Retroactive interest on incorrectly paid import duties

The FG Düsseldorf has put a question to the European Court of Justice, in which it asks whether claims for reimbursement of import duties paid too much will in future have to be subject to interest as soon as the duties have been paid. (FG Düsseldorf, 24.06.2015, 4 K 3268/14 Z)

The facts of the case are as follows: The plaintiff imported shoes from China and Vietnam. However, the ECJ subsequently annulled the anti-dumping regulation and the applicant was entitled to repayment of the anti-dumping duties wrongly imposed. In addition to this amount, it demanded interest of 8% above the base interest rate from the date of payment.

Current legal situation: No interest from payment – Is this contrary to EU law?

According to the previous legal situation, interest only had to be paid on a refund amount due to unlawfully levied import duties if the reimbursee brought an action before the tax court. In this case, however, interest was only charged on the amount for the period from the filing of the action.

However, this regulation has been shaken by Union law: We had already recently reported on a decision of the Federal Fiscal Court in a very similar question.

The Federal Fiscal Court had decided that the state is obliged to pay interest from the time of payment and independently of the effort of legal proceedings. However, the case decided by the Federal Fiscal Court concerned the illegal collection of production levies on sugar and not the relevant anti-dumping duties.

Entitlement to full interest due to the requirement of effectiveness under Union law

However, the two cases have a lot in common in principle. Here, too, the question is whether the strict German legal situation in the form of § 233 and 236 of the Tax Code is compatible with Union law. These regulations only provide for a very limited obligation for the state to pay interest, namely only if legal proceedings have been instituted for the reimbursement of incorrectly levied taxes and in this case only for the – often very short – period between the filing of an action and the date of payment.

In the view of the FG Düsseldorf, however, this is incompatible with the principle of effectiveness of Union law. The latter demands appropriate compensation for the person concerned in the event of levies levied in contravention of EU law. According to previous case-law of the European Court of Justice, this reasonable compensation also includes interest from the date of payment. This interest rate would no longer depend on the effort of legal proceedings, but would also have to be paid back voluntarily by the authority.

The forthcoming decision of the ECJ

The ECJ has not yet ruled on the issue. If he decided that the strict German rules were contrary to Union law, the strict interest rate rules would no longer apply and would be replaced by the interest rate obligation from the date of payment. The setting of the interest rate would continue to be left to the national legislator.

Lawyer Dr. Tristan Wegner

Your consultant

ABC-Straße 21
20354 Hamburg
T +49 (0) 40 / 36 96 15 0
F +49 (0) 40 / 36 96 15 15
E ow@owlaw.com