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V1240-19 30 May 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · intereses legales

Legal interest on housing refunds taxed as capital gains in the savings tax base

An individual requested clarification on the taxation of legal interest received following a court ruling that compelled a bank to refund money paid to a property developer. The Directorate General for Taxes (DGT) ruled that these interests are compensatory in nature rather than remunerative.

The question raised

Taxation of interest in the Personal Income Tax.

The DGT's ruling

Legal interest derived from the judgment for the refund of advance payments in housing construction is compensatory in nature as it indemnifies damages and losses. As they are not returns on movable capital, they must be taxed as capital gains. Their inclusion in the tax assessment must be made in the savings tax base, pursuant to Article 49.1.b) of the Personal Income Tax Law.

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