How can you contest a late fee?

Your tax return must be submitted to the tax office on time.

For taxpayers without professional advice, the deadline is usually 31 July of the following year. With tax advice, the deadline is extended.

→ If the return is submitted late, a late filing penalty may be imposed.

When can you contest it?

There are two types of late filing penalties:

1. Discretionary penalty by the tax office

In many cases, the tax office decides whether to impose a penalty.

A penalty can be avoided or reduced if:

• the delay can be plausibly explained (e.g. illness)
• the submission is only slightly late
• no or only small amounts of tax are owed

→ The tax office must take all circumstances into account.

Important: If discretion was not exercised correctly, you can lodge an appeal.

2. Statutory penalty

After certain deadlines, the late filing penalty is automatically imposed.

It amounts to:

• 0.25% of the assessed tax for each month of delay
• at least 25 Euro per month

→ In these cases, a waiver is only possible to a limited extent.

In the case of a tax refund or 0 Euro tax, the tax office can waive the penalty (§ 152 AO).

Special case: Complicated or unclear legal situation

In individual cases, a late filing penalty may be inadmissible if the tax situation was particularly unclear or legally complex (Finance Court of Saxony-Anhalt, judgement of 22.02.2024, 2 K 628/22). 

This may apply if, for example:

• the legal situation was complex or unclear
• even experts have different opinions
• a decision is only made by the courts

→ In such cases, it may be unreasonable to impose a late filing penalty.

→ Courts have ruled that the tax office must consider such circumstances.

Example

• A penalty may be imposed in the case of additional payments.
• In the case of a refund, the penalty may be waived – but not necessarily.
• In the case of an unclear legal situation, a penalty may be inadmissible.

What can you do?

• Apply for an extension if you cannot meet the deadline.
• Submit a justification if the delay is excusable.
• Point out a complicated or unclear legal situation.
• Lodge an appeal if you consider the penalty to be unjustified.

→ A good justification significantly increases the chances of success.

In summary

• Late filing penalties arise if the submission is late.
• In some cases, the tax office decides at its discretion.
• In certain cases, the penalty is statutory.
• In the case of an unclear legal situation, a penalty may be inadmissible.
• You can lodge an appeal against a penalty.