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A taxpayer inquired whether legal fees, calculated as a percentage, could be deducted from received expropriation and procedural interest. The Directorate General for Taxes (DGT) ruled that legal expenses are deducted from the property's transfer value.
This clarification confirms that legal costs associated with a compulsory purchase can be applied against the transfer value to reduce the taxable capital gain, rather than being treated as a deduction from interest payments.
The tax team reviews your specific situation.
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