Though interests rates have plummeted since the financial crisis, the German tax office has continued to add levies to tax repayments at the rate originally set in 1961. In its ruling on Wednesday morning, the court in Karlsruhe – which decides on matters related to the German constitution – declared the six-percent interest rates “unlawful”. At that time, however, the interest rate was “still in the right proportions,” to the wider economic context, it said. READ ALSO: EXPLAINED: How Germany’s ‘small business’ rule could affect your tax returnsIn 2018, the Federal Fiscal Court had also questioned the constitutionality of the high interest rates. Because of these decisions and the unclear legal situation, the tax offices have only made provisional interest assessments on tax returns since May 2019.

Source: The Local August 18, 2021 10:52 UTC