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V1238-19 30 May 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IVA · devengo

VAT on professional services is accrued upon provision and procedural default interest is not subject to VAT

An architect has requested clarification regarding the taxation of fees invoiced in 2012 that are to be collected via a judicial settlement between 2019 and 2021. The DGT clarifies that the VAT was accrued in 2012 and that procedural default interest is not subject to VAT as it is compensatory in nature.

The question raised

Taxation under VAT and Personal Income Tax (IRPF).

The DGT's ruling

VAT on professional services accrues when the services are rendered; therefore, it must be declared in the period in which they were invoiced, regardless of when payment is received. Procedural default interest does not form part of the VAT taxable base due to its compensatory nature. For Personal Income Tax (IRPF), when applying the cash basis, fees are taxed upon receipt, whereas default interest is taxed as a capital gain within the savings base when received.

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