Request for deferral of repayment of VST has been rejected.
July 26, 2011 | 20,00 EUR | answered by Dr. Yanqiong Bolik
Due to an incorrect booking, I received a VAT refund for the 4th quarter of the previous fiscal year that was too high. With the annual VAT declaration, a VAT liability of approximately 1.7 has now been determined. I have requested a payment plan, and the first installment has already been paid. There are only two more installments at the end of August and the end of October, each 0.5K. The tax office rejected the installment plan with the following reasoning: "The VAT system ensures competitiveness and cost neutrality in the business sector through the interaction of the tax liability of the performing entrepreneur and the simultaneous VAT deduction by the service recipient. VAT is therefore regularly excluded from the calculation. Therefore, there is no significant hardship in paying the amounts to the tax office within the meaning of § 222 AO 1977. This also applies if customers have been granted or implicitly granted payment deadlines." However, this represents a significant hardship for me, as the tax refund from the previous year of several thousand euros is delayed due to a change in jurisdiction, according to the tax office. If I simply lodge a complaint and request a suspension of enforcement, I could buy some time, continue paying the installments until the end of September, and then withdraw the complaint. I may be able to afford the small late fees. However, this solution is probably not the best one, hence my question to you as experts. What is the best course of action I can take to ensure the installment plan is realized in the end?
Dear inquirer,
Thank you for your request. Based on the information provided, I am happy to answer your inquiry within the scope of an initial consultation, taking into account your efforts and the rules of this platform. The opinion is based on the facts presented. Missing or incorrect information about the actual circumstances can affect the legal outcome.
- Tax authorities may, at their discretion (§ 5 AO), grant a deferral of VAT liability in whole or in part if enforcement at maturity would entail significant hardship for the debtor and the claim does not appear to be jeopardized by the deferral.
- Significant hardship exists when the immediate payment obligation would deprive the taxpayer of their economic existence (need for deferral).
- Furthermore, the taxpayer must not have caused the financial distress themselves (deserving of deferral). In these cases, deserving of deferral would generally be given, for example, if:
* amounts saved for the expected tax payment were used up due to health reasons.
* unexpectedly the tax office deducts business expenses, leading to a tax payment instead of the expected refund, or
* a substantial additional result is found during a tax audit, where there is no tax evasion...
- If the tax refund from the previous year is undisputed or has been legally established, you can also offset VAT debt under § 226 AO against the refund from the previous year.
I hope that this initial consultation and information provided according to your details have given you an overview of the situation, and I am available for further questions in a personal conversation.
Kind regards,
Dr. Yanqiong Bolik
Tax consultant
