The 1st Panel of the Superior Court of Justice decided that there is no incidence of Personal Income Tax on default interest arising from social security benefits paid late by the INSS.
The decision benefits taxpayers who filed lawsuits, in which they will be victorious and will ultimately receive their benefit plus interest on arrears, since the Income Tax amount will only be levied on the benefit amount and not on the interest arising from late payment.
In general terms, the ministers’ understanding was that interest for late payment aims to restore assets, not increase them, and that income tax cannot be levied.
