Posted: 10 Jan. 2022 5 min. read

Administrative High Court: Payment of interest due to the late refund of VAT credits


Austrian tax law does not set out any interest rate regulation for VAT claims. The Austrian Federal Fiscal Code (BAO) only contains provisions regulating the payment of interest for certain tax types (eg income taxes) and for special cases (such as the reimbursement of wrongly collected/deferred taxes after a complaint). In the decision Ro 2017/15/0035, 30 June 2021, the Administrative High Court addressed the question whether interest has to be paid on VAT surpluses if they are not credited within a reasonable period of time.


The applicant submitted a VAT return in which he claimed a VAT surplus. The tax office set this surplus with a significantly lower amount. Then, the applicant submitted an appeal against this decision, which the was granted. As a result, the taxpayer applied for the payment of interest because the full surplus was credited after years of appeal proceedings. However, the tax office did not grant the request. The subsequent complaint was dismissed by the Tax Appeals Court on the grounds that no interest is payable due to the clear wording of § 205a BAO, which is why the taxpayer appealed to the Administrative High Court.

Decision of the court

The Administrative High Court referred to the ECJ the question of whether the taxpayer is entitled to receive interests on VAT claims being not credited within a reasonable period of time. The ECJ concluded that, although there is no specific EU provision directly applicable, there is indeed an obligation under EU law to pay interest on VAT claims, which is why national law must be interpreted in line with EU law. This obligation is mainly based on the principle of neutrality of the VAT system, which in this case requires that the late payment – which has a negative economic effect on the taxpayer – must be compensated by the payment of interest. However, the ECJ did not provide any information on the modalities of the calculation of interest. Following the preliminary ruling proceeding, the Administrative High Court ruled that national law does not set out an interest rule for such cases in line with EU law. Therefore, a conformity with EU law regarding the interest on VAT claims can only be achieved through an overall analogy of the respective provisions regarding interest payments. The Administrative High Court has not yet determined the exact method of the calculation of interest, whereby a calculation in accordance with sec 205 BAO would be the most efficient solution in order to establish a regulatory system for the payment of interest on VAT claims in line with EU law. However, it can be derived from the Administrative High Court-ruling that an interest rate of two percentage points above the base rate must be used for the interest rate on VAT claims.

Conclusion and recommendation

According to the ECJ, the payment of interest on VAT credits that were not refunded within a reasonable period of time is obligatory. Since the Austrian tax law does not know an explicit provision regulating the interest of VAT credits, it is necessary to set a legal framework by analogy. A calculation of interest in accordance with sec 205 BAO would be the most efficient solution in order to act in line with EU law. Therefore, if there is a long period between the expiry of a VAT period and the refund of the VAT surplus on the tax account or the determination of the VAT surplus within the annual VAT assessment, it is advisable for the taxpayer to apply for the payment of interest on the late refunded VAT credits at the tax office. 

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Anna Roth, LL.M., BSc.

Anna Roth, LL.M., BSc.

Assistant Steuerberatung | Deloitte Österreich

Anna Roth ist Berufsanwärterin in der Steuerberatung bei Deloitte Wien. Ihre Tätigkeitsschwerpunkte liegen im Abgabenverfahrensrecht und Rechtsmittelverfahren. 

Mag. Robert Rzeszut

Mag. Robert Rzeszut

Partner Steuerberatung | Deloitte Österreich

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.