What leads us to write this post is the question posed by a new client who has placed his trust in our professional office Pérez Parras Economists & Lawyers Firm in Málaga and Nerjaand who currently carries out his business activity in objective evaluation (Modules).

The question that almost every entrepreneur asks when opening a business is: Objective or simplified Direct evaluation? What interests me more?

Help to choose modules or not

I need help!!!!

A priori, it seems a complicated question. But, to reach an accurate decision, we will take into account a series of fairly defined factors, such as:

  • analysing how many sections (subheadings) of the IAE are linked to my activity,
  • if they can apply to the two evaluations,
  • and give an approximate valuation of the volume of income we are going to have,
  • and which must not be superior to 450,000 Euros, or otherwise, we would not be able to use Modules.

With these data, we can analyse what could be paid in the two schemes

Then we will be able to choose.

Objective Evaluation Scheme:

Bear in mind that the purpose of this scheme is to determine the net return of the business activities it covers.

The Ministry of Finance and Public Function (Ministerio de Hacienda y Función Pública) reach a verdict on the achievement through indices that result from statistics on the performance of companies included in the programme.

This means that the net return that an entrepreneur gets from developing an activity under an objective evaluation scheme will have nothing to do with the actual yield.

It is, however, a simplified taxation process. It allows small businesses to know what taxes they will pay, even before starting work.

On the other hand, the net return to be included in the direct evaluation scheme will vary over time; according to:

  • The actual income
  • Actual expenses of the activity to be developed,
  • The taxation according to the result obtained between this difference.

Direct Evaluation Scheme:

When deciding, remember that, if you opt for the direct evaluation scheme, you will not be able to change the modality until after 3 years from the beginning. On the other hand, if you choose Modules, you can stay for 1 year and then decide whether to change or not.

Modules or direct evaluation

I have found the right system for my business!!

Now what? Direct Evaluation or Modules?

After reading the information, it is probable that you are still unsure about the best option to start your activity.  Not one single answer is applicable. Then, all will depend on the particularity of each company.

Through experience, as a rule, if you have a small business, with little or no personnel, but usually have a high turnover, then you will probably want to use Modules.

If, on the other hand, you have a small business, with few workers, but do not know yet what income you will have in the year, ideally, you should take advantage of the Direct Evaluation Scheme.

However, if you are immersed in this debate right now, consult our office of Economists & Lawyers in Malaga and Nerja .

We will make a personalised study, so that you may choose the best programme option.