In its decision published on 18.08.2021, the German Federal Constitutional Court declared the interest rate of 6% p.a., pursuant to sections 233a and 238 of the German Fiscal Code, to be unconstitutional. This applies to interest periods from 01.01.2014 onwards. However, at the same time, the Federal Constitutional Court ordered that the unconstitutional provision can, nevertheless, continue to be applied to interest periods until the end of 2018. Only for interest periods dating from 01.01.2019 is the legislator obliged to pass a new (retroactive) regulation. This new regulation must be put in place by 31.07.2022. The Federal Constitutional Court has now ruled on interest concerning a trade tax claim. In the case of interest on VAT liabilities, doubts remain as to whether the interest rate and the assessment of interest in general are in accordance with EU law. Taxpayers could take advantage of these doubts as regards the past.
Source: kmlz.de
