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V4080-15 21 December 2015 · SG de Impuestos sobre las Personas Jurídicas Criterion in force
IS · intereses de demora

Late payment interest arising from administrative checks is tax deductible

The querying entity asks whether late payment interest resulting from delays in paying Corporate Tax instalments is deductible. The DGT responds that, as these interests are financial and compensatory in nature rather than punitive, they are indeed deductible.

The question raised

Whether late payment interest is tax deductible.

The DGT's ruling

Late payment interest has a financial and compensatory nature that distinguishes it from penalties. It does not constitute expenses derived from tax accounting, nor donations, nor actions contrary to the legal system. Therefore, it is deductible as a financial expense, subject to the limits of Article 16 of the LIS. Interest from previous fiscal years is deducted in the period in which it is recorded in the accounts charged against reserves.

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