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Interest on back taxes and tax refunds at 6% per year from 2014 unconstitutional

In its decision of 8 July 2021, published on 18 August 2021 (see attachment), the Federal Constitutional Court ruled that interest on back taxes and tax refunds is unconstitutional insofar as the calculation of interest for interest periods from 1 January 2014 is based on an interest rate of 0.5% per month.

• The previous law continues to apply for interest periods up to and including 2018.
• However, the provisions are inapplicable for interest periods falling in 2019 and later.
• Due to the uniform regulatory concept of the legislator, the incompatibility of interest pursuant to section 233a AO is not limited to interest on arrears, but also includes interest on refunds for the benefit of taxpayers.

The legislature is obliged to adopt a constitutional new regulation by 31 July 2022.

If you have any further questions on this topic, please do not hesitate to contact us.

Björn Christian Gerow

Steuerberater

Fachberater IStR

+49-211-17257-0

b.c.gerow@egsz.de

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