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V1687-19 8 July 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · expropiación forzosa

Expropriation gains and late payment interest are included in the savings tax base

The taxpayer asks how to tax and when to report the amounts received from a compulsory expropriation and its late payment interest. The Tax Agency responds that the capital gain and compensatory interest must be included in the savings tax base.

The question raised

Taxation and temporal imputation of the amounts received.

The DGT's ruling

Expropriation generates a capital gain or loss in the period of the occupation of the asset. If, following an appeal, a right to additional amounts is recognized, the gain is imputed when the resolution becomes final or, if more than one year has passed until collection, according to the rules for installment transactions. Late payment interest due to delay in payment is compensatory in nature and is taxed as capital gains in the savings tax base. The imputation of these interests takes place when they are recognized, quantified, and their payment is agreed upon.

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