Are non-tax late payment interest deductible in the IS?

The General Directorate of Taxes, in a binding consultation carried out on April 6, pronounces on the deductibility of NON-tax late payment interest in the Corporate Tax in the following terms

Those derived from debts with the SS and the General Directorate of Traffic, and those from commercial operations, are financial expenses.

Those payable for debts with Administrations or Public Entities other than tax administrations in the exercise of their administrative powers, among which are mentioned debts with Social Security and debts with the General Directorate of Traffic, which have said legal classification and purpose. compensatory for the delay in the payment of the debt, are considered financial expenses. Thus, since there is no provision that denies their deductibility, they are deductible.

Derivatives from commercial operations, although they correspond to contracts made with the public sector, by their very nature cover the delay in the payment of a debt, which is why they are classified as financial expenses.

However, it must be taken into account that since these are financial expenses, they are subject to the limitation generally established for this type of expenses. Additionally, the temporal imputation rules must be taken into account, so that the expenses recorded in a reserve account because they correspond to an accounting error are deductible in the tax period in which they are recorded for accounting purposes, as long as they do not generate lower taxation.

If they do not cover fines and penalties, compensatory damages are also deductible.

In relation to the compensation due in order to compensate for the damage caused, in the part that does not cover fines and criminal and administrative sanctions or surcharges for the executive period or untimeliness, as is the case of compensation for civil liability, delay in the delivery of a work with extra costs, completion works and repair of construction defects, are considered tax deductible, since they do not correspond to a penalty or surcharge for the infraction committed.

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