The Treasury will not penalize those who do not report old late interest in their income tax

Earlier this year, the Supreme Court he corrected himself and found that, contrary to what he previously ruled, default interest which taxpayers received for the return of unjustified income from the Tax Administration were not exempted from the Personal Income Tax, but should be taxed as a capital gain. However, it is now Central Economic Administrative Court (TEAC)depending on the treasury, protect taxpayers errors of the high court, since in two decisions of May 29, it determines that those who did not report interest on late payment — protected by the Supreme Court ruling from December 2020, which declared them exempt — will not have to do so again, applying the principle of “protection of legitimate expectations” .

there will be no regularization

The practical translation is that, if after the January verdict of the Supreme Court — the one considering late payment interest is not exempt— The Treasury intends to regulate those that were not paid by the taxpayers who received them, it will not be able to.

TEAR claims that “past balances cannot be regulated, to the detriment of the taxpayerin which he applied in his self-assessment the legal criterion established in the judgment of December 3, 2020, a criterion which, since it was in force at the time of his self-assessment, was a criterion which, according to the doctrine of this Central Court, is related to by the Tax Administration”.

It would be “contradictory”

In the TAR, they also believe that it would be “obviously contradictory” if the system “behind the taxpayer’s back” punishes the taxpayer who then complied with what was established by the Tax Administration, so that a subsequent change of criteria – such as the one carried out by the Supreme Court – would not be applicable “unless the new one proves to be more favorable for the economic or patrimonial interests of the taxpayer”.