In its judgment of 8 June 2023, the Court of Justice of the European Union (CJEU) held that national legislation which temporarily limits the period for accrual of interest on the undue payment due to the taxpayer, because the tax which gave rise to that payment is considered to be contrary to EU law, infringes EU law. In this case, the CJEU holds that the principle of effectiveness, in conjunction with the principle of sincere cooperation, must be interpreted as precluding national legislation which sets a limit of 30 days from the publication in the Official Journal of the European Union of the judgment of the CJEU declaring the tax to be contrary to EU law, as the maximum period for the accrual of interest on the undue payment due to the taxpayer in question. This regulation may even go so far as to exclude any type of interest in the event that the taxpayer has paid the undue payment after the thirtieth day following the publication of the judgment.
The Court of Justice has held that the rights to reimbursement of the undue payment and to receive interest, conferred by European Union law on taxpayers, represent the expression of a general principle. That principle is not limited to certain infringements of that law, nor is it excluded in the presence of others. These rights may be invoked not only when a national authority imposes on an individual the payment of a sum of money on the basis of an unlawful Union act, but also in other cases. For example, where the payment is required under national legislation contrary to a provision of primary or secondary Union law, or where a national authority imposes such a payment by incorrectly applying, in the context of Union law, a Union act or national legislation implementing or transposing such an act.
The right to receive interest on undue revenue compensates for the lack of access to the sum of money that the taxpayer has been unduly deprived of. In the absence of rules in Union law on requests for tax refunds to Member States and the collection of interest for late payment on taxes incorrectly collected, it is up to the domestic legislation of each Member State to regulate the conditions for the payment of such interest in cases of tax refunds in breach of Union law. However, this regulation must comply with two principles: the principle of equivalence, ensuring that it is no less favorable than similar domestic remedies, and the principle of effectiveness, avoiding making it practically impossible or excessively difficult to exercise the rights conferred by Union law.
Polish legislation limits the accrual of interest in order to avoid delays in claims for the refund of undue income. However, the principle of effectiveness and loyal cooperation conflicts with this regulation when the application is submitted more than thirty days after the publication of the CJEU judgment, limiting or excluding the interest due to the taxpayer.
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