In times of low interest rate policy and low yields, it is precisely the duty with high interest rates that stands out in reimbursement amounts. We have already reported that the European Court of Justice (ECJ) has declared itself in favour of paying interest on unlawfully levied import duties from the time of payment. Now the Düsseldorf Finance Court (4 K 3268/14 Z) has ruled that the interest rate is 6% per annum according to the German Tax Code. Companies should consider whether they can file an application for payment of interest before a possible statute of limitations.
Interest on unjustified import duties
In the case, which had to be decided by the Düsseldorf Finance Court, the plaintiff initially successfully enforced the reimbursement of the import duties paid in excess. The import duties were refunded after the ECJ partially annulled Regulation 1472/2006. Subsequently, the applicant applied to the main customs office for interest to be paid on the refund amount.
The Finance Court of Düsseldorf, which is responsible for the action, referred the question of whether there is an interest claim to the European Court of Justice by way of a preliminary ruling procedure. The ECJ argued in favour of an unwritten interest claim under European law in these cases. The ECJ has not set any specific interest rates. The conditions for the payment of interest, in particular the interest rate and the method of calculation, should comply with the principles of equivalence and effectiveness, i.e. they should not be less favourable than for similar actions based on provisions of national law. Furthermore, they should not be such that the exercise of the rights conferred by the Union’s legal order would be practically impossible.
6 % interest according to the German tax code
After the judgment of the European Court of Justice was delivered, the defendant’s main customs office and the plaintiff disputed on the standards to be used to determine the level of interest. Among other things, the main customs office referred to a regulation of the Union Customs Code (UCC) which applies to payment facilities. The only interest to be paid on its main refinancing operations is one percentage point above the lending rate of the European Central Bank. The Düsseldorf Finance Court clearly rejected this.
As there was no regulation under European law on the amount of interest, it had to be determined in accordance with the legal systems of the Member States. The German Fiscal Code applies to all taxes and interest regulated by German law or European Union law. Since this also included customs duties, the amount of interest and the method of calculation of § 238 of the Tax Code had to be determined. Accordingly, the interest rate is one and a half percent for each month. This means that interest of 6% is charged annually.
Further development remains to be seen
It remains to be seen whether other courts will follow the opinion of the Düsseldorf tax court. It should also be noted that the decision of the Düsseldorf Finance Court was in principle in favour of the old Customs Code. A transferability of these principles to the UZK is at least advocated in the technical literature.
Nevertheless, companies should apply for interest now in order to avoid a possible statute of limitations.
O&W Attorneys at Law check whether an interest application should be filed in your specific case. Ask us now your questions about the reimbursement of duties and their interest.