Late-filing penalties and the corona crisis

Background to the rule of 152 AO

Section 152(1) sentence 1 AO states that whoever does not fulfil their obligation to file a tax return on time or at all may be charged by way of a discretionary decision.  A late-filing penalty may be waived if the delay is excusable, with the fault of a representative of the taxpayer being attributed to them. 

Notwithstanding section 152(1) AO, a late-filing penalty must be charged under section 152(2) AO by way of a fixed decision if the tax return referring to a calendar year is not filed on time (section 152(2) no. 1 AO).

Owing to the corona pandemic, the deadlines for filing tax returns compiled by an adviser (section 149(3) AO) were extended by statute for the tax years 2019 to 2024. The extension was made under Art. 97 section 36 of the Introductory Act to the Fiscal Code (EGAO). These deadlines were also adjusted accordingly for the late-filing penalties for 2020 to 2024 under Art. 97 section 36(3) no. 5 EGAO (with the exception of the calendar year 2019, section 152(2) AO continues to refer to 2019 as “14 months from the end of the calendar year”. But according to the Federal Fiscal Court the adjustment also applies to the calendar year 2019). 

Section 152(3) AO governs exceptions to fixed decisions under section 152(2) AO. If the conditions of section 152(3) AO are met, the late-filing penalty is set in accordance with section 152(1) AO (discretion). Thus, under section 152(3) no. 1 AO a deadline extension under section 109 AO (including retrospectively) excludes the application of section 152(2) AO.  

Federal Fiscal Court judgement of 30/07/2025 (X R 7/23)

In the case decided by the Federal Fiscal Court, the claimant’s tax adviser submitted the trade tax return for the year in contention, 2019, to be submitted by 31 August 2021, on 28 December 2021. He did not apply for an extension either before or on filing the tax return. No grounds excusing the delay were given.  

The tax office then charged a late-filing penalty under section 152(2) AO, against which the claimant appealed and took legal action without success. The grounds he gave were that the tax office was wrong to assume that charging the late-filing penalty under section 152(2) AO was compulsory; rather, it was a case of section 152(3) no. 1 AO (a discretionary decision), because the deadlines for those taking tax advice had been extended. 

He also referred to the “Corona” FAQs published by the tax authorities (14 December 2021 II no. 7).  These say: “Are late-filing penalties incurred if a tax return is filed late? The tax office responsible will examine on a case-by-case basis, taking into account the current situation of the corona crisis, whether a late-filing penalty can be waived when a tax return is submitted late.”  

He continued that it can be seen from the wording of this FAQ that in these cases the tax offices would be entitled to exercise their discretion under section 152(1) AO. 

The Federal Fiscal Court’s decision

The Federal Fiscal Court rejected the appeal as being unfounded. The court basically had to clarify whether the statutory extension of the deadlines due to the corona pandemic for the tax year 2019 is to be understood as a deadline extension by a tax authority as defined by section 152(3) no. 1 AO, which would mean that the tax office would have discretion in charging the late-filing penalty under section 152(3) in conjunction with 152(1) AO. The question also needed to be clarified whether the claimant could derive a claim to a discretionary decision from the Federal Ministry of Finance’s FAQs on “Corona” (taxes) of 14 December 2021. 

In the case in question, the Federal Fiscal Court assumed a fixed decision under section 152(2) AO. It held that an exception under section 152(3) no. 1 AO was excluded because the conditions were not met. This would require a tax authority (section 6(2) AO) to have extended the deadline for filing the tax return under section 109 AO. But in the case of the extension of deadlines due to the pandemic, it was the legislature that extended the deadlines. The 10th senate of the Federal Fiscal Court consequently held that the general extension made by the legislature did not constitute an individual extension by a tax authority in accordance with section 109 AO (contra Schleswig-Holstein Fiscal Court judgement of 15/12/2023, 3 K 88/22, appeal pending at the Federal Fiscal Court under VI R 2/24).   

No claim to a discretionary decision from the FAQs on “Corona” (taxes)

The Federal Fiscal Court was not able to derive a claim to a discretionary decision from the FAQs on “Corona” (taxes) either. The court considered that unlike administrative rules, FAQs (“frequently asked questions”) are typically addressed to the general public and therefore do not bind the tax authorities. In the court’s view, in the case in dispute the Federal Ministry of Finance, the issuing authority, did not intend to make a binding rule. The Federal Ministry for Finance clearly expressed in no. 1 of the FAQs on “Corona” (taxes) that it did not intend to make a binding rule when it explained that in individual cases tax offices, municipalities and other contacts are responsible for individual decisions. 

No claim to a discretionary decision from the principle of public authorities to act consistently

The Federal Fiscal Court also considered that the principle of public authorities to act consistently was not able to provide the claimant with a claim to a discretionary decision concerning the late-filing penalty either. This is because the consistency of public authorities’ actions is limited; a lawful administrative practice can only establish consistency owing to the precedence of the law in question. For the case in dispute this means: For certain delayed filings, section 152(2) AO lays down a compulsory late-filing penalty. If these conditions are met, this binding decision cannot be replaced by a discretionary decision.

The claimant was not able to derive a claim to a discretionary decision from the perspective of the principle of public authorities to act consistently from the answer in part II.7 of the FAQs on “Corona” (taxes) of 14 December 2021 either, because the statement in it, that the responsible tax office will examine individually whether the late-filing penalty can be waived, is an unlawful statement, which is also not able to justify the principle that the public authorities act consistently. 

No claim to a discretionary decision from the principle of legitimate expectation

Finally, the Federal Fiscal Court did not consider that a claim to setting the late-filing penalty by discretionary decision as arising from the perspective of legitimate expectation (Art. 20(3) Basic Law [GG]) because the FAQs on “Corona” (taxes) that the claimant was appealing to were published on 14 December 2021. At this date the filing deadline for the disputed trade tax return had expired by more than three months. 

Practical advice

Providing information in FAQs has become a common practice. The Federal Fiscal Court’s judgement on the legal character of FAQs therefore has significance beyond this case (such as in applying for corona aid). The administrative courts, too, have already decided in this regard that a claim for aid does not exist if the administrative practice applying the FAQs breaks European law. 

The legal question clarified by the 10th senate in its judgement on 30 July 2025 whether the statutorily extended deadlines during the corona pandemic are a deadline extension within the meaning of section 152(3) no. 1 AO is currently pending at the Federal Fiscal Court under file refs. VI R 2/24 and VIII R 28/23. Appeal proceedings can be kept open by making reference to these cases. We’ll be glad to advise you on this. Talk to us!