Draft law proposes higher tax late-payment and refund interest rates from 2027
The essentials
The German federal government has submitted a draft Annual Tax Act 2026 containing several measures, including higher late-payment and refund interest.
The monthly rate, which has been 0.15% since 2019 and corresponds to an annual rate of 1.8%, is proposed to double to 0.3% per month from 2027, corresponding to 3.6% annually.
The draft also provides for generally unshortened child allowances for children resident in another EU or European Economic Area member state, electronic delivery of tax assessments and objection notices from 2027 for taxpayers with an ELSTER account, and expanded information exchange on income earned through online platforms, including providers based in third countries.
The German federal government has submitted a draft Annual Tax Act 2026 containing several measures, including higher late-payment and refund interest. The monthly rate, which has been 0.15% since 2019 and corresponds to an annual rate of 1.8%, is proposed to double to 0.3% per month from 2027, corresponding to 3.6% annually. The draft also provides for generally unshortened child allowances for children resident in another EU or European Economic Area member state, electronic delivery of tax assessments and objection notices from 2027 for taxpayers with an ELSTER account, and expanded information exchange on income earned through online platforms, including providers based in third countries.
What does this mean in practice?
The proposal would affect tax late-payment and refund interest, child-related tax allowances in cross-border cases, electronic tax correspondence, and reporting by online-platform providers. The draft also includes measures concerning foreign major shareholders and an increased exemption threshold for licence fees paid abroad.