Polish provisions restricting the right to be granted interest on overpayments inconsistent with EU law

On 8 June 2023, the Court of Justice of the EU issued a judgment in case C-322/22, in which it stated that the provisions of the Tax Ordinance restricting taxpayers’ right to be granted interest on overpayments violate the fundamental principles of EU law. This means that taxpayers should be entitled to interests awarded on overpayments for the entire period of undue disposal of money by the tax authority, regardless of when a taxpayer submitted a request for a refund of overpayment.

The CJEU judgment concerned art. 78 (5) of the Polish Tax Ordinance. It regulates situations in which a tax overpayment arises as a result of the judgment of the CJEU (e.g., stating inconsistence of Polish regulations with EU law). In such a case – if a request for a refund of overpayment is not submitted within 30 days of the publication of the CJEU’s judgment in the Official Journal of the EU – interest on the overpayment is only due for the period starting from the date on which the overpayment arose until the expiry of that 30th day after the formal publication of the CJEU judgment. For the remaining period – until the date of tax refund by the tax authority – interest will not be due.

The CJEU found that the restriction set by the Polish provisions violates EU law. The CJEU held that the principles of efficiency and sincere cooperation preclude Polish legislation that prevents the recovery of full interest on an overpayment in the event of a request for an overpayment being submitted after the deadline specified in Art. 78 (5) of the Tax Ordinance.

Practical implications

This landmark judgment provides the possibility to apply for additional interest for all entities that submitted requests for a refund of overpayment resulting from the CJEU judgment and were not awarded full amount of interest (due to submission of the request after the lapse of 30-day deadline under the Tax Ordinance). The interpretation of the rules provided by the CJEU should also be taken into account in all future requests for overpayment submitted following the CJEU judgements. 

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