IRPF Modules 2025: index reduction for farmers and livestock breeders affected by disasters

Key data

Farmers and livestock breeders in objective estimation who suffered losses due to exceptional circumstances in 2025 have the right to apply reduced net income indices in their IRPF return. The Order HAC/484/2026, of May 14, published on May 18, 2026, modifies these indices retroactively as of January 1, 2025.

The practical result is immediate: a lower taxable base and, therefore, less tax to pay. The risk of not acting is also clear: whoever does not apply the updated indices will pay excess tax, paying more than legally owed.

What does this regulation establish?

The objective estimation method of IRPF, known as modules, allows farmers and livestock breeders to calculate their net income based on indices predefined by the Tax Administration, rather than maintaining detailed accounting of actual income and expenses.

When exceptional circumstances occur that seriously affect production—such as droughts, floods, frosts or other catastrophes—the regulations allow these indices to be reduced so that taxation reflects the economic reality of the affected tax year.

Order HAC/484/2026 modifies the net income indices applicable to tax year 2025 for affected agricultural and livestock activities. The new indices, lower than ordinary ones, reduce the taxable base calculated in modules and, consequently, the resulting IRPF tax.

It is essential to review the index tables included in Order HAC/484/2026 to identify which activities and geographic areas are covered, as the reduction is not universal: it applies exclusively to activities and territories expressly included in the regulation.

Economic and operational impact

The direct impact is a reduction in the tax burden on the 2025 tax return, which is filed in 2026. By applying a net income index lower than the ordinary one, the taxable base calculated in modules is lower, resulting in a lower IRPF tax.

The operational impact is equally relevant: affected taxpayers or their tax advisors must actively review the updated tables before filing the return. This is not a reduction that applies automatically; it requires identifying the correct activity, geographic area, and corresponding index.

• Lower taxable base in modules for tax year 2025.
• Effective reduction in IRPF tax to pay or greater refund to receive.
• Need to review and update calculations before filing the 2025 tax return in 2026.
• Risk of excess taxation if new indices are not applied.

Who does it affect?

This regulation directly affects the following profiles:

• Farmers under the objective estimation method (modules) of IRPF whose farms suffered damage from exceptional circumstances in 2025.
• Livestock breeders under the IRPF modules regime affected by droughts, floods, frosts or other catastrophes during tax year 2025.
• Tax advisors and accounting firms preparing tax returns for clients in the agricultural and livestock sector.
• Agricultural cooperatives and organizations advising their members on tax matters.
• CFOs and financial managers of larger agricultural or livestock operations under the modules regime.

It does not affect farmers or livestock breeders who are taxed under direct estimation (normal or simplified), as in that regime taxation is based on actual income and expenses.

Practical example

A farmer under the IRPF modules regime who grows cereals in an area affected by drought in 2025 normally calculates their net income by applying the ordinary income index established for their activity.

With Order HAC/484/2026, if their activity and geographic area are included in the regulation's tables, they may apply a reduced net income index. This means that the taxable base on which they calculate their IRPF will be lower than what would result from the ordinary index.

The practical result: if the ordinary index was, for example, 0.26 and the reduced index approved for their activity and area is lower, the farmer will calculate their net income—and therefore their IRPF tax—on a lower figure. If they do not review the tables and apply the ordinary index, they will pay more tax than legally owed, with no way to recover it except through an amended return.

The tax advisor for this farmer must consult the tables in Order HAC/484/2026, identify the activity code and geographic area, and apply the corresponding reduced index in the 2025 IRPF return.

What should those affected do now?

1. Verify if the activity and geographic area are included: Consult the index tables of Order HAC/484/2026 to check if the specific agricultural or livestock activity and the location of the farm are covered by the reduction.
2. Identify the applicable reduced net income index: Locate in the tables the specific index for the activity and area, which will replace the ordinary index in the calculation of 2025 IRPF modules.
3. Recalculate the taxable base with the new index: Apply the reduced index to the volume of operations or reference magnitude to obtain the reduced net income for tax year 2025.
4. Apply the correct index in the 2025 IRPF return: Incorporate the updated calculation in the tax return for tax year 2025, which is filed in the usual period of 2026.
5. Review installment payments already made: If installment payments on account of 2025 IRPF were made with the ordinary index, the annual return will reflect the difference to be refunded or offset.
6. Coordinate with the tax advisor: If return management is outsourced, provide this information to the advisor or accounting firm so they apply the updated indices and do not pay excess tax.