Opinion of the Advocate General — ECLI:EU:C:2025:896
Date: 2025-11-13
Language of the case: Lithuanian

Translation C-544/24 – 1 
Case C-544/24 
Reference for a preliminary ruling 
Date lodged:  
12 August 2024  
Referring court:  
Mokestinių ginčų komisija prie Lietuvos Respublikos Vyriausybės 
(Lithuania) 
Date of the decision to refer:  
9 August 2024  
Applicant:  
BUAB Nekilnojamojo turto valdymas 
Defendant:  
Valstybinė mokesčių inspekcija prie Lietuvos Respublikos finansų 
ministerijos (Lithuania) 
  
MOKESTINIŲ GINČŲ KOMISIJA PRIE LIETUVOS RESPUBLIKOS 
VYRIAUSYBĖS (Tax Disputes Commission under the Government of the 
Republic of Lithuania) 
DECISION 
ON THE COMPLAINT BY BUAB NEKILNOJAMOJO TURTO 
VALDYMAS 
[9] August 2024 […] 
Vilnius 
The Tax Disputes Commission under the Government of the Republic of 
Lithuania (‘the Tax Disputes Commission’), […] [composition of the Tax 
Disputes Commission] has examined the complaint of BUAB Nekilnojamojo turto 
valdymas (‘the Applicant’, ‘the Company’) of 4 June 2024 against the decision of 
the State Tax Inspectorate under the Ministry of Finance of the Republic of 
Lithuania (‘the Inspectorate’, ‘the central tax administration’) of 13 May 2024 on 
EN 
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exemption from fines, late payment interest and/or interest […] (‘the Decision’, 
‘the contested Decision’). The representatives of the Applicant […] [names and 
surnames] and of the Inspectorate […] [names and surnames] […] attended 
the hearing of the Tax Disputes Commission held on 2 July 2024. 
The Tax Disputes Commission finds as follows: 
[…] [right to refer under Article 267 TFEU]. In its judgment of 21 October 2010 
in Nidera Handelscompagnie BV v Valstybinė mokesčių inspekcija (C-385/09, 
ECLI:EU:C:2010:627, paragraph 40), the Court of Justice of the European Union 
(‘CJEU’) concluded that the Tax Disputes Commission is a court or tribunal 
within the meaning of Article 234 of the Treaty establishing the European 
Community (and therefore also within the meaning of Article 267 TFEU). 
Legal framework 
EU law 
1 Article 273 of Council Directive 2006/112/EC of 28 November 2006 on the 
common system of value added tax (‘the VAT Directive’) provides that ‘Member 
States may impose other obligations which they deem necessary to ensure the 
correct collection of the value added tax (‘VAT’) and to prevent evasion, subject 
to the requirement of equal treatment as between domestic transactions and 
transactions carried out between Member States by taxable persons and provided 
that such obligations do not, in trade between Member States, give rise to 
formalities connected with the crossing of frontiers’. 
2 Article 4(1) of Protocol 7 to the European Convention for the Protection of 
Human Rights and Fundamental Freedoms (‘the Convention’) stipulates that no 
one shall be liable to be tried or punished again in criminal proceedings under the 
jurisdiction of the same State for an offence for which he has already been finally 
acquitted or convicted in accordance with the law and penal procedure of that 
State. 
3 Article 49 of the Charter of Fundamental Rights of the European Union (‘the 
Charter’), entitled ‘Principles of legality and proportionality of criminal offences 
and penalties’, provides in subparagraph 3 thereof that the severity of penalties 
must not be disproportionate to the criminal offence. 
4 Article 50 of the Charter, entitled ‘Right not to be tried or punished twice in 
criminal proceedings for the same criminal offence’, states that no one shall be 
liable to be tried or punished again in criminal proceedings for an offence for 
which he or she has already been finally acquitted or convicted within the Union 
in accordance with the law. 
NEKILNOJAMOJO TURTO VALDYMAS 
 
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National law 
5 The fifth paragraph of Article 31 of the Constitution of the Republic of Lithuania 
(‘the Constitution’) states that ‘no one may be punished twice for the same 
offence’. 
6 Article 7 of Lietuvos Respublikos Mokesčių Administravimo Įstatymas of 13 
April 2004, Nr. IX-2112 (the Law of the Republic of Lithuania on Tax 
Administration (‘the LTA’)), entitled ‘Principle of Equality of Taxpayers’, 
provides that ‘where tax laws are applied, all taxpayers shall enjoy the equality of 
treatment stemming from the conditions established by these laws’. 
