Newsletter
INTEREST IS PAYABLE ON TAX REFUNDS
In previous interpretations of the Taxation Law, the Ministry of Finance (MOF) has always taken the view that where a taxpayer applies for a re-fund under Article 28 of the law of excess tax paid due to the incorrect application of law or to a computational error, no interest can be added to the refund because Article 28 does not provide for payment of interest. As for Article 38 Para-graph 2 of the law, which does provide for in-terest to be added to tax refunds, the MOF took the view that this only applied to cases where the taxpayer sought remedy through an administra-tive appeal or litigation.
Contrary to this somewhat unreasonable inter-pretation, an opinion issued by the MOF on 3 June 2000 now provides that where a taxpayer applies for a refund of overpaid tax under Article 28 of the law, and such a refund is approved by the tax collection authorities, it may be paid with interest calculated from the date when the tax-payer paid the tax.