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A query was raised regarding whether late payment interest on compensation for contract expiration (under Art. 49.1.c of the Workers' Statute) is exempt from Personal Income Tax (IRPF). The Directorate General for Taxes (DGT) ruled that the compensation itself is not exempt and that the interest must be taxed within the savings tax base.
Taxpayers receiving late payment interest on redundancy payments cannot claim an exemption and must report this income as capital gains.
The tax team reviews your specific situation.
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