CJEU judgment – Interest on overpayments
The Court of Justice of the European Union (hereinafter: CJEU) on 8 June 2023 issued a judgment (C-322/22) concerning the payment of interest on overpayments arising from a CJEU ruling declaring Polish tax legislation incompatible with European Union (hereinafter: EU) law.
The CJEU held that the Polish provisions are incompatible with EU law insofar as they:
- limit the accrual of interest only to 30 days from the publication of the CJEU judgment giving rise to the overpayment, if:
– the application for repayment of the overpayment was submitted after the lapse of 30 days from the publication of the judgment,
– the overpayment was made before the lapse of 30 days from the publication of the judgment, - refuse to pay interest on the overpayment if:
– the application for repayment of the overpayment was made more than 30 days after the judgment was published,
– the overpayment was made more than 30 days after the judgment was published.
This means that taxpayers can claim interest for the period from when the overpayment arose until it is refunded, regardless of when:
- a request for repayment of the overpayment was made,
- the overpayment was created.
Thus, in many cases, interest on overpayments may continue to accrue. This applies both to those who, following the CJEU judgments, did not apply for a refund of overpayments and those who did apply for such overpayments, but interest no longer accrues.
For example, taxpayers for whom VAT overpayment arose due to accounting in the past for importation of services and intra-Community acquisition of goods in a bifurcated formation (input tax and output tax recognised in different settlement periods) may apply for a refund of interest with interest. Polish provisions obliging such a method of accounting were challenged by the CJEU in its judgment of 18 March 2021. (C-895/19).