In the General Law on the State Budget, the Government annually sets the legal interest rate on money. In 2021, the legal interest rate on money is 3.0%. The interest of tax delay is the way in which the tax administration should punish its debtors based on the value of the money if they have not fulfilled their tax obligations on time. One could say that it is a reference for setting a penalty if a debt is not paid to the Department of Finance within the set time. Legal interest on money is used, among other things, to calculate the assumed return on certain assets when there is no effective return. It is taken into account in the subsidies in order to calculate the income level of the person receiving the allowance while receiving a reduction. As we mentioned in the previous lines, late payment interest is the percentage charged if a payment or fee has not been paid at the time of payment. When it comes to transactions between companies or individuals, default interest usually appears in the contract signed between the parties, and this is the amount that must be paid as a penalty. If such a clause is not included, statutory interest on the money and amount for unpaid loan payments applies. The benchmark established by the law defines that the legal interest on money will be 3% in 2022.
This is a figure that applies to cases where the term of a debt is one year, that is, the debtor must pay within one year from the date on which he received the loan if he does not want to default. Thus, a person who does not subscribe to a one-year loan must pay an additional 3% of the total debt, for example, 150 euros if the debt is 5,000 euros. However, this amount shall be increased or reduced proportionately if the period is greater than or less than one year. For example, if someone owes 5,000 euros and does not respect a deadline of six months, or 180 days, what it must results from the calculation of the legal interest of 3% multiplied by 180 and divided by 365 (the days of the year), with which he owes almost 74 euros. 275.4 LGSS: 4. For the purpose of determining the requirements of absence of income and, where applicable, family obligations, all property, rights or income from work, movable or immovable property, economic activities and benefits shall be considered as foreseeable income or income, with the exception of social security subsidies for dependent children and with the exception of the amount of contributions to the financing of the special agreement with the administration. social security. Capital gains or capital gains are also considered income, as well as income that can be deducted from the economic amount of the estate, by applying to its value 100% of the applicable legal money interest rate, with the exception of housing, which is generally occupied by the employee, and assets whose income has been calculated. All this under the conditions laid down by regulation. We get the annual amount of statutory interest on the money (because it`s an annual order of magnitude), and with this result we can get the amount we need.
The legal interest rate on money in 2022 is 3.00%. In principle, the vast majority of financial obligations, such as debts and loans, are associated with the obligation to pay an additional amount in situations where repayment deadlines are not met. This compensation, known as legal interest, applies to companies and administrations as well as to personal transactions, is governed by the provisions of the Civil Code and is updated annually. Legal information: Article 275 of Royal Legislative Decree 8/2015, of 30 October, approving the revised text of the General Law on Social Security. For various reasons, they do not return the money, and we have to go to court to get it back. We receive a favorable judgment, which expresses the obligation of the debtor to return, as well as the refund, which adds the legal interest on the money. In the example of this second home, the legal interest rate on money, 3.00% in 2021, would be applied to the cadastral value of the house, which would mean that this person would receive an assumed return of around €18,000 per year (€1,500 per month), so they would not be able to claim the subsidy if they exceed the income limit of €723.75 per month (the updated income limit for 2021). This interest also applies to debts contracted by the tax authorities themselves to its taxpayers if the refund has not been made by 31 December. For the same reason, the Government itself determines the amount of default interest in the General Law on the State Budget. At present, interest on arrears until the approval of future general state budgets is 3.75%, the same rate as in the budgets of the previous legislature.
If we wanted to calculate the legal interest on the money for one year, we would work as follows: 6.000 € (x) 3.00% = 180 Euro If a debt is not paid, compensation for the damage for the violation is calculated on the basis of the legal interest on the money, if the agreement for which the debt was generated does not provide for any other form or percentage of compensation. This is provided for in the Civil Code: Article 1108 of the Civil Code provides that debtors in default must pay the «payment of agreed interest and, in the absence of agreement, in the legal interest» as damages. The benchmark, which is calculated as a percentage, is dynamic and is modified according to the state of the country`s economy. The funny thing is that although it is the Civil Code that defines the legal interest, its renewal depends on the General State Finance Law (PGE), which it must update before the first day of the year. Finally, if the debt is subject to the law on late payments, you should take into account that you can claim from the debtor all costs related to the procedures carried out to claim payment: procedural costs, legal advice, office fax or telephone calls.