According to a ruling by the Münster Finance Court on October 26, 2022, no back interest is due on tax claims deferred interest-free during Corona (Case No.: 13 K 1920/21).
Corona posed enormous financial challenges for many businesses and the self-employed. To support them, the Federal Ministry of Finance during the pandemic allowed tax claims to be deferred interest-free under certain conditions, explains the law firm MTR Legal Rechtsanwälte, whose lawyers also advise on legal issues related to Corona.
The Münster Finance Court has now ruled that back interest must be waived if there was a claim for interest-free deferral of tax payment. In the case in question, the tax office assessed the corporation tax for 2018 against an association in May 2020. Since the association had to pay additional amounts, the tax office also set back interest. According to a letter from the Federal Ministry of Finance dated March 19, 2020, on “Tax measures to consider the effects of the Corona virus,” the association applied for the interest-free deferral of all payment claims from the 2018 corporation tax assessment.
Although the tax office granted the interest-free deferral of the tax claim, it refused to waive the back interest. The association opposed this, arguing that the interest would not have arisen if the tax office had issued the corporation tax assessment before April 1, 2020.
The claim was successful at the Münster Finance Court. The back interest must be waived, according to the court. It justified its decision by stating that the assessment of back interest was materially unreasonable. Due to the delayed tax assessment, the claimant did not gain any liquidity advantage, nor did the tax office suffer any liquidity disadvantage. In principle, the tax assessment carried out in May 2020 could indeed trigger a liquidity advantage that the tax office wanted to capitalize on. However, as the claimant indisputably had a right to the interest-free deferral of the corporation tax repayment through the BMF letter from March 2019, it is unclear where an additional liquidity advantage from the delayed tax assessment could lie, according to the court, which allowed the appeal to the Federal Finance Court.
Even though the Corona situation has eased, legal questions remain. The lawyers of MTR Legal advise on legal issues related to Corona.
