Deferral (tax law)

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Deferral in terms of tax law refers to the postponement of the due date of a tax claim into the future. Unlike the deferral in the sense of the law of obligations , the deferral of taxes is an administrative act. This applies to the granting, but also to the rejection of the application.

Tax deferral in general

According to § 222 Tax Code , the tax authorities can defer claims from the tax debt relationship in whole or in part, if the collection when due would mean considerable hardship for the debtor and the claim does not appear to be jeopardized by the deferral. As a rule, the deferral should only be granted upon application and against provision of security. The security deposit can e.g. B. in the form of a security mortgage. Tax claims against the tax debtor cannot be deferred if a third party (payer) has to pay the tax for the account of the tax debtor, in particular to withhold and transfer it. The deferral of the liability claim against the payer is excluded if he has withheld tax deductions or received amounts that contain a tax

Payment deferral

Also called technical deferral or deferral for objective reasons, is the simplest form of deferral. In contrast to a real deferral, it is initially granted without interest. It can be considered if there is a debt and at the same time there is a foreseeable possibility of offsetting the tax liability with a tax refund claim (bridging deferral).

background

The immediate collection of the tax liability would represent a considerable hardship for the tax debtor if the tax claim is matched with a corresponding tax refund claim with a probability bordering on certainty. It is assumed that the legal principle of “good faith” means that the tax office would act fraudulently if it were to claim a tax that it should actually reimburse immediately. The taxpayer has the duty to help determine the counterclaim. In the case of merely registered tax credits without financial recognition, there is no offset in accordance with Section 226 (3) AO, so that payment deferrals are also ruled out. In case of doubt, the deferral can be refused.

example

An annual sales tax return and an income tax return are submitted at the same time. With the annual sales tax declaration, the entrepreneur registers a payment that he has to transfer within one month without any further request by the tax office, § 18 Paragraph 4 Sales Tax Act (UStG). On the other hand, based on the income tax return, the taxpayer expects a tax refund according to Section 36 (4 ) Income Tax Act (EStG) .

The taxpayer can apply for the VAT liability to be deferred without interest until the income tax refund is certain and the offsetting can take place. As a rule, the processing of the income tax return ( assessment ) is preferred in these cases so that the interest-free deferral is not wrongly done.

Subsequent interest is paid on the deferred amounts if the tax refund claim is lower than originally expected. Interest is paid on the partial amount that has not been redeemed. Interest is also possible if z. B. the credit was wholly or partially interest in accordance with § 233a AO. Deferred interest to be paid will be offset against this credit interest.

Deferral in the event of financial emergency

Also known as deferral for personal reasons. A real deferral can only be granted against interest only to bridge a temporary financial emergency (deferral requirement). The tax debtor may not have culpably caused the financial emergency himself (deferral). The tax claim must not be jeopardized by the deferral. A deferral for personal reasons can only be considered if there is a need for deferral and deferral worthiness. It is also important what type of tax it is, as there are taxes that cannot or will not be deferred.

Requirement for deferral

A deferral is required if the immediate collection of the tax liability would mean considerable hardship for the tax debtor. There is considerable hardship if the immediate payment obligation would deprive the tax debtor of his economic existence. The tax debtor should therefore provide evidence that he is in a temporary financial crisis that will be resolved in the near future. The tax claim must be equal to all other obligations of the taxpayer. The taxpayer can therefore be expected to take out a loan to pay off his tax liability. It should be noted that due to the low annual interest rate of 6% (0.5% per month or part thereof) it often happens that tax debtors try to repay their private debts while they have their tax debts deferred by the tax office. This form of cash management at the expense of the tax office is of course not desired.

Deferral

The tax debtor must not have caused the financial emergency himself. In the following cases, for example, a deferral would generally exist:

  • For health reasons, reserves that had been saved for the expected tax back payment were used up.
  • The tax office surprisingly cuts advertising costs , which leads to a back tax payment. A tax refund was expected.
  • After a tax audit there is a substantial back payment. There is no tax evasion .

In the following cases, deferral would normally be denied:

  • Cases of tax evasion
  • The assessment leads to a high tax back payment. Obviously, the income tax prepayments were set far too low due to incorrect information provided by the taxpayer.

Deferred interest

Interest is charged for the duration of a deferral ( Section 234 AO). If the tax assessment notice is canceled, changed or corrected in accordance with Section 129 AO after the deferral has expired, the interest accrued up to that point will remain unaffected (so-called target interest rate). Even an early repayment does not automatically lead to an adjustment of the fixed interest, application decree to the tax code (AEAO) to § 234 item 1 (section 172). Interest can be waived in whole or in part if it would be unreasonable to collect it in the individual case ( Section 234 (2) AO). As with other interest rates according to the tax code, the deferral interest is 0.5% of the rounded amount that can be divided by 50 per full month, § 238 and § 239 AO. Details on this can be found in the application decree for the tax code to § 234 AO (section 172).

Deferral period

A deferral can only be granted if the tax claim does not appear to be jeopardized (see § 222 sentence 1 AO) and the taxpayer is not in a better position than the normal taxpayer as a result of the deferral. Therefore, the tax administration usually only grants a deferral over a period of six months. This prevents the tax office from becoming a cheap lender.

