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V0811-17 ·30 March 2017 ·consulta-vinculante Medium impact
Tax

Legal costs awards and compensatory interest are taxed as capital gains

The taxpayer inquires about the tax treatment of legal fees recovered through a costs award and moratory interest received via court judgment. The DGT rules that both concepts constitute capital gains, rather than income from capital or professional activities.

In 6 key points

How it affects those involved

Taxpayers recovering legal costs or interest through litigation must report these amounts as capital gains in their tax returns, rather than as professional income or investment income.

Lifecycle

2017-03-30PublishedPublished in the BOE
Official text Based on BOE data (boe.es). Information, not advice.

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This analysis is informational only and does not constitute legal advice or create a client-adviser relationship. BM Consulting.
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