Bundestag decides to lower interest rates for additional tax payments

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Bundesadler: Tax rates drop to normal

Photo: Britta Pedersen / dpa

In the case of tax arrears, the tax offices will in future charge a lower interest rate than before.

In response to a ruling by the Federal Constitutional Court, the Bundestag decided late on Thursday evening to reduce interest rates retroactively to January 1, 2019 from the current 6.0 to just 1.8 percent per year.

The interest rate from which taxpayers benefit in the event of a refund will also decrease to the same extent in the future.

However, after the Bundestag, the Bundesrat still has to approve the new regulation.

Tax interest is generally due if an additional payment or refund is delayed by more than 15 months.

Due to the ongoing phase of low interest rates, the Federal Constitutional Court last year declared the unusually high annual tax interest rate of 6.0 percent to be unconstitutional.

With the change in the law, many taxpayers who have had to pay back payments since 2019 should get part of the interest back.

Anyone who has already received a tax refund should not have to pay back the lavish interest afterwards.

According to the coalition, the new regulation should only take effect in future cases.

mik/dpa-AFX