Background: The late-payment interest that the tax office assesses on tax arrears has been 0.5% per month for over 35 years — a substantial 6% per year (which also applies to refund interest). Since reference interest rates have been considerably lower for years, currently closer to zero, a case is once again pending before the BFH that must decide whether significant interest claims by the tax office have been lawfully assessed. Have substantial interest charges been assessed against you as well? Then you should file an appeal against the assessment notice, citing the pending BFH proceedings IX R 31/13. We are happy to handle this for you.
Frequently asked questions
Frequently asked questions
How much interest does the tax office charge on back taxes?
Interest on back taxes under § 233a AO has remained unchanged for over 35 years at 0.5% per month, i.e. 6% per year. The same rate also applies to refund interest paid by the tax office to taxpayers.
Why is the 6% interest rate on back taxes legally contested?
Market-based reference interest rates have been significantly lower for years, in some cases near zero. As a result, a case is pending before the BFH that reviews the constitutionality and legality of the fixed interest rate of 6% p.a.
How can taxpayers challenge high interest charges on tax arrears?
Taxpayers should file an appeal against the interest assessment within the one-month appeal period. In the appeal, they should request a stay of proceedings, citing the pending case before the BFH, in order to benefit from a possible ruling in favor of taxpayers.
Which BFH case can be cited in the appeal?
In the appeal, reference can be made to the case pending before the Bundesfinanzhof (BFH) under file number IX R 31/13. That case addresses whether the interest rate of 6% per year on tax arrears remains lawful in light of the current low market interest rates.
Is an appeal only worthwhile for high interest amounts?
An appeal is particularly advisable when interest claims are substantial, as meaningful relief is possible in such cases. For smaller amounts, the effort may exceed the potential refund, so a case-by-case review is recommended.