Objective and module estimation
The objective estimation and by modules are two forms of taxation in the tax field in Spain.
The objective estimation is a simplified method of taxation used to calculate the income tax (IRPF) and business tax (IAE) of certain companies or professionals. Instead of calculating actual income and expenses, a system of modules is applied that establishes a relationship between the income and expenses of the economic activity. This ratio is based on factors such as the type of economic activity, the surface area of the premises or the number of employees. The objective estimation is applied to those taxpayers whose volume of operations does not exceed certain limits, established annually by the Tax Administration.
Taxation by modules
On the other hand, module taxation is a form of taxation applied to certain economic activities, which simplifies tax filing and reduces the administrative burden for taxpayers. The module taxation system is based on the application of fixed coefficients to certain elements that make up the economic activity, such as the number of employees, the space of the activity or the fiscal power of the vehicle used for the development of the activity. Modular taxation is used to calculate income tax (IRPF) and business tax (IAE) for certain self-employed persons and companies.
In summary, the objective estimation and the module system are two forms of taxation in Spain that simplify the tax return and reduce the administrative burden for certain taxpayers. The objective estimation is applied to those taxpayers whose volume of operations does not exceed certain limits and is based on the application of a module system. On the other hand, taxation by modules is based on the application of fixed coefficients to certain elements that make up the economic activity.
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