Miguel Ángel Molina, partner of the Tax Department of Tomarial, has published an article in the magazine 3 Economy: "In return with the deductibility of late payment interest in Corporation Tax". In it, he analyzes the recent ruling of the Supreme Court, which sets the criterion on this issue, which has been controversial since 2010.
As the article explains, the discrepancies on the deductibility of default interest dates back to 2010, when the Central Economic-Administrative Court (TEAC) considered that they were not deductible. The criteria of the TEAC and the General Directorate of Taxes (DGT) were uneven for a time and the Tax Administration (AEAT) chose to consider “non-deductible the default interest derived from settlements accrued under the regulations prior to Law 27/2014 (in force for the years as of January 1, 2015). However, it did consider deductible the interest generated by the suspension procedures; that is, suspensive interest, due to its financial nature. "
After different challenges and contradictory judgments in different superior courts, the Supreme Court has ruled in a judgment of February 8, 2021, as analyzed by Miguel Ángel Molina: “it resolves that the default interest, both derived from administrative liquidation and suspensive, show the Consideration of tax deductible expense in Corporation Tax (…) The argument of the High Court coincides with that used by the DGT in its resolution of April 4, 2016: late payment interest is not penalizing and is paid in compliance
of the law. Once again, it has had to be the Supreme Court who establishes order, coherence and security in a matter as frequent and recurrent as delay interests. "