BELGIUM: 9.6%/year
Late payment interest in Czech Republic 11,75% (8% plus repo rate).
In CZ late payment interest is calculated from the amount of the tax overdue. The rate is 8% plus the repo rate of the Czech National Bank effective on the first day of the calendar half-year when the default took place (repo rate as of 1 January 2022 is 3,75%). The interest arises from the fourth day after the due date until the tax was paid.
FRANCE: 2.4%/year
The late interests payment are 0,2% per month or 2,4% per year (Article 1727 of the French Tax code). In case of voluntary disclosure (good faith), it could lead to the application of a reduction of 50% of the rate of the late penalties (1,2% instead of 2,4% per year – article 1727,V of the FTC).
GERMANY: 1.8%/year (retroactively as of Jan 1, 2019)
The interest rate for interest pursuant to section 233a of the German Fiscal Code (AO) will be retroactively reduced for interest periods from January 1 2019 will be retroactively reduced to 0.15% per month (i.e., 1.8% per year) and thus adjusted to the constitutional requirements. The appropriateness of this interest rate is reviewed every three years, taking into account the development of the prime rate in accordance with section 247 of the with effect for subsequent interest periods every three years, for the first time on January 1, 2026. This takes account of the requirements of the BVerfG. The new provision ensures legal and planning certainty for citizens, companies and tax authorities and – as before – is simple to apply in practice. In the retroactive recalculation of interest, the protection of legitimate expectations is taken into account by applying Sec. 176 (1) No. 1 AO.
If you do not pay Value-Added Tax (VAT) on time, interest is charged on a daily basis from the date the payment is due until the amount outstanding is paid. Where a VAT refund has been overclaimed, you will have to pay interest on the overclaimed amount. Interest is payable from the date the overpayment was made to you. The rate of interest is 0.0274% per day or part of a day.
Italy has published the Decree of 13 December 2021 from the Ministry of Economy and Finance in the Official Gazette, which sets the legal (statutory) interest rate at 1.25% (up from 0.01%) with effect from 1 January 2022. For tax purposes, the rate may be used in relation to the taxation of interest income as a presumed rate on loans if the rate has not been agreed to in writing.
NETHERLANDS: 4%, temporarily lowered to 0.01% with gradual increase for collection interest only
POLAND – Between 4 and 12.75%/year
On 14 February 2022, Poland published the Announcement of the Ministry of Finance on the rates of interest for tax arrears / late payment. This includes an increase in the interest rates as follows:
- The standard rate is increased from 8.0% to 8.5% per annum;
- The reduced rate is increased from 4.0% to 4.25% per annum; and
- The increased rate is increased from 12.0% to 12.75% per annum.
- Late payment interest of 0.02% of the overdue amount, per day; (7.3%/year)
- Late payment penalty of 0.01% of the overdue amount, per day. (3.65%/year). The late payment penalty is not applicable where the non-declaration penalty kicks in (see below).
A non-declaration penalty of 0.08% per day is applicable with regard to the principal tax liabilities which are not declared or are wrongfully declared, as established by the tax authorities. The non-declaration penalty is reduced by 75%, if the principal tax liability is paid within the time-limit provided by the tax assessment. Also, it is increased by 100%, if the non-declared amounts are derived from tax evasion activities.
The current late payment and repayment interest rates applied to the main taxes and duties that HMRC currently charges and pays interest on are:
- Late payment interest rate — 3.0% from 21 February 2022
- Repayment interest rate — 0.5% from 29 September 2009
NETHERLANDS – 4% (but temporary reduction of collection interest)
Tax interest is due if the wrong VAT amount has been reported (see here). Interest is however not levied, if you voluntarily correct the return within 3 months after the tax year. In other cases, rate of the tax interest is 4% (see here). This was temporarily reduced to 0,01% due to mitigate the effects of the coronavirus, but this ended per October 2020 (see here).
If you do not pay an assessment in time, collection interest is levied. This also applies if a delay of payment was granted. The period over which collection interest is due starts on the day after the payment due date and runs until the day on which the money is credited to the tax authorities’ account. To mitigate the effects of the coronavirus, the collection interest is lowered from March 23, 2020 to June 30, 2022 from 4% to 0.01%. From July 1, 2022, the collection interest is increased slowly: 1% from July 1, 2022, 2% from January 1, 2023, and then in 2 steps to 4% on January 1, 2024 (see here).
In case you have the applicable interest % plus eventual link to the authorities guidance, please send a message to [email protected].
