Late payment interest in the event of enforcement of an upholding decision with the debt paid by the obligor

The purpose of the regularisation is the elimination of the reduction of the LISD art.20.2.c applied for the acquisition of shares in a company and the incorrect valuation of the household goods. The taxpayer pays this debt within the voluntary payment period.

As a result of this regularisation, disciplinary proceedings were initiated and ended with the imposition of a financial penalty, against which an appeal was lodged, which was partially upheld, in relation to the calculation of the household furnishings. In this regard, a refund was issued to the interested party in accordance with the enforcement agreement issued by the Tax Services of the Autonomous Community.

Not being satisfied with the calculation of the refund made, the interested party lodged a complaint with the TEAC(*), which determined that, in order for the correct execution of its resolution to be carried out, the following was required:

• the settlement agreement initially issued be annulled in its entirety, which would entail recognition of the undue nature of the payment made by the claimant and the right to a refund, together with the late payment interest accrued on that amount and calculated from the date of payment until the date of the refund agreement;
• a new tax settlement is made in accordance with the TEAC ruling, with interest for late payment accruing on the new amount from the end of the voluntary payment period until the date of the new settlement, and
• the amount to be refunded resulting from the undue payment is offset against the amount to be paid resulting from the new settlement.

For the calculation of interest, there are certain limitations that affect only the administration. The TEAC reminds the taxpayer that interest for late payment will not be charged to the taxpayer from the moment that the Administration fails to comply with any of the established deadlines for reasons attributable to it, and once one year has passed since the initiation of the corresponding request without an express resolution having been notified, and provided that the suspension of the claimed act has been agreed, interest for late payment will cease to accrue under the terms established.

In this regard, the TEAC modifies its criteria maintained in previous rulings, stating that the above limit is applicable not only to cases of suspended tax assessments, but also to those in which the cancelled debt has been paid by the taxpayer, as is the case here.

Consequently, late payment interest must be calculated from the date on which the interested party makes the undue payment of the debt resulting from the inspection procedure, which is subsequently modified by resolution of the TEAC, until the date on which the agreement to enforce said resolution is issued.

If you have any doubts regarding this issue, please do not hesitate to contact us, by telephone to Carles Monfort Codina or by e-mail to cmc@btsasociados.com, we will be delighted to help you.

(*) TEAC: Economic-Administrative Tribunals