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V1816-19 15 July 2019 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · intereses de demora

Late payment interest received following tax self-assessment rectification is taxed as capital gains

A query was raised regarding the taxation of late payment interest received after a rectification of an Income Tax (IRPF) self-assessment. The Directorate General for Taxes (DGT) ruled that, as these interests are compensatory in nature, they are classified as capital gains and must be included in the savings tax base.

The question raised

Temporal imputation and classification within Personal Income Tax of late payment interest received.

The DGT's ruling

Late payment interest intended to compensate for damages resulting from breach or delay constitutes compensatory interest and not returns on movable capital. These must be taxed as capital gains, quantified by the full amount received without deducting legal fees. The change in assets occurs when the interest is recognized, quantified, and its payment is agreed upon, and it must be included in the savings tax base.

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