| 4 — Feed purchased from third parties | Purchased feed > 50% of total consumed | Variable (2025) |
| 5 — Organic farming | Certified production under Regulation (EC) 834/2007 | 0.95 |
| 6 — Irrigated crops (electric) | Crops on irrigated land using electricity, taxpayer registered in territorial register | 0.75 |
| 7 — Small business | Reduced net income from all agricultural and livestock activities ≤ €9,447.91 | 0.90 |
| 8 — Forestry with approved technical plan | Land managed under plans approved by the forestry authority | 0.80 |
| 9 — Mussel production on raft | 3 or 4 rafts | 0.90 |
| 9 — Mussel production on raft | 5 rafts | 0.85 |
1 — Hired means of production
Condition Agricultural activities using exclusively hired means (excluding land)
Correction factor 0.75
2 — Salaried staff (10–20% of income)
Condition Staff cost > 10% of income
Correction factor 0.90
2 — Salaried staff (20–30%)
Condition —
Correction factor 0.85
2 — Salaried staff (30–40%)
Condition —
Correction factor 0.80
2 — Salaried staff (> 40%)
Condition —
Correction factor 0.75
3 — Crops on rented land
Condition Part of crop income from rented land
Correction factor 0.90
4 — Feed purchased from third parties
Condition Purchased feed > 50% of total consumed
Correction factor Variable (2025)
5 — Organic farming
Condition Certified production under Regulation (EC) 834/2007
Correction factor 0.95
6 — Irrigated crops (electric)
Condition Crops on irrigated land using electricity, taxpayer registered in territorial register
Correction factor 0.75
7 — Small business
Condition Reduced net income from all agricultural and livestock activities ≤ €9,447.91
Correction factor 0.90
8 — Forestry with approved technical plan
Condition Land managed under plans approved by the forestry authority
Correction factor 0.80
9 — Mussel production on raft
Condition 3 or 4 rafts
Correction factor 0.90
9 — Mussel production on raft
Condition 5 rafts
Correction factor 0.85
Indices 1 and 2 are mutually incompatible. Index 7 is incompatible with the young farmer reduction.
Phase 4: Reductions on module net income
General reduction: 5%
For 2025 the 5% reduction on module net income from all agricultural, livestock and forestry activities (including processing) is maintained.
Young farmer reduction: 25%
Farmers aged over 18 and under 40, or agricultural employees, may reduce module net income by 25% during the first five years from their first establishment as holders of a priority farm, provided they demonstrate an improvement plan.
Extraordinary expenses for exceptional circumstances
If the activity was affected by fires, floods, subsidence or other exceptional circumstances generating expenses outside normal operations, these may be deducted directly from module net income. The Tax Agency must be notified within 30 days of the event.
Subsidy repayments
If current subsidies received in previous years are returned during the year, the repayment reduces the activity's net income in that year.
Phase 5: Reduction for irregular income (30%)
The 30% reduction applies to the activity's net income when:
- The generation period is more than two years and is attributed in a single tax year, or
- Income is obtained in a notably irregular manner: capital subsidies for non-depreciable fixed assets, compensation for cessation of activity, compensation for indefinite-duration economic rights
Limit: The maximum base to which the 30% applies is €300,000 per year.
Additional reduction for low incomes
Once the total reduced net income has been determined, taxpayers with total non-exempt income below €12,000 may apply an additional reduction under Art. 32.2.3º Personal Income Tax Law. The conditions, amount and limit are set out in the chapter on direct estimation economic activities.
Formal obligations
Taxpayers using objective estimation for agricultural, livestock and forestry activities must maintain:
- Sales or income register
- Investment assets register (to apply the depreciation in Phase 2)
They are not required to maintain a purchases or expenses register.