April 15, 2021

The reduction of personal income tax 2019 benefits farmers and ranchers



The reduction in the modules in the 2019 IRPF agrarian extinction regime established at the national level benefits in the Community of Madrid important productions within its territorial scope, such as olive groves, cereal or wine grapes, as well as for livestock farmers, and may represent a reduction of the tax base of about 7 million euros.

This is reflected in the ‘Official State Gazette’ (BOE), which has been published today by the Ministerial Order of Finance, which reduces the Net Yield Indices applicable in 2019 in the objective estimation system of the Personal Income Tax (or modules), that benefits farmers and ranchers affected by various exceptional circumstances.

At the regional level, it benefits farmers dedicated to crops such as cereals, citrus, fruit trees, legumes, oilseeds and olive groves, as well as producers of extensive livestock, dairy cattle and beekeeping.

At the municipal level, the reduction in modules in various areas of the Community stands out, especially for wine grapes, as well as for olive products.

The Ministry of Agriculture, Fisheries and Food (MAPA) calculates that the application of this rule in the agricultural sector supposes a reduction of the tax base of the order of 614 million euros in the whole of the Spanish agricultural sector, the highest figure of the last five-year period and practically triple the previous year.

This order includes the proposal of the Ministry for the reduction of said indices. To apply the reduction, weather damages and other types of adversities, such as those derived from market problems, have been taken into account.

Spanish farmers and ranchers affected by the 2019 drought will be able to benefit, as well as the damage caused in September by the DANA storm (isolated depression at high levels).

Reductions for farmers who use electricity for irrigation are also applied to the 2019 module campaign, in application of a correction coefficient that was introduced in 2014 and that farmers who use electricity for irrigation may continue to apply on the net yield of irrigated crops, and that will mean a reduction of 20% of it.

Likewise, the reduction of 5% of the net yield calculated by the objective estimation method for 2019 is maintained. It is a horizontal measure that affects all the farmers and ranchers who are taxed in objective estimation.

In Madrid, the sectors benefiting from this measure are:

+ Agricultural sectors:

– Cereals from 0.26 to 0.18

– Citrus from 0.26 to 0.18

– Non-citrus fruit trees from 0.37 to 0.30

– Legumes from 0.26 to 0.18

– Oilseeds from 0.32 to 0.22

– Olive grove from 0.26 to 0.13

+ Livestock sectors:

– Milk bovine from 0.20 to 0.18

– Extensive breeding cattle from 0.26 to 0.18

– Extensive beef cattle from 0.13 to 0.09

– Extensive meat sheep from 0.13 to 0.09

– Milk sheep from 0.26 to 0.18

– Extensive meat goat from 0.13 to 0.09

– Milk goat from 0.26 to 0.18

– Extensive meat pork from 0.13 to 0.09

– Extensive breeding pigs from 0.26 to 0.18

– Beekeeping from 0.26 to 0.13

Other important reductions that affect several areas of the Community of Madrid are: grape for wine, with and without Designation of Origin, in two municipalities and two regions, with reductions of up to 50% of the corresponding index; and olive products from 0.26 to 0.05 in two regions (La Campiña and Las Vegas).

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