Tax interest

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When tax rates are interest rates referred to by the financial authority to certain claims arising from the liability to tax will be charged. In the case of full interest, tax interest may also be credited to a tax refund. Sections 233 ff. Of the tax code form the basis . The tax will only earn interest, except as required by law. Ancillary tax payments ( late payment charge , late charge , penalty .. And the like) can not earn interest; no compound interest is charged either . The AO knows the following types of interest:

Full interest

Full interest on tax claims was introduced in 1990. Regardless of whether a tax claim or tax refund has expired, the tax office pays interest at a rate of 0.5% per full month after an interest-free period of 15 months. The legal basis is provided by Section 233a of the Tax Code .

The interest period begins 15 months after the tax was incurred. In principle, assessment taxes arise at the end of the corresponding calendar year. For the income tax for 2004, the interest period began on April 1, 2006. The interest period ends with the tax assessment by the corresponding tax assessment .

Unconstitutionality of the interest rate

In the opinion of the Federal Fiscal Court (BFH decision of April 25, 2018 IX B 21/18), the current statutory regulation of tax refunds and back payments is subject to interest at 0.5% per month, at least from 2015 onwards, it is not constitutional. The court had granted an application to suspend the execution of a corresponding interest notice. On August 18, 2021, the Federal Constitutional Court announced that the amount of tax interest at 6% annually was unconstitutional from 2014 and that this must be corrected for the period since 2019. The legislature was imposed to make a new regulation by July 31, 2022 (Az. 1 BvR 2237/14 and others).

Tax liability of the reimbursement interest

The refund interest is subject to capital receipts and thus income tax in the year it is paid. Capital gains tax is not levied. The interest on tax back payments could be deducted as special expenses until 1999 . The Federal Fiscal Court decided on June 15, 2010 that reimbursement interest is not taxable. However, the judgment will not be published and will not be applied by the tax authorities. Due to the Annual Tax Act 2010, the tax refund interest was explicitly included as income from capital assets. This regulation applies from the entry into force for all cases that are not yet final.

See also

Individual evidence

  1. Interest on additional tax claims and tax refunds at 6% annually from 2014 is unconstitutional. Press release No. 77/2021 of August 18, 2021. In: Bundesverfassungsgericht . August 18, 2021, accessed August 19, 2021 .
  2. NWB on the BFH judgment of June 15, 2010 ( Memento of April 21, 2016 in the Internet Archive )
  3. Addition to Section 20, Paragraph 1, No. 7, Clause 3 of the Income Tax Act
  4. Section 52a (8) of the EStG on the new regulation