BFH Decision on Interest Rates Pre-2019: Implications for VAT Refunds and Payments

• The Federal Fiscal Court (BFH) made a decision on 1.3.2024 regarding the interest rate for tax assessments before 2019
• The Federal Constitutional Court (BVerfG) ruled on 8.7.2021 that the interest rate according to § 233a AO was unconstitutional from 2019 onwards
• The interest rate has been reduced from 6% p.a. to 1.8% due to legislative changes
• The BFH decision (BFH, Beschluss vom 1.3.2024 – V B 34/23 (AdV)) deals with the VAT interest on input tax for periods before 2019
• There are no serious doubts about the compatibility of §§ 233a, 238 Abs. 1 AO with EU law for interest periods until 31.12.2018, especially in cases where refund interest significantly exceeds payment interest due to timing differences in input tax deductions.

Source: datenbank.nwb.de

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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