Deductibility of interest on late payment interest for Corporate Income Tax purposes

Recently, the Supreme Court through its judgment of February 8, 2021, appeal No. 3071/2019, resolves that for the purposes of Corporation Tax, late payment interest is considered a tax deductible expense, contrary to what is maintained by the Tax Administration.

Since late payment interest is intended to compensate for a delay in the fulfillment of an obligation to give, not admitting its deductibility requires a legal provision to that effect.

Likewise, late payment interest is correlated with income, therefore, they must be deductible.

Judgment: