I cannot pay the tax back payment: deferral and installments

An unexpected tax back payment can strain your finances. But you do not necessarily have to pay it immediately in one sum: the tax office can defer the tax or grant installments if immediate payment would mean considerable hardship and the claim is not endangered.

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Your chances of getting your money back

The tax office can defer due taxes if collection would involve considerable hardship and the claim does not appear endangered (§ 222 AO). Payment by installments is a common form of deferral.

For the deferral, deferral interest may accrue. Nevertheless, an agreed installment is usually cheaper than late-payment surcharges and enforcement. You should submit the application early and well-founded.

What you should do now

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1. Submit the application
Apply to the tax office in writing for deferral or installments and justify the considerable hardship.
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2. Explain your situation
Describe your financial situation comprehensibly and propose a realistic installment amount.
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3. Plan for interest
Reckon with deferral interest; it is usually cheaper than late-payment surcharges for non-payment.
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4. Keep to the agreement
Keep to the agreed installments, otherwise the deferral can be revoked and enforced.

How to spot the scam

You simply leave the back payment open, then late-payment surcharges and enforcement threaten.
The application is not justified and is therefore rejected.
You propose an unrealistically low installment.

Frequently asked questions

Can I pay a tax back payment in installments?

Yes, the tax office can defer the tax or grant installments if immediate payment would be considerable hardship and the tax claim is not thereby endangered (§ 222 AO). You must apply for and justify the deferral.

Does the deferral cost anything?

As a rule, deferral interest accrues. However, this is usually cheaper than the late-payment surcharges that arise on non-payment, as well as than the consequences of enforcement. An agreed installment plan is therefore often the better way.

What if I do not keep to the installments?

Then the tax office can revoke the deferral and make the entire tax due, as well as enforce it. So keep to the agreed installments or apply in good time for an adjustment if your situation changes.

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General information for self-help, not legal advice (RDG). In case of a high loss or uncertainty: contact a consumer advice center or a lawyer.