A ruling by the Federal Constitutional Court may help Penzberg save millions.
It's about the interest that the city has to put on top of it when it has to pay taxes back to the Roche Group.
The court ruled that six percent interest is unconstitutional.
Penzberg - Whenever there was talk of the city's finances in Penzberg in recent years, the word "sword of Damocles" kept coming up.
What is meant by this is an impending tax return to the Roche Group.
A few years ago it was about 53 million euros.
Tax experts decided on some of them two years ago in a "mutual agreement procedure" between Germany and Switzerland.
At that time it was reportedly about 32 million euros in business tax from 2004 to 2011. Of this, the city had to reimburse around 18 million euros, as reported.
The decision on the remaining 21 million euros is still open.
This is trade and corporation tax from 2007 to 2015.
The amount of tax interest caused annoyance in Penzberger politics
In the past, the level of tax interest, which the city has to add on top of a possible repayment, has caused annoyance in the Penzberg politicians in the past.
The interest rate is six percent a year.
This amount was set decades ago by the federal government, which benefits from it even in the event of late tax payments.
The Federal Constitutional Court in Karlsruhe has now declared this six percent unconstitutional because of the ongoing low interest rate phase.
It ordered that the interest rate must be corrected, but only for the years from 2019. The legislature has until the end of July 2022 for this.
Reaction to Karlsruhe judgment - joy is clouded
This was precisely recorded in the Penzberg town hall. It is a “nice thing”, even if “not a big hit,” says city treasurer Hans Blank when asked. What tarnishes the joy is that the new regulation should only apply for the years from 2019. For the time before it remains at six percent interest. On the other hand, nobody knows what interest rate the federal government will set. Kämmerer Blank hopes that it will be halved to three percent.
That doesn't change the fact that the city of Penzberg will have to pay taxes back to Roche at some point.
That will "certainly not be a small chunk," said Blank.
He hopes that the next mutual agreement procedure will also result in a settlement and that Penzberg will only have to reimburse half of the amount in the end.
After all, the city would then no longer have to add six percent interest for the years from 2019.
Blank estimates that Penzberg could benefit from the Karlsruhe court ruling with an amount in the millions.
Calculation examples - how much can Penzberg possibly save through the judgment
The city treasurer does not give any figures, nor does he mention the name of the Roche company - because of tax secrecy. However, from previous discussions in the city council and from budget figures, one can roughly paint a picture of the amounts involved. In the German-Swiss “mutual agreement procedure”, a decision has to be made on corporation and trade tax from 2007 to 2015 about EUR 21 million. With a tax rate of six percent, an additional 1.26 million euros are due each year. In the past few years up to 2018, several million euros were raised. If you take the interest rate of three percent that the treasurer is hoping for, the amount would be halved to 630,000 euros, at least for the following years from 2019 - from then onwards the Karlsruhe ruling will apply. This means:For 2019 to 2021, a total of 1.89 million additional interest would be due instead of 3.78 million euros. These sums only apply if Penzberg has to repay the full tax. If there is a comparison and if Penzberg only has to pay back half of the tax, for example, the interest payments would also be halved.
Such calculation examples could be continued for the coming years.
The mountain of interest grows every year.
How long this is still the case depends on when a decision is made in the “mutual agreement procedure”.
When asked about it, city treasurer Blank can only shrug his shoulders.
In any case, he does not expect a decision anytime soon.
At least he had recently sketched a way in the city council how the city can cope with a refund.
She would have to take out a loan, for which she would have to pay interest at the bank (regardless of this, according to Blank, the city is already paying 0.5 percent penalty interest because it has parked money in anticipation of a repayment).
Two years later, however, according to him, she could expect a state allocation of needs.
They would also have to pay less district levy.
