Simplified direct estimation: the 5% for hard-to-document expenses and other facts for the self-employed lawyer

A lawyer who practises on their own account pays income tax on income from economic activities. To calculate it, the law offers several methods, and one of them is direct estimation, in its normal and simplified versions.

The difference between the two is not minor. In the simplified one, the Tax Agency allows a fixed amount to be deducted for hard-to-document expenses: those the professional bears but cannot always back with an invoice. We explain how it works with data from the official manuals of the 2025 tax return campaign.

Normal and simplified: how they differ

According to the summary table in the 2025 Practical Income Tax Manual:

• In the normal version, net income starts from gross income, from which deductible expenses and depreciation are subtracted.
• In the simplified version, deductible expenses do not include provisions or ordinary depreciation. Instead a simplified depreciation table applies and then a percentage is subtracted for hard-to-document expenses.

The Tax Agency's economic activities leaflet adds that net income is calculated under the Corporate Income Tax rules, with the particularities of the version, and that depreciation is applied on a straight-line basis according to the specific table.

The 5% for hard-to-document expenses

The rule is simple:

The 2025 campaign's guide to changes confirms that the 5% percentage is maintained, applied to the set of deductible provisions and hard-to-document expenses.

The summary table specifies the incompatibility: the reduction provided for economically dependent self-employed people or those with a single unrelated client cannot be applied together with hard-to-document expenses. Those who work almost exclusively for a single firm or client must compare which of the two options favours them.

An example

If, after subtracting expenses and depreciation, a lawyer's positive net income is €30,000, 5% is €1,500, and it can be deducted in full. If the income were €50,000, 5% would be €2,500, but the limit leaves the deduction at €2,000.

The alternative mutual fund limit

Some lawyers, instead of contributing to the self-employed regime, do so in an alternative mutual fund. The Tax Agency's guide to changes records that, for 2025, the maximum contribution for common contingencies that acts as the deductible expense limit for contributions to the alternative mutual fund is €16,672.66.

If you are in the self-employed regime, contributions are deducted under their own rules. We explain the 2026 brackets in the guide to the self-employed contribution for lawyers.

Depreciation

The Tax Agency leaflet also recalls that in 2024, 2025 and 2026 freedom of depreciation is allowed for certain investments in self-consumption electricity or renewable thermal-use installations. For a firm that has invested in this type of installation, it may be relevant.

What to review

1. Check the version you are taxed under and whether its requirements are met. We do not review them here because the manuals consulted do not detail them in the pages cited.
2. Do the comparison if the reduction for dependent self-employed people can apply.
3. Still document the expenses that do have invoices: the 5% is an addition, not a substitute.
4. Review withholding and instalment payments, which are deducted from the final tax. We cover this in the guide on withholding and form 130.

The figures in this article correspond to the 2025 tax return campaign, according to the Tax Agency's manuals. It is wise to check each year's data before filing the return. More guides in Solo and small-firm lawyers.