Interest payable following delayed reimbursement of a VAT credit

Summary

The Montreuil Administrative Court judgment No. 2311560 reportedly required the French State to pay interest following the delayed reimbursement of a EUR 30,000 VAT credit after the tax authority had initially rejected the taxpayer’s claim. [doctrine.fr]
The later repayment was treated as contentious tax relief falling within Article L.208 of the French Tax Procedures Code. Because the VAT credit did not arise from a prior tax payment, interest ran from the date on which the reimbursement claim disclosed the refundable credit.
Tax teams should review successful VAT refund disputes to confirm that statutory interest has been included. The judgment is particularly relevant where the administration first rejects a claim but subsequently accepts it during the administrative or judicial phase.

Article

In a judgment dated 16 June 2026, the Montreuil Administrative Court addressed the entitlement to interest following the delayed repayment of a VAT credit.

Eco Energy System, a business engaged in purchasing, reselling and installing solar panels, requested reimbursement of a EUR 30,000 VAT credit for January 2022. The tax authority initially rejected the request but later granted the refund on 15 March 2023.

The company subsequently sought interest on the refunded amount. The tax authority rejected that claim, leading the taxpayer to bring proceedings.

The court treated the refund as contentious relief because it was granted after the administration’s initial rejection of the taxpayer’s claim. Article L.208 of the French Tax Procedures Code provides for interest where the State grants tax relief following a claim or court decision. The rate corresponds to the late-payment interest rate under Article 1727 of the French Tax Code.

An important question concerned the starting date. A VAT credit resulting from deductible VAT exceeding output VAT is not necessarily linked to an earlier cash payment of tax by the taxpayer. The court therefore did not use a prior payment date. Instead, it calculated interest from 24 February 2022, the date of the reimbursement claim establishing the refundable balance, until 15 March 2023, when the refund was made. [doctrine.fr]

The judgment has practical cash-management implications. Interest may be material where high-value VAT refunds are delayed for long periods, particularly in capital-intensive businesses, start-up operations, renewable-energy projects and businesses with structurally refundable positions.

When a refund is granted after an initial refusal, tax teams should verify the legal character of the repayment, identify the relevant claim date and check whether interest was calculated automatically. Files should preserve the original refund submission, acknowledgement, rejection, correspondence, revised decision and date on which funds were received.

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