Late payment penalties are constitutional despite low interest rates

Unlike various tax courts, the Federal Fiscal Court considers the late payment surcharges to be constitutional even in a low interest rate environment.

The Federal Fiscal Court is convinced that there are no constitutional objections to the amount of the late payment surcharge, even in the case of structurally low interest rates. Contrary to the decisions of various tax courts, which also attested to the partial interest character of the late payment surcharges, the Federal Fiscal Court considers the surcharges to be a means of pressure of its own kind, which primarily has a punitive function. Therefore, interest on arrears, deferral interest and late payment surcharges each cover completely separate situations that are not comparable with each other. Nevertheless, the last word has not yet been spoken, as proceedings on the constitutionality of late payment surcharges are also pending before another senate of the Federal Fiscal Court, which has not yet been decided and could still end up before the Federal Constitutional Court.