In principle, Austrian tax law does not provide for general provisions on the interest on tax credits from VAT. Although the Federal Tax Code generally regulates the interest on tax credits or payables (Sec 205 of the Austrian federal tax code “BAO”) in case of delayed assessments, its scope is limited to income tax and corporate income tax. In a recent judgment, the ECJ (May 12, 2021, C-844/19, Rs INSS) clarified whether Member States have an obligation under EU law to credit interest on late.
The regulation of input tax deduction and thus also of VAT reimbursements is intended to relieve the entrepreneur of the VAT owed within the course of its business. The aim is to ensure the neutrality of the tax burden in the common VAT system throughout the Union. It can therefore be derived that the refund of VAT amounts must be made under reasonable conditions and therefore also within a reasonable period of time. The payment of interest on late payment constitutes compensation for the financial loss suffered by the taxable person. Although Austrian tax law does not have any such legislation for VAT, the direct applicability of EU law nevertheless requires such a right to be granted. The Austrian Supreme Administrative Court (“VwGH”) will subsequently have to clarify how the right under EU law to an interest on VAT credits can be guaranteed.
The interest on tax credits pursuant to Sec 205 BAO is a regulation that is partly contrary to EU law, which is why in our view taxpayers can base their claim for interest on VAT credits directly on EU law. Consequently, national law is superseded insofar as it is contrary to EU law. As a result, the application of the interest on claims is not limited to taxes on income, but also has to include taxes on VAT.
If higher VAT amounts were credited delayed (a few months after October 1st of the following year) for example due to an appeal or a delayed annual VAT assessment, you may benefit from VAT interest. Depending on the amount of the credit and the period of time it took for an assessment of a VAT credit, this may result in considerable amounts of interest. Our Deloitte-advisors will be more than happy to assist you with the further procedure regarding interests on these VAT amounts.
Mag. Robert Rzeszut ist Partner im Bereich Steuerberatung/Tax Litigation bei Deloitte Österreich in Wien. Als Steuerberater betreut er sowohl große nationale und international tätige Unternehmensgruppen als auch Familienunternehmen und Privatpersonen. Er ist Experte für Abgaben-Verfahrensrecht und führt insbesondere komplizierte und umfangreiche Beschwerden und Revisionen an die Verwaltungsgerichte, an Höchstgerichte sowie internationale Verständigungsverfahren. Als zertifizierter Finanzstrafrechtsexperte ist er überdies auf Selbstanzeigen und finanzstrafrechtliche Verteidigung spezialisiert.