A special division of the Supreme Court (Audencia Nacional), in their ruling dated June 30, 2008, upheld the savings bank’s actions, considering that, having deducted the interest paid to the depositor as a consequence of the early fund withdrawal penalty, the 18% withholding on interest in question could not be carried out on the amount paid out up front, but rather on the final amount paid to the depositor at the contract’s termination. In this way, the tax authorities were not unfairly enriched.
Notwithstanding, the ruling contains a specific vote against the regularization of the withholding rate. In this case, reducing the withholding is considered inappropriate, as the interests were deemed due and, based on Article 94 of the LIRPF, the obligation to deduct originates at the time in which the yields are due or at the time of their payment or delivery, which in this case was at the start of the contract term.
For further information, please contact Javier Valls Aracil: [email protected]