Germany published the Second Law (Act) amending the Tax Code and the Introductory Law to the Tax Code in the Official Gazette on 21 July 2022. The law entered into force on 22 July. As previously reported, the law amends the per annum interest rate on back taxes and tax refunds, which was found unconstitutional by the Federal Constitutional Court in July 2021. The Court found that the interest incurred on back taxes and the interest paid for tax refunds pursuant to § 233a in conjunction with § 238(1) first sentence of the Fiscal Code (Abgabenordnung – AO) is unconstitutional insofar as the interest was fixed at 0.5% per month (6% per annum). Considering the Court’s decision, the law provides that the interest rate for interest due according to § 233a AO is reduced retrospectively to 0.15% per month (1.8% per annum) for periods from 1 January 2019.
Source Orbitax
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