Security deposits

As a rule, the deferral should only be granted against the provision of security , Section 222 sentence 2 AO. What is to be understood by a security deposit in the sense of the tax code is in § 241 to § 248 AO. These include B. Mortgages, land or pension debts, § 241 Paragraph 1 No. 5a AO.

However, security deposits are only usual for higher amounts.

Deferral of payment debts

If a third party has to pay the tax liability for the actual debtor (payment debtor), deferral may not be granted ( Section 222 sentence 3 AO). This particularly applies to:

VAT deferral

In principle, a sales tax payment can be deferred. However, it is common administrative practice not to do this. It is assumed that the entrepreneur withholds the sales tax from his sales only for the state. These funds are only to be transferred through this. They must therefore not be "misused" by the entrepreneur for their own purposes. It also doesn't matter if the entrepreneur z. B. is indebted. He has to pay the sales tax to the responsible tax office regardless of his financial situation.

An exception can be made if the sales tax liability has resulted from a tax audit and this could not be foreseen. This can be the case, for example, if a tax audit reveals that input tax amounts have been wrongly claimed because the incoming invoices do not meet the requirements of the Sales Tax Act, § 14 , § 15 UStG.

The application for deferral

The deferral should be requested before the tax liability becomes due. So usually as soon as a tax assessment is available, from which the tax liability results. In the case of a real deferral, the first deferral installment without interest should be transferred immediately and the deferral application submitted at the same time. By paying the first deferral installment, you counteract the impression that your tax claim is at risk. It is also advisable to coordinate the application for deferral in advance with the person responsible by telephone.

Start of the moratorium

The deferral is generally not granted retrospectively. If a tax liability is already due and the tax office only receives a deferral application afterwards, the deferral can be granted at the earliest with effect from the date on which the application is received (section 178 no. 6a AEAO 4th paragraph). Since late payment surcharges arise per commenced month of late payment, the application for deferral should therefore be submitted before the tax liability is due.

Consequences if the deferral is rejected

The tax authority decides on the application for deferral either by issuing a notice of deferral or by issuing a notice of rejection . If necessary, the applicant can appeal against both of them according to § 347 AO. If the application for deferral is rejected, the tax office grants a deferred payment of up to one week from the date of the rejection notice, section 178 no. 2, paragraph 6a AEAO.

Expiry clause and revocation of deferral

The Stpfl. can quickly deprive himself of the benefit of the deferral granted to him if he does not observe the repayment modalities (securities, evidence, adherence to the punctual installment payment and full payment of the respective installment) or if new tax arrears arise. In this case, a deferral can be revoked with effect for the future, Section 131 (2) AO. However, the tax office may also have added ancillary provisions to the deferral notice. It is possible to issue a notice of deferral under the condition that, in the event of late repayment, the notice of deferral is automatically revoked without a further notice, Section 120 AO. The tax office can also reserve the right to revoke the deferral in the event that a condition is not met. The possible types of ancillary provisions are diverse.

In these cases, the immediate start of enforcement measures threatens, since the tax debts are due and usually already z. B. has been requested in the context of a reminder, a notice of enforcement or a tax assessment and since then usually more than a week has passed, Section 254 (1) sentence 1 AO.

The suspension of execution (payment in installments)

If a deferral is refused, one can try to agree an installment payment with the competent enforcement agency in connection with a suspension of enforcement according to § 258 AO. The requirements are specified in Section 7 Enforcement Order (VollstrA). In legal terms, this is not an agreement, but a beneficial administrative act. Objections to the tax liability can not justify the postponement of enforcement because of Section 256 AO. Even if the tax code or the application decree to the tax code (AEAO) does not explicitly differentiate between deferral and payment in installments, this is referred to in practice as payment in installments. In this case, the enforcement agency will not initiate any further enforcement measures. The result is a deferral. Initially, however, late payment surcharges of 1% according to § 240 AO per commenced month of late payment still apply. After the main debts have been repaid, half of the late payment surcharges incurred up to that point can be waived upon application (Section 178 No. 5d AEAO). The application for remission can be submitted together with the application for payment in installments.

Postponement of recovery

According to § 297 AO, the use of seized property can be temporarily waived.

See also

literature

  • Carsten Farr: Enforcement protection, deferral and remission . Schmidt, Berlin 2008, ISBN 978-3-503-10696-7 .
  • Carl Gerber: Deferral and remission of taxes. 5th edition. Boorberg 2006, ISBN 3-415-03547-6 .

Web links

Individual evidence

  1. ^ BFH judgment of June 12, 1996, Az. II R 71/94, BFH / NV 1996, 873.
  2. ↑ Lower Saxony Finance Court judgment of January 12, 1999 , Az. VII (III) 346/96.
  3. ↑ z. B. BFH judgment of March 19, 1981, Az. IV R 59/77.
  4. ↑ z. B. BFH judgment of July 2, 1986, Az.IR 39/83 (NV), BFH / NV 1987, 696.
  5. ↑ Article "The so-called expiry clause according to § 120 AO for deferral and postponement of enforcement - tax compliance and reduction of bureaucracy through dissolving conditions" - by Hermann Pump, published in DSTG "Die Steuer-Warte" issues September and October 2012