- Interest on VAT arrears is generally lawful if the taxpayer benefited from liquidity advantages.
- The interest is not considered unreasonable just because the supplier’s VAT liability is offset by the recipient’s input tax deduction.
- Normally, only the relationship between the taxpayer and the tax office matters for interest calculation.
- Exceptions may apply if both parties are jointly mistaken about who owes the tax, in which case the overall liquidity of all involved may be considered.
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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