7 Article 8(1) of the LTA, entitled ‘Principle of Fairness and Universal Obligation’, 
states that ‘each taxpayer must pay the taxes established by tax laws, acting in 
accordance with the procedure for calculation and payment of taxes laid down in 
tax legislation. Paragraph 3 of that Article states that ‘for the purpose of the 
administration of taxes, the tax administration shall respect the criteria of 
reasonableness and fairness’. 
8 Calculation of interest on late payment of VAT (‘VAT late payment interest’): 
1. Article 95(1)(1) of the LTA, entitled ‘Methods of Enforcing Tax 
Obligations’, establishes that late payment interest is a method of enforcing tax 
obligations. 
2. Article 123(1) of Lietuvos Respublikos Pridėtinės Vertės Mokesčio 
Įstatymas of 5 March 2002, Nr. IX-751 (the Law of the Republic of Lithuania on 
Value Added Tax (‘Law on VAT’)), entitled ‘Failure to Comply with the 
Procedure for the Payment of VAT’, states that for tax payers who infringe the 
provisions of that Law, ‘late payment interest shall be calculated in accordance 
with the procedure established by the [LTA]’. 
3. Article 96(1)(2) of the LTA, entitled ‘Late Payment Interest’, establishes 
that ‘late payment interest shall be calculated in respect of the taxpayer for: (i) 
taxes subject to declaration but not declared or (ii) taxes not subject to declaration 
and not calculated; which were not paid or not paid on time as determined by the 
tax administration in the course of a tax inspection …’ 
4. Article 97(2) of the LTA, entitled ‘Commencement of Calculation of Late 
Payment Interest’, states that ‘in the case specified in [Article 96(1)(2)] of this 
Law late payment interest shall be calculated beginning with the day following the 
day on which the tax had to be paid to the budget in compliance with the tax 
legislation in force at that time until the day on which the inspection report was 
completed and, in the case of failure to pay the tax within the time limit laid down 
in Article 81(2) of this Law … late payment interest shall continue to be 
calculated from the day following the expiry of the said time limit’. 
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5. Article 98(2) of the LTA, entitled ‘Time Period for Calculating Late 
Payment Interest’, provides that ‘late payment interest the calculation of which 
commenced subject to the procedure laid down in Article 97(1) and (2) of this 
Law shall be calculated for a period not exceeding 180 days from the day on 
which the right to enforce the recovery of arrears in payments is created and, 
where the taxpayer fails to pay self-calculated taxes not subject to declaration (or, 
in the cases specified in the relevant tax law, calculated by the tax administration) 
for a period not exceeding 180 days from the deadline for payment laid down in 
the relevant tax law …’ 
6. Article 99(1) of the LTA, entitled ‘Amount of Late Payment Interest’, 
establishes that ‘the rate of late payment interest, which in all cases may not be 
less than zero, and the procedure for calculating it shall be determined by the 
Minister of Finance, taking into account the yield, as on the last business day of 
the previous calendar quarter, of the government security, the redemption period 
of which is closest to a 12 month period on the secondary market for securities 
(e.g. in Q4 2024 the yield on a government security was 3.708%). The rate of late 
payment interest shall be determined by increasing the above rate by 7 percentage 
points’ (e.g. 3.708% + 7%. = 10,708%) (version of Law No XIV-1658 of 
13 December 2022 in force as of 1 May 2023; until 1 May 2023: 10 percentage 
points) … (Since 2012, the rate of late payment interest on tax not paid or paid 
late has been set by the Minister of Finance at 0.03% per day (e.g. 10.708%: 365 
days = 0.029 per cent per day), except for 0.029 per cent from 1 May 2023 to 
31 October 2023 and from 1 May 2024). 
7. Article 88(5) of the LTA, entitled ‘Deferral or Payment in Instalments of 
Arrears in Payments’, establishes that ‘interest shall be payable on the tax loan 
granted, the amount of which, which in all cases may not be less than zero, and 
the procedure for calculating it, is to be determined by the Minister of Finance, 
taking into account the yield, as on the last business day of the previous calendar 
quarter, of the government security, the redemption period of which is closest to a 
12 month period, on the secondary market for the trading of securities, as defined 
in the Securities Law of the Republic of Lithuania, of the government security’ … 
(Since 2012, the rate of interest on the tax loan has been set by the Minister of 
Finance at 0.01% for each day of use of the tax loan, with the exception of 
0.00013699% in Q4 2022 and 0.011% from 1 November 2023 to 31 January 
2024). 
