Treasury interest - how to avoid them?

Treasury interest is a consequence of untimely fulfillment of tax obligations. The legal act containing provisions on this subject is the Regulation of the Minister of Finance of August 22, 2005 on the calculation of interest for late payment and the prolongation fee, as well as the scope of information that must be included in the accounts

When is tax interest charged?

Treasury interest - under certain conditions - may be charged by:

• taxpayer,
• payer,
• collector,
• a legal successor or a third party responsible for tax arrears.

Treasury interest is calculated from the day that follows the date of expiry of the due date or the date on which the payer is obliged to pay the tax to the tax account. Charging tax interest may be interrupted or terminated by:

• making the overdue payment together with the tax interest due to the account of the competent tax office,
• payment of tax to a person entitled to collect taxes,
• making a set-off,
• payment by the taxpayer of unduly received reimbursement along with the interest received or crediting them towards future tax arrears,
• submitting an application for deferment or spreading the payment of tax arrears into installments - tax interest is calculated by the date of submission of the above-mentioned application, including this date,
• filing an application for remission of penalty interest - fiscal interest is calculated by the date of submission of the above-mentioned application, including this date,
• submission of a tax return on unpaid advance payments for income tax in whole or in part,
• reaching the limitation period for the tax return from which the tax interest resulted.

Example 1.

On 30/01/2014, the taxpayer submitted an application for deferment of payment of tax arrears. The accrual of interest ceased on January 31, 2014.

Treasury interest - resuming accrual

There are situations in which the Tax Office redeems accrued treasury interest. However, while the tax debts are still outstanding, the tax authorities will charge the tax interest again from the date following the submission of the application for the previously granted remission. Therefore, it seems a good solution for taxpayers who pay the tax amount without tax interest to the tax office (because, for example, they were not able to calculate it or did not know that they were mandatory) - they can also apply for their remission. Settlement of the liability after filing an application for remission of treasury interest will have the same effects.

Treasury interest - when is it not charged?

Art. 54 par. 1 point 5 of the Tax Ordinance states that fiscal interest is not charged when its amount does not exceed three times the additional fee charged by Poczta Polska for a registered mail. According to the price list in force from February 2014, the fee is PLN 2.90 - therefore the interest that will not have to be paid may not exceed the amount of PLN 8.70.

The aforementioned provision also includes other situations which exempt from charging fiscal interest. The interest is not charged:

• for the period of the security, on the secured amount of the liability, if the secured funds, including the amounts obtained from the sale of the items or rights covered by the security, have been set off against tax arrears,
• for the period from the day following the expiry of the period referred to in Art. 227 par. 1 of the Tax Code, until the appeal body receives the appeal,

• for the period from the day following the expiry of the period referred to in Art. 139 par. 3, until the date of delivery of the decision of the appeal body, if the decision of the appeal body has not been issued within the time limit referred to in Art. 139 par. 3 of the Tax Code,
• for the period from the date of initiation of tax proceedings to the date of delivery of the decision of the first instance authority, if the decision was not delivered within 3 months from the date of initiation of the proceedings,
• for the period from the day following the lapse of two years from the date of submitting the declaration, for arrears related to accounting errors or obvious errors made in the declaration, if they were not disclosed by the tax authority during this period.