Any taxes in breach of Union law shall bear interest from the date of payment

Recently, the Federal Fiscal Court (BFH – VII R 32/14) ruled that taxes levied on the basis of an invalidated Union regulation are subject to interest from the date of payment. In the event of a dispute, a German sugar producer may demand0.5 % interest per month from payment of its duties until they are reimbursed.

Interest claim follows directly from Union law

In its decision, the Federal Fiscal Court refers to the case law of the European Court of Justice (ECJ). The latter decided that, in the case of tax amounts levied in breach of Union law, a claim for reimbursement of the amounts levied plus interest arises directly from Union law. The interest on taxes levied in violation of EU law is to be attributed for the period during which the funds were not available Contrary to the German tax code, interest is therefore due not only from the filing of an action, but from their payment to the tax authorities.

Interest rate is determined by national law

All other side issues, such as interest rates and repayment modalities, are a matter for national law. However, the ECJ requires interest to be equivalent and effective, i.e. in particular it must not be such as to make it practically impossible to exercise the rights conferred by the Union’s legal order. In the view of the Federal Fiscal Court, these conditions are fulfilled by the interest rate regulated in the Fiscal Code. Thereafter, interest rates are generally 0.5% per month

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