Opinion Statement ECJ-TF 3/2023 on Case C-322/22: Right to be paid interest on overpayment of taxes in breach of EU Law

The CFE ECJ Task Force has issued an Opinion Statement on the CJEU’s decision of 8 June 2023 in case C-322/22, E. v Dyrektor Izby Administracji Skarbowej we Wrocławiu, decided without an Opinion of the AG, concerning the right to be paid interest on overpayment of taxes in breach of EU Law. 

At issue was the admissibility of a Polish domestic rule that limited the right to the payment of interest on overpayments of corporate income tax in breach of EU law to the period running the thirtieth day following the publication, in the Official Journal of the European Union, of a ruling of the Court of Justice finding that the collection of a certain tax is incompatible with EU law. The Court of Justice considered that such limitation was not admissible by reference to the principles of sincere cooperation, equivalence, and effectiveness in connection with the EU right of individuals to receive interest when receiving a refund of an amount paid in breach of EU law.

The CFE ECJ Task Force welcomes the decision of the Court as it reinforces the taxpayers’ right to interest on refunds in cases where a tax is imposed in breach of EU law. The CFE ECJ Task Force acknowledges that the Court has limited competence to ensure the enforcement of EU law at this level. Therefore, additional action seems to be necessary to establish a common normative framework for the reimbursement of unduly paid taxes and its corresponding right to interest. Currently, there is a margin of discretion in the regulation by the Member States (in what concerns both the exercise of the rights and their content), which may lead to unwanted asymmetries in the levels of protection of the same EU rights in the different Member States. Such diversity is not welcomed in view of strengthening the internal market.

Cases such as the one at hand urge reflection on whether the EU institutions could start taking a different approach. This is particularly true in the case of the European Commission, which, as “guardian of the Treaties”, is responsible for ensuring that EU law is timely interpreted and applied. This includes extracting adequate conclusions from CJEU’s rulings. Several actions could be considered.

First, the EU Commission could engage in constructive dialogue with the Member States, actively asking whether they consider legislative action necessary to ensure full compliance with EU law in the aftermath of a Court case considering certain tax provisions as inadmissible.

Second, the EU Commission could lead the efforts in assessing whether further action (by that Member State or by any other Member State) is required to ensure compliance with EU law. This could be ensured with the following initiatives:

  • Public consultations, inviting all stakeholders to provide input on the amendments needed;
  • By public tenders, commissioning studies to expert organisations on the amendments needed;
  • By asking the EU tax observatory, financed by the European Commission, to include such assessments in their activities.

Third, the Commission could consider, as a priority, the assessment of domestic tax systems whenever the same provision or the same point of law is referred for the second time to the CJEU.

The CFE ECJ Task Force would welcome actions by EU institutions (and particularly by the EU Commission) towards ensuring effective protection of the right to interest on refunds in cases where a tax is imposed in breach of EU law. Such actions would not only be adequate but also needed and could include soft law (such as a Communication regarding the implementation of such rights in accordance with the case law) and/or hard law (namely, a directive laying down the adequate normative framework for the implementation of such rights).
We invite you to read the Opinion Statement and remain available for any queries you may have.

Download the Statement