The German Constitutional Court (Court) has passed a historical ruling that statutory interest of 6 % p.a. incorporated in tax law has not been in line with the principles of equality and proportionality from as early as 1 January 2014. The main reason for the non-conformity of statutory interest is changes in the capital market which led to a historically low return on capital since the post-war Europe. In light of this the legislator has no legal grounds to charge private individuals a significantly higher rate for the use of capital than that charged in the market.
In order to understand the circumstances under which the Court made the ruling, as well as whether the conclusions expressed in the ruling could have implications for the statutory interest used in the Latvian legal system, in the November edition of magazine Jurista Vārds Ronalds Vītols, Senior Associate in KPMG Law, and dr.iur. Māris Onževs discussed both the ruling and the legal framework of Germany and Latvia.
Link to the article in electronic format: https://juristavards.lv/doc/279927-vai-likumiskie-procenti-6-apmera-ir-attalinati-no-realitates-vacijas-konstitucionalas-tiesas-prakse/