Skip to content
Back to index
V0503-23 2 March 2023 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · pérdida patrimonial

Legal and solicitor fees do not constitute a capital loss for Personal Income Tax purposes

A taxpayer inquired whether legal and solicitor fees incurred after losing a lawsuit, where no costs were awarded, qualify as a capital loss. The Directorate General for Taxes (DGT) ruled that these expenses represent an application of income to consumption and do not affect the tax calculation.

The question raised

Having lost the lawsuit and in the absence of an award of legal costs, the question is whether the expenses for lawyer and court representative incurred constitute a capital loss.

The DGT's ruling

The expenses inherent to legal defense (lawyer and court representative) incurred by a taxpayer constitute an application of income to consumption in exchange for services received. Therefore, they cannot be considered capital losses pursuant to Article 33.1 of Law 35/2006. Unlike the award of legal costs, which does constitute a capital loss, these inherent expenses have no impact on the settlement of Personal Income Tax (IRPF).

Book your free first meeting