Tax Judgment EP1 Tax Refund

Q : Is the taxpayer eligible for receiving the tax refund interests ?

A : According to the rules and conditions prescribed by the Ministerial Regulations, a taxpayer is eligible to receive interest on their tax refund calculated at the rate of 1% per month or part of the month from when it applies, based on the amount of their tax refund, subject to the conditions that such interest shall not exceed the amount of the tax refund and it must be paid out of tax collected under the Revenue Code.

Supreme Court Judgement No.2567/2560 Interest on the tax refund is calculated from the point of three months after a taxpayer files for their tax refund up to the date that appears on their tax refund notice. The documents submitted by the Plaintiff showed that he paid more VAT than was required by law. Therefore, the Defendant was required to refund the excess VAT payment along with interest thereon calculated at the rate of 1 percent per month or part of the month (for the applicable period), subject to the conditions that such interest shall not exceed the amount of the tax refund and provided that the refund shall comply with the rules and conditions prescribed by the Ministerial Regulations. The officer calling upon the plaintiff to submit the documents for inspection merely results in the charging of interest being suspended from the last day of the time of the order issued by the officer.

Supreme Court Judgement No.7848/2560 Failure to comply with the officer’s order by not submitting required documents or other relevant evidence results in the suspension of the interest accruing on the tax refund according to the ministerial regulations No.161 Clause 2. The Court noted that if a taxpayer fails to submit required documents within the time limit, then interest on the tax refund (if any) shall be suspended from the day that the officer issued the order until the day that the taxpayer complied with such order. In this case, the facts show that the summons required the Plaintiff to submit the required documents or evidence by the 10th of January 2005. Despite the Plaintiff’s letter dated 4th January 2005 whereby the officer was requested to make an inspection at the Plaintiff’s office, the date the officer examined the documents and evidence at the Plaintiff’s office must be regarded as the date the Plaintiff delivered the documents and evidence. Moreover, afterward, the case file showed the absence of the Plaintiff’s company being subject to an investigation affidavit (tor. 6). Thus, the evidence shows that the officer did not appear to request additional evidence from the Plaintiff. That being the case, the Defendant shall not be permitted to suspend applicable interest on the Plaintiff’s tax refund.