Resumen de Default interest in the event of late payment of taxes
In this article, the author comments on the proportionality requirement in relation to default interest applied when a tax debt is not (timely) paid, and on interest issues in case of cross-border tax recovery and international consultations in tax disputes. Default interest has both a compensatory function and a punitive nature. The distinction between both aspects means that account must be taken of the specific circumstances of each individual situation in which default interest is applied. International recovery assistance should ensure transparency regarding the default interest applied. Moreover, it is important that the combined application of default interest and administrative penalties in the applicant state and the requested state does not lead to a disproportionate effect on the tax debtor. In respect of mutual agreement procedures to resolve double taxation, it is noted that legislation should take greater account of the default interest imposed on the tax debtor.
