- This is a linear reduction that takes into account the drought and the economic consequences of the war in Ukraine
- In addition, it includes a reduction of between 30% and 50% for all livestock sectors and those of cereals, legumes, oilseeds, olives, apricot, peach, nectarine, almond and chestnut
- There is also a decrease in the net yield of 35% for the purchase of agricultural diesel, and 15% for the purchase of fertilizers
- The reductions established last year for farmers who have used electricity for irrigation and for farmers for the use of feed purchased from third parties are maintained
- All reductions may reduce the tax base by around 25.7 million euros in the Community of Madrid
The Official State Gazette has today published the order of the Ministry of Finance and Public Function to reduce the Net Return Indices applicable in 2022 in the system of objective estimation of the Personal Income Tax (IRPF), the so-called system of modules, for farmers and ranchers.
This order includes the proposal of the Ministry of Agriculture, Fisheries and Food (MAPA) to reduce these indices and takes into account the incidence of drought and other exceptional circumstances that affected the profitability of many agricultural and livestock farms during 2022, such as the war in Ukraine, which caused an increase in production costs.
The order establishes an overall reduction in net yield of 25%, which may be applied by the approximately 800,000 farmers and ranchers who are taxed by the module system. Certain sectors in the most vulnerable situation also benefit from specific reductions, which are 50% for olive, almond and beekeeping, and 30% for cereals, oilseeds and legumes, chestnut, peach, nectarine, apricot and the other livestock sectors.
It is estimated that all the reductions contemplated in the order published today represent a reduction in the tax base of the order of 1.807 billion euros, and is the most far-reaching of the last decade.
The order also allows the claimants in the Agrarian Objective Estimate of the IRPF to reduce the previous net yield by 35% for the purchase of agricultural diesel, and 15% for the purchase of fertilizers, as established in Order HFP/1172/2022, of 29 November, which develops the method of objective estimate of the IRPF for 2023.
In addition, the reductions in the correction rates that were established last year for feed purchased from third parties and for crops on irrigated land using electrical energy are maintained. Specifically, the rate applicable to livestock activities feeding livestock with feed and other products purchased from third parties is set at 0.5, provided that they represent more than 50% of the amount of food consumed, and applies to both intensive and extensive livestock sectors. The corrective rate for irrigated land crops using electric power is reduced to 0.75
The reductions in the net return indices established for the autonomous community of the Community of Madrid are as follows:
Agricultural sectors:
- Cereals, legumes and oilseeds from 0.26 to 0.18
- Oilseeds from 0.32 to 0.22
- Olive products from 0.26 to 0.13
- Apricot, peach and nectarine from 0.37 to 0.26
- Almond from 0.26 to 0.13
- Chestnut from 0.26 to 0.18
Livestock sectors:
- Apiculture from 0.26 to 0.13
- Bovine milk from 0.20 to 0.14
- Beef from 0.13 to 0.09
- Bovine breeding from 0.26 to 0.18
- Sheep and goat meat from 0.13 to 0.09
- Sheep and goat milk from 0.26 to 0.18
- Pork meat or from 0.13 to 0.09
- Breeding pig from 0.26 to 0.18
- Poultry farming, from 0.13 to 0.09
- Cuniculture from 0.13 to 0.09
- Equine from 0.32 to 0.22
In addition, throughout the Community of Madrid, a minority is established for olive production superior to the national one, going from 0.26 to 0.09. All of these reductions may mean a reduction in the tax base of the claimants in the system of objective agrarian estimation of about 25.7 million euros for Madrid, which will benefit about 25,000 farmers and livestock farmers.