8. Article 87(9) of the LTA, entitled ‘Crediting and Refunding Tax 
Overpayments’, (version of Law No XIV-1658 of 13 December 2022) provides 
that ‘if the tax administration fails to refund the tax overpayment within the time 
limit …, it shall calculate interest thereon for the benefit of the taxpayer at a rate 
equal to the interest rate set out in Article 88(5) of this Law, payable in 
accordance with the tax loan agreements, until the tax overpayment has been 
repaid to the taxpayer. …’ 
9 Administrative and criminal liability 
NEKILNOJAMOJO TURTO VALDYMAS 
 
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1. Article 127(2) of the LTA, entitled ‘Mutual Assistance between the Tax 
Administration and Law Enforcement or Controlling Authorities in the course of 
Tax Inspection’, establishes that ‘where the tax administration, in the course of a 
tax inspection, establishes any indication that a criminal act or any other offence 
has taken place, the investigation of which falls outside the sphere of its 
competence, it shall inform the relevant law enforcement or controlling authority 
thereof’. 
2. Article 143 of the LTA, entitled ‘Liability of Taxpayers and Third Persons 
for the Infringement of Other Tax Laws’, provides that ‘taxpayers, third persons 
and/or the management and other responsible staff of a legal person shall also be 
held liable, in compliance with the Code of Administrative Offences or the 
Criminal Code, for failure to fulfil or properly fulfil the obligations under this 
Law’. 
10 Exemption from late payment interest and penalties 
1. Article 100 of the LTA, entitled ‘Exemption from Late Payment Interest’, 
provide in Paragraph 1 that ‘the taxpayer may be exempted from late payment 
interest, calculated but not paid (recovered), or a part thereof, provided that: […] 
(2) such legal possibility is provided for in the special tax law; (3) there is a basis 
provided for in paragraph 1 of Article 141 [of the LTA]; (4) in other cases where 
it is not feasible to recover late payment interest in economic and/or social terms 
within the meaning of [Article 113(1)(3) of the LTA]. The said basis for 
exemption may be applied only in respect of those taxpayers who are natural 
persons’. 
2. Article 141(1) of the LTA, entitled ‘Exemption from Fines’, provides that 
‘the grounds for the exemption of fines imposed under Articles 139 and 140 of 
this Law shall be the following: (1) if the taxpayer proves the absence of his fault 
with regard to the infringement; (2) if the tax law was infringed on account of 
circumstances beyond the taxpayer’s control and which he could not and did not 
foresee. The actions or failure to act by the taxpayer or his employees and the 
taxpayer’s insolvency shall not be treated as such circumstances; (3) where a 
separate act of the taxpayer, though contrary to the provisions of a tax law, causes 
no damage to the budget; (4) where the taxpayer infringed the law on account of 
an erroneous summarised explanation of the said tax law having been given or 
erroneous tax advice having been provided by the tax administration in writing or 
by telephone if the advice provided was recorded in accordance with the 
procedure set out by the central tax administration and it is possible to identify the 
person who called – the taxpayer (or his representative). 
3. Article 141(2) of the LTA establishes that ‘exemption from the fine shall 
apply only where the taxpayer has paid the amount of tax related to the fine 
imposed (the tax has been credited or the recovery thereof has been enforced) or 
the time limit for the payment of tax has been deferred or payment in instalments 
has been agreed in accordance with the procedure established by this Law’. 
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Facts and arguments of the parties 
11 The dispute in the case arose from the Inspectorate’s decision, in accordance with 
the provisions of Articles 8(3), 100 and 141 of the LTA, not to exempt the 
Company from VAT late payment interest of EUR 3 150 660.79 and fine for 
failure to pay VAT of EUR 1 838 812.44. 
