The Government reduces the tax burden for farmers and ranchers

The Official State Gazette has published an Order from the Ministry of Finance and Public Function that sets the Net Income Indices in the personal income tax declaration for objective estimation (modules), which include the proposals of the Ministry of Agriculture and Fisheries, Food and Environment for reducing the fiscal pressure for farmers and ranchers affected, among other reasons, by the drought.

The regime of objective agrarian estimation of income tax is the majority among farmers and ranchers in our country, being chosen by around one million respondents.

The reductions of modules approved in the published Order result in a proportional decrease of the taxable base derived from the yields of the agricultural activity, and therefore, of the result of the IRPF declaration.

In this way, the reductions established on a national basis for the declaration of the 2017 income of farmers and ranchers, present the following changes in the agricultural sector: cereals and legumes have seen a decrease of 0.26 to 0.18, the potato from 0.26 to 0.13 and the stone fruit, from 0.37 to 0.20.

Likewise, in the livestock sector the reduction has been as follows: in beekeeping from 0.26 to 0.13, in the bovine milk sector from 0.20 to 0.16, in the extensive beef from 0.13 to 0.00 , 09, in the bovine of extensive breeding of 0.26 to 0.18, in rabbit breeding from 0.13 to 0.07, in the ovine and goat of extensive meat of 0.13 to 0.09 and in the ovine and goat milk from 0.26 to 0.18.

In addition, of the pig of extensive meat that diminishes of 0,13 to 0,09 and the pig of extensive rearing of 0,26 to 0,18.

Most of these minoraciones are established to respond to the drought that affected large areas of the Iberian Peninsula, reducing the module of extensive livestock production to compensate for the reduction of pasture availability.

Also in the field of livestock, the bovine milk modules and rabbit breeding are reduced at the national level, to take into account their particular market situation.

With regard to crops, the module on cereals and legumes has been reduced at the national level, in order to take into account the effects of the drought. Likewise, the national index in the potato and stone fruit cultivation module is reduced, to take into account the market difficulties that they are experiencing.

The reduction of modules also takes into account the effects of the drought on other crops, with large reductions in citrus, olives, grapes, oilseeds and fodder in large areas.

The effects of other climatic adversities on the crops in 2017, such as the cold wave of January, the episodes of extreme heat that occurred in summer and those of intense precipitations that took place throughout the year, are also reflected in the proposed reduction of modules for those municipalities in which the adversity in question has had an impact.

In this context, Order HFP / 1159/2017, of November 28, already established in its Fifth Additional Provision a reduction of the rice module for the 2017 and following declarations, whose index went from 0.37 to 0.32.

Based on the available tax and agrarian information, it is estimated that the set of all these reductions of modules can imply, with respect to a year without reductions, a reduction of the tax base of the order of 580 million euros.

Reductions in electricity for irrigation

On the other hand, Order HAP / 2222/2014, of November 27, permanently introduced a correction coefficient that can be applied by farmers who use electricity for irrigation on the net yield of irrigated crops, and which implies a reduction of 20% of it.

The Government adopted this measure, together with the partial exemption of 85% of the Electricity Tax for irrigators, with the aim of compensating the effect on irrigators of the increase in electricity tariffs for the summer of 2013.

Finally, the Ministry emphasizes that Order HFP / 1823/2016, of November 25, by which the method of objective estimation of Personal Income Tax and the simplified special VAT regime is developed for 2017, establishes in its first Additional Provision a reduction of 5% of the net yield calculated by the objective estimation method for 2017. This is an extraordinary horizontal measure that affects all farmers and ranchers who pay in objective estimation.

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