Tax claims - deferral

• Existence of significant hardship Significant hardship exists for factual reasons if the tax authority (Finanzbehörde) will, with near certainty, have to refund the amounts to be paid shortly afterwards, or if refund claims that will soon fall due can be used to settle outstanding tax debts. The applicant must provide conclusive evidence of these requirements, both as to grounds and amount. The tax authority will then generally defer (stunden) the amount owed until the future refund claim falls due (so-called Verrechnungsstundung, deferral by offsetting). Significant hardship can also exist for personal reasons, i.e. because of a taxpayer's unfavourable economic circumstances. Significant hardship for personal reasons requires both Stundungsbedürftigkeit (need for deferral) and Stundungswürdigkeit (eligibility for deferral): • Stundungsbedürftigkeit (need for deferral) exists if payment would lead to serious payment difficulties or would threaten the taxpayer's economic existence. Among other things, this requires that the taxpayer temporarily has neither the necessary funds nor the ability to obtain these funds in a reasonable way. • Stundungswürdigkeit (eligibility for deferral) exists only if the taxpayer did not bring about their own lack of financial capacity themselves and has not, through their conduct (e.g. breach of tax obligations), acted against the tax interests of the general public.

• Stundungsantrag (application for deferral) You can apply in writing for a deferral (Stundung) at the Finanzamt (tax office) responsible for you. As a rule, this is the Finanzamt that issued the notice for the additional payment or advance tax payment. For such an application, it is best to use the Elster portal. • Evidence for the deferral grounds cited Determined by the Finanzamt on a case-by-case basis. Evidence is expected regarding the deferral grounds cited (e.g. information on your current financial circumstances).

• Stundungsantrag (application for deferral of payment) www.elster.de/eportal/wizard/seq/steuerlichenachricht-1/eing

• None: for the application and the decision on the deferral (Stundung) • The deferral interest is 0.5 percent on the deferred amount for each full month. The interest rate is set either at the same time as the deferral is granted, or at a later date. The deferral interest becomes due with the last installment to be paid. • In exceptional cases, the deferral can also be granted interest-free. This decision is made by the competent tax authority (Finanzbehörde).

• Abgabenordnung (AO) [Fiscal Code] § 222 - Stundung (deferral) www.gesetze-im-internet.de/ao_1977/__222.html

• Tax claims service.berlin.de/dienstleistung/325411/

Responsibility for processing an application for a deferment (Stundungsantrag) lies with the locally responsible tax authority (§§ 17 ff. Abgabenordnung, Fiscal Code). This is usually the Finanzamt (tax office) that assessed the tax claim to be deferred.