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V2819-17 2 November 2017 · SG de Impuestos sobre la Renta de las Personas Físicas Criterion in force
IRPF · intereses indemnizatorios

Compensatory interest for breach of obligations taxed as capital gains in 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 of contract, is taxed as capital gains and not as income from movable capital. As it does not derive from a transfer, the gain is quantified by the full amount of the interest received, without deducting procedural costs. The change in assets 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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