German Federal Tax Court: Baker Tilly obtains another landmark ruling regarding interest on import duty refunds - procedural interest for unlawfully levied import VAT

  • 12/12/2023
  • Reading time 2 Minutes

On October 17, 2023, the Baker Tilly team (foreign trade and customs law) obtained a landmark ruling at the German Federal Tax Court regarding procedural interest for refunded import VAT.

In April 2016, the Hamburg Main Customs Office (“HZA”) levied additional import VAT on the plaintiff and defendant in the appeal, which related to import transactions from 2014. After this subsequent collection was declared unlawful in the fiscal court proceedings and reimbursed by the HZA, the plaintiff and defendant in the appeal applied for interest on refund amounts during legal proceedings (“procedural interest”) in accordance with Art. 236 AO (German General Tax Code). The HZA rejected the payment of procedural interest with reference to Art. 116 (6) UCC.

The German Federal Tax Court (“BFH”) confirms the first-instance decision and clarifies that Art. 241 UCC is applicable to all transactions where the customs debt was incurred before May 1, 2016. Contrary to the customs administration’s opinion, the action’s lis pendens is not relevant. Therefore, the claim to procedural interest in these cases cannot be precluded by Art. 116 UCC.

Following its success before the ECJ, the Baker Tilly team (foreign trade and customs law) was thus once again able to obtain a landmark decision on the issue of interest on refunds by the customs authorities. Baker Tilly lawyer Sven Pohl: “The BFH’s decision is not only correct in terms of content, it is also stringent, logical and very comprehensible. It is likely to be relevant for many other proceedings.”

Ruling leaves one question unanswered

The BFH does not comment on the question of whether procedural interest is also payable on customs debts incurred after May 1, 2016 in accordance with Art. 236 AO or whether this is precluded by Art. 116 (6) UCC, as this was not relevant to the decision in this case. In order to avoid further legal disputes, a reference by the BFH would have been desirable.

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Authors of this article

Sebastian Billig


Attorney-at-Law (Rechtsanwalt)

Sven Pohl


Attorney-at-Law (Rechtsanwalt)

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