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BAO: Increase in deferral interest from 1 July 2024

Tax News - 24 May 2024 | 1 minute read

The temporary reduction in deferral interest to 2 % above the base rate due to the coronavirus pandemic expires on 30 June 2024.

If payment facilities (deferrals and instalment payments) are applied for and granted for tax debts in connection with federal taxes, deferral interest is charged in accordance with Section 212 (2) of the Federal Fiscal Code (BAO). The amount of deferral interest depends on the applicable base interest rate, whereby changes totalling less than 0.5 percentage points since the last change in the base interest rate are not taken into account. Deferral interest is not to be set (for federal taxes) if this does not reach the amount of EUR 50.00.


Increase from 01.07.2024

In view of the coronavirus pandemic, a “reduced” deferral interest rate of 2 percentage points above the base rate has applied since 1 February 2022 (Section 323c (13) BAO), but this will only apply until 30 June 2024. From 1 July 2024, the regular interest rate for payment deferrals of 4.5 above the base rate will apply again. As a result, the effective interest rate – based on the current base rate after adjustments have been made – will rise from 5.88 % to 8.38 %.

The increase in interest rates applies both to applications for deferral or payment by instalments submitted and approved before 1 July 2024 and to new applications, meaning that the higher interest rate will apply from 1 July 2024.