The continuous expansion of markets promotes the diversity of commercial activities, this does not minimize agricultural activities as an economic activity. If you are interested in entering these or for some particular reason you’re still in the process of being regularized, this information could interest you.
Let’s start with the beginning,
The primary sector is classified in the following activities:
- Agriculture: Growing of grains, vegetables, greenhouses and nurseries, floriculture
- Livestock: Exploitation of cattle, pigs, poultry, sheep and goats
- Forestry: Implementation and regeneration of forests.
- Beekeeping: Collection of honey and royal jelly, harnessing the wax of the hives.
- Aquaculture: Control of all or part of the cycle of aquatic animals or plants.
- Hunting: Finding and pursuing animals with the aim of capturing or killing them.
- Fishing: Extract from the waters, animals that inhabit that environment
Accounting aspect
In the Financial Information Standards, specifically in the bulletin E-1 , it provides the guidelines for the correct accounting treatment of these activities, depending on each item, such as:
- Biological assets.
- Agricultural products at the time of harvest.
- Government grants.
The treatment of biological assets differs from the end of each one, as well as from the stage in which they are found, for example: in livestock, we will classify the cattle as an asset when they are exploited for the sale of milk, offspring and semen, But if you sell them, you must sort them into the warehouse account.
For agriculture the treatment is similar, when planting cane, it should be considered as a biological asset, when the time of harvest arrives there should be a reclassification in the storage account.
Tax aspect
For tax matters, agricultural activities have great facilities, which can be seen in Chapter VIII of the Income Tax Law (LISR) called: Régimen de actividades agrícolas, ganaderas, silvícolas y pesqueras..
In order to benefit from these facilities, the chapter stipulates that only moral and physical persons dedicated exclusively to agricultural, livestock, forestry or fishing activities may be favored. Exclusivity is understood as taxpayers whose income from such activities represents at least 90% of their total income, not including income from disposals of fixed assets or fixed assets and land owned by them That would have been affected to its activity. If this is the case, will be exempt from ISR payment.
If you want to know the amounts established by law that define the payment or reduction of the ISR, in this sector, we invite you to allow us to advise you. It will be a pleasure to assist you.
