Example: calculation of late payment interest for improper deductions

Mr. RIT subscribed to shares of the entity “ZZ, SL”, a newly created or recently established company that meets the requirements of Article 68.1 of the Law of IRPFABBR for the application of the deduction for investment in newly created or recently established companies.

The contributions to the share capital were made in March 2022, April 2023 and May 2024, benefiting in each of them from the corresponding deduction.

In January 2025, Don RIT transfers all of the shares, failing to meet the minimum holding period required in its assets and therefore losing the right to the deductions made.

As a result, you will need to regularize your tax situation.

The amounts invested and the deductions made were:

Year	Amounts invested	Maximum applicable base	Deductions made
2022	70,000 euros	60,000 euros	18,000 euros (30%)
2023	120,000 euros	100,000 euros	50,000 euros (50%)
2024	110,000 euros	100,000 euros	50,000 euros (50%)

By what amount should the state and regional net tax liability of the 2025 declaration be increased, if said declaration is filed and paid on June 30, 2026, and the declarations for the 2022, 2023, and 2024 tax years were positive?

Solution:

Previous note: Please note that, effective from 1 January 2023, the maximum base for this deduction was increased from 60,000 to 100,000 euros per year, and the percentage of deduction of the amounts paid was increased from 30 to 50 percent by Final Provision 3.4 of Law 28/2022, of 21 December.

1. Amount of undue deductions

The taxpayer has failed to meet the requirement to maintain the investment for a period of more than three years (and less than twelve).

Therefore, the amount of the deductions that must be reimbursed is:

• Deduction made in the 2022 declaration: 18,000

• Deduction made in the 2023 declaration: 50,000

• Deduction taken in the 2024 tax return: 50,000

• Total 118,000

The sum of the amounts of the deductions improperly made in the 2022, 2023 and 2024 tax returns (118,000 euros) will increase the state net tax liability. 

To these amounts the corresponding late payment interest must be added, calculated separately for the amounts deducted in each of the financial years.

2. Amount of late payment interest

Warning : pFor the calculation of the late payment interest for the period from 01-01-26 to 30-06-26, the rate of 4.0625 percent has been applied, which is the late payment interest rate that will be in force until the General State Budget Law for 2026 is approved and comes into effect, which as of the closing date of this Manual has not yet occurred.

2.1 Late payment interest corresponding to the undue deduction of 2022 (18,000 euros)

a. Initial period : from 01-07-23 to 31-12-23 (184 days)

It is the period between the day after the due date of the declaration deadline for the 2022 fiscal year, which was June 30, 2023, and December 31, 2023. The default interest rate in force in 2023 was 4.0625 percent. Therefore:

• Late payment interest for the year 2023: [(18,000 x 4.0625 ÷ 100) x 184 ÷ 365] = 369.26

b. Intermediate period: from 01-01-24 to 31-12-25 (731 days)

It is the period between January 1, 2024 and December 31, 2025. The default interest rate in force in 2024 and 2025 was 4.0625 percent. Therefore:

• Late payment interest for the year 2024: [(18,000 x 4.0625 ÷ 100)] = 731.25
• Late payment interest rates for the year 2025: [(18,000 x 4.0625 ÷ 100)] = 731.25

c. Final period: from 01-01-26 to 30-06-26 (181 days)

It is the period between January 1, 2026 and the date of filing the personal income tax return for the 2025 tax year, in this case, June 30, 2026. The default interest rate in force in 2026, until the State Budget Law for 2026 is approved, which may establish a new interest rate, is 4.0625 percent.

• Late payment interest: (18,000 x 4.0625 ÷ 100) x 181 ÷ 365 = 363.64

d. Total late payment interest corresponding to the deduction for the year 2022

Total late payment interest: 369.26 + 731.25 + 731.25 + 363.64 = 2,195.40 euros

2.3 Late payment interest corresponding to the undue deduction of 2024 (50,000 euros)

a. Initial period: from 01-07-25 to 31-12-25 (184 days)

It is the period between the day after the due date for the declaration of the 2024 fiscal year, which was June 30, 2025, and December 31, 2025. The default interest rate in force in 2025 was 4.0625 percent. Therefore:

• Late payment interest for the year 2024: [(50,000 x 4.0625 ÷ 100) x 184 ÷ 365] = 1,023.97

b. Final period: from 01-01-26 to 31-06-26 (181 days)

It is the period between January 1, 2026 and the date of filing the personal income tax return for the 2025 tax year, in this case, June 30, 2026. The default interest rate in force during this period, until the State Budget Law for 2026 is approved, which may establish a new interest rate, is 4.0625 percent.

Late payment interest: [(50,000 x 4.0625 ÷ 100) x 181 ÷ 365] = 1,010.10

c. Total late payment interest corresponding to the deduction for the 2024 tax year

Total late payment interest: 1,023.97 + 1,010.10 = 2,034.07 euros

2.4 Late payment interest to be included in the 2025 tax return

• Corresponding to the undue deduction for 2022: 2,195.40
• Corresponding to the undue deduction of 2023: 4,056.49
• Corresponding to the improper deduction of 2024: 2,034.07

• Total interest: 8,285.96

The late payment interest corresponding to the years 2022, 2023 and 2024 will increase the state net tax liability by 8,285.96 euros.

Note to example: Remember that this deduction is exclusively state-funded and, therefore, only the state net tax liability is increased.