12 An assessment of whether the Company’s VAT calculation, declaration and 
payment for the period from 1 December 2012 to 31 December 2016 were correct 
revealed that the Company had infringed the provisions of Articles 58(1) and 64 
of the Law on VAT, as it had (i) included in the VAT deduction amount the VAT 
from certain VAT invoices which were not legally valid, and (ii) engaged in 
transactions involving VAT fraud. By Decision No (21/131-31-5)FR0682-299 of 
the Inspectorate of 4 September 2018 on the approval of the inspection report 
(‘the decision on the approval of the inspection report’), following the assessment, 
the Company was ordered to pay to the state budget EUR 6 517 901.36 of VAT, 
EUR 2 431 505.31 as VAT late payment interest and EUR 1 862 257 as a fine for 
failure to pay VAT. Following the tax disputes, the Supreme Administrative Court 
of Lithuania (‘the Supreme Administrative Court’) confirmed the findings of the 
tax audit mentioned above by its ruling of 9 September 2020 in administrative 
case No eA-2271-556/2020. The Inspectorate, having examined the request 
submitted by the Company on 18 January 2021, stated that the Company did not 
meet any of the conditions set out in Articles 141(1)(1), (2), (3) and (4) of the 
LTA, and that there were no exceptional circumstances which would lead to the 
criteria of reasonableness and fairness (Article 8(1) of the LTA) being applied, 
therefore the Company could not be exempted from the payment of late payment 
interest on the grounds set out above, and on 16 March 2021 adopted Decision No 
(21.222)500-63 refusing to exempt the Company from the payment of 
EUR 2 835 125.75 in VAT late payment interest. The Company has not complied 
with the additionally determined VAT tax obligations, and it is therefore 
established that the total amount of VAT late payment interest calculated by the 
decision on the approval of the inspection report and calculated during the tax 
dispute (from 26 January 2013 to 4 April 2021) amounts to EUR 3 150 660.79 and 
the fine for failure to pay VAT is EUR 1 838 812.44. 
According to the information provided by the Inspectorate, the pre-trial 
investigation […] recognised the Company as a legal person to be subject to 
prosecution. While the criminal proceedings remain pending, no conviction has 
been handed down against the Company, and the Company is currently not 
subject to a criminal penalty. 
13 […] [repeated information] The Company requests it be exempted from paying 
the VAT late payment interest and the fine for failure to pay VAT, however its 
request that it be exempted from paying the fine for failure to pay VAT cannot be 
considered (Article 141(2) of the LTA). 
NEKILNOJAMOJO TURTO VALDYMAS 
 
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14 The Inspectorate did not exempt the Applicant from paying VAT late payment 
interest on the following substantive grounds: 
1. The late payment interest was determined in accordance with the 
requirements set out in the LTA, taking into account the outcome of the tax 
dispute in accordance with the ruling of the Supreme Administrative Court of 
9 September 2020 in administrative case No eA-2271-556/2020. The LTA does 
not provide for the Company to be exempted from paying late payment interest on 
grounds other than those set out in Article 100(1) of the LTA. 
2. Articles 88 and 99 of the LTA clearly provide for the calculation of both 
interest (in the case of tax loan agreements) and late payment interest (for: (i) tax 
subject to declaration but not declared, or (ii) taxes not subject to declaration and 
not calculated; which were not paid or not paid on time, as determined in the 
course of a tax inspection,), i.e. the LTA does not allow any exception in respect 
of the amounts thereof. If the company concerned fails to pay the VAT calculated 
at the time of the inspection, the tax administration is entitled to charge late 
payment interest at the rate of 0.03%. 
3. The legislator lays down a binding calculation of the amount of late payment 
interest in the LTA and the tax administration is only entitled to decide on the rate 
of late payment interest within the limits set by the legislation. 
4. According to the case-law of the Supreme Administrative Court, the 
requirement to pay late payment interest for late compliance with a tax obligation 
is not a penalty of a criminal nature. Late payment interest is a method of ensuring 
a tax obligation is discharged (Article 95(1)(1) of the LTA, ruling of the Supreme 
Administrative Court of 12 April 2010 in administrative case No A-556-
646/2010). In administrative case No. A-143-2619/2011 of 18 November 2011, 
the extended panel of judges of the Supreme Administrative Court noted that the 
inherent nature of late payment interest, as a means of enforcement of a tax 
obligation, is that its application or the possibility to apply it encourages voluntary 
and proper performance of the tax obligation, while in the case of non-compliance 
or inadequate compliance it ensures that debt to the budget and the state’s 
financial losses (e.g. due to the State’s inability to use the tax sums which ought to 
have been paid to it) are covered. Late payment interest is common in civil, non-
criminal, law relationships, i.e. in civil law relationships, where it has, inter alia, a 
compensatory function. It follows that, when considering whether the late 
payment interest in question can be regarded as a criminal penalty (punishment) as 
provided for in Article 4(1) of Protocol No 7 to the Convention, it cannot be said 
that, in the present case, the order to pay resulted in a penalty being imposed on 
the Applicant. 
