On 28 September 2026, the Austrian Federal Finance Court (BFG) delivered a pivotal ruling (case reference: 66bfa256-ec0b-4f61-9738-672f780a64c0) on the entitlement to interest on VAT refunds for periods preceding the national transposition of the EU interest obligation. The case involved a multinational group that had filed VAT refund claims for the years 2018‑2020. The tax authority refunded the principal amounts but refused to pay interest, arguing that § 205c BAO (which implements Article 271 of the VAT Directive) only entered into force on 1 January 2021. The BFG, following the European Court of Justice (ECJ) judgment in Case C‑105/19 (Köllensperger) and the principle of effective judicial protection, held that the right to interest arises directly from EU law and does not depend on national implementing legislation. The court ordered the tax authority to calculate and pay interest at the statutory rate (currently 2% above the base rate) for the entire delay period, starting from the date the refund claim was duly submitted until the actual refund. The decision is final and binding, and it opens the door for numerous taxpayers to claim retrospective interest on past VAT refund delays.
Key Takeaways
- EU Law Supremacy – Direct Effect of VAT Interest Right: The BFG confirmed that Article 271 VAT Directive grants taxpayers a directly effective right to interest on delayed refunds. National legislatures cannot curtail this right by delaying transposition. The court referenced the ECJ’s established case law (e.g., Cases C‑285/19, C‑286/19) that member states must ensure the full effectiveness of EU VAT rights, including compensation for the time value of money.
- Retroactive Claims – Significant Financial Exposure: Taxpayers can now claim interest for refund delays that occurred before 1 January 2021, potentially covering several years. For large corporate groups with substantial VAT credits, the aggregate interest could amount to millions of euros. The ruling also implies that the statute of limitations for such interest claims may be governed by EU principles rather than the shorter national limitation periods under § 210 BAO.
- Administrative and Budgetary Impact on Tax Authorities: The Austrian tax administration (Finanzverwaltung) must now systematically review all VAT refund cases from the past five to ten years, identify delays, and pay interest automatically or upon application. This creates a considerable administrative burden and may require supplementary budget allocations. Tax advisors should proactively audit their clients’ VAT refund histories and file protective claims where limitation periods are imminent.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement