Austria: rules about refunds for an excessive amount of VAT

Refund of VAT. Pursuant to a recent finding by the European Court of Justice an entrepreneur who pays to the Tax Office an excessive amount of VAT not only has the right to claim the refund of the amount paid in excess but can also claim the payment of interest.

The European Court states that member countries are in principle obliged to refund taxes levied in violation of EU regulations. The taxpayer is therefore entitled to claim not only the refund of the excessive amount of the unfounded tax paid but also of the loss suffered due to the lacking availability to use the sums following the tax payment.

EU regulations impose on member States the restitution of taxes paid in excess, plus interest, but do not contain any hint as to how to put in practice the right to receive interest. However, the rules state that it is necessary to apply the most favourable interest method for the taxpayer.

Austrian law does not provide for any rules establishing the right to claim interests regarding excessive amounts of VAT paid. Following the sentence by the European Court of Justice, a rule for interest previously applied only to the income of legal and natural persons could be used which envisages the appreciation of the disadvantages suffered with regard to the liquidity of a taxpayer in case of advance payments that turn out to have been to high by applying the annual common market tax rate (standard tax rate plus 2%).

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