Please feel free to contact KPMG’s tax advisers with any queries you may have.
We hope you are enjoying reading it!
Summary of Tartu Circuit Court judgment in administrative matter no. 3-19-1129 (11 February 2021)
The Circuit Court reviewed a situation where the Tax and Customs Board (TCB) had demanded that a convicted tax offender pay interest on his tax liabilities for a period when his financial assets were seized in the course of criminal proceedings to guarantee the payment of his tax liabilities. The appellant asked the TCB to withdraw the claim for the payment of interest, because this seemed unfair given the above mentioned circumstances.
The Circuit Court analysed the circumstances pertaining to the dropping of such claims on the basis of case law established by the Supreme Court. According to the latter, an injustice that has been caused by circumstances that could not have been under the control of the taxable person is a prerequisite for waiving tax arrears. If the existence of injustice cannot be ascertained, there are no extraordinary circumstances that warrant the withdrawing of any claims for accrued interest. The Circuit Court concluded that in this particular case the circumstances could not be considered extraordinary.
Still, the Circuit Court decided that the TCB’s interest claim had to be dropped, as the TCB partly failed to exercise its discretionary power, when the appellant contested the claim. The failure was so significant that it led to the violation of the rights of the appellant and to the cancellation of the respective discretionary decision made by the tax authority.
The court judgment is available here (in Estonian).
Further information: Tax Advisor Olga Lavrova, firstname.lastname@example.org