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V2704-17 23 October 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · intereses indemnizatorios

Compensatory interest is taxed as capital gains within the savings tax base

A taxpayer requested clarification regarding the taxation of statutory and late-payment interest received following a settlement agreement. The DGT has determined that the principal amount does not generate a new gain, whereas the interest, being compensatory in nature, constitutes capital gains.

The question raised

Taxation under Personal Income Tax (IRPF).

The DGT's ruling

Interest of a compensatory nature, which indemnifies damages for breach or delay, is taxed as capital gains pursuant to Articles 25 and 33.1 of Law 35/2006. As it does not derive from a transfer, the gain is the full amount of the interest received, without the possibility of deducting procedural expenses. The temporal imputation occurs when the interest is recognized and its payment is agreed upon, and it must be included in the savings tax base.

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