- The ECJ ruled that fixed default interest on overdue VAT does not breach EU law if it is not excessive.
- Default interest serves a compensatory, not punitive, purpose and is consistent with VAT system objectives.
- The Court distinguished default interest from administrative penalties, emphasizing their different purposes.
- Member States have discretion in setting VAT sanctions but must respect EU principles like proportionality and fiscal neutrality.
- The cumulative application of interest and penalties is not automatically disproportionate, as long as each measure is justified and not excessive.
Source: meridianglobalservices.com
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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