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V0668-25 15 April 2025 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · intereses de demora

Delays in wage payments are not subject to IRPF withholding or Model 190 declaration

A company asks whether IRPF withholding and Model 190 filing are required for interest on delayed wage payments set by court judgment. The DGT responds that such interest constitutes capital gains and is not subject to withholding or reporting under Model 190.

The question raised

Subjectivity to personal income tax (IRPF) withholding on the aforementioned late payment interest.

The DGT's ruling

Interest for late payment of wages is compensatory in nature as it indemnifies damages, and therefore it is taxed as capital gains rather than as income from movable capital. As it is not income subject to withholding under Article 75 of the RIRPF, no withholding is applicable. Furthermore, it should not be included in Form 190 as it is not covered by the obligation to report income subject to withholding.

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