5. In its ruling of 18 November 2011 in administrative case No A-143-
2619/2011 and the ruling of 28 February 2013 in administrative case No A-442-
703/2013, the Supreme Administrative Court found that a tax fine (excise duty 
fine) had been treated as criminal penalty (contrary to the ne bis in idem 
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principle), and also that there had been no breach of the principle ne bis in idem 
with regard to the tax and late payment interest imposed on the Applicant (in the 
present case, excise duty). 
6. If a decision were made to require the Company to pay the 0.01% late 
payment interest, the tax administration would breach the principle of equality of 
taxpayers before the law (Article 7 of the LTA). 
15 The Company disputes the Inspectorate’s decision and requests that it be 
exempted from paying the penalty part of the VAT late payment interest (2/3 of 
the total amount of the late payment interest to be paid by the Company) on the 
following grounds: 
1. The amount of the late payment interest calculated based on the tax 
infringements, referred to in the decision on the inspection report, represents more 
than 70% of the penalty part of the interest on late payment of taxes and is 
incompatible with the principle of the prohibition of double jeopardy (ne bis in 
idem). 
2. In its judgment on the requirement for Member States to ensure compliance 
with the ne bis in idem principle and the principle of proportionality when 
imposing penalties in respect of VAT infringements (see [judgment of 4 May 
2023 in MV-98, C-97/21, ECLI:EU:C:2023:371]), the CJEU noted that, according 
to settled case-law, administrative penalties imposed by national tax authorities in 
the field of VAT constitute an implementation of Articles 2 and 273 of the VAT 
Directive and, therefore, of EU law for the purposes of Article 51(1) of the 
Charter. They must therefore comply with the fundamental right guaranteed by 
Article 50 thereof (see [judgment of 5 May 2022] BV, C-570/20, EU:C:2022:348, 
paragraph 26 and the case-law cited). In its judgments, the CJEU recalls that 
Article 50 of the Charter provides that ‘no one shall be liable to be tried or 
punished again in criminal proceedings for an offence for which he or she has 
already been finally acquitted or convicted within the Union in accordance with 
the law’. Therefore, the ne bis in idem principle prohibits a cumulation both of 
proceedings and of penalties of a criminal nature for the purposes of that article 
for the same acts and against the same person ([judgment of 22 March 2022, bpost 
SA v Autorité belge de la concurrence], C-117/20, EU:C:2022:202, paragraph 24 
and the case-law cited). 
3. There is no dispute that the basis for the VAT late payment interest is 
derived from the same acts in respect of which the Company is subject to criminal 
prosecution and imposition of criminal penalties. As regards the assessment of 
whether the proceedings and penalties concerned are criminal in nature, the CJEU 
noted that three criteria are relevant. The first is the legal classification of the 
offence under national law, the second is the intrinsic nature of the offence, and 
the third is the degree of severity of the penalty which the person concerned is 
liable to incur (see, [the above judgment] paragraph 25 and the case-law cited). It 
is pointed out in the case-law of the CJEU that the application of Article 50 of the 
NEKILNOJAMOJO TURTO VALDYMAS 
 
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Charter is not limited to proceedings and penalties which are classified as 
‘criminal’ by national law, but extends, irrespective of such a classification under 
domestic law, to proceedings and penalties which must be considered to have a 
criminal nature on the basis of the criteria of the intrinsic nature of the offence and 
the degree of severity of the penalty which the person concerned is liable to incur. 
The intrinsic nature of the offence in question and the degree of severity of the 
penalties which it is liable to entail may result in its being criminal in nature (see 
[the judgment in MV-98] paragraph 38; judgments of 20 March 2018] Menci, 
C-524/15, EU:C:2018:197, paragraph 30, and of [22 June 2021] Latvijas 
Republikas Saeima (Penalty points), C-439/19, EU:C:2021:504, paragraph 88). 
4. As regards the second criterion, relating to the intrinsic nature of the offence, 
it must be ascertained whether the said measure is intended to impose a penalty 
and the mere fact that it also pursues a deterrent purpose does not mean that it 
cannot be characterised as a criminal penalty. The very nature of criminal 
penalties is that they seek both to punish and to deter unlawful conduct. By 
contrast, a measure which merely repairs the damage caused by the offence at 
issue is not criminal in nature (see [the above judgment in Latvijas Republikas 
Saeima (Penalty points)] paragraph 89 and the case-law cited). The Court of 
Justice notes that the degree of severity is determined by reference to the 
maximum potential penalty for which the relevant provisions provide (see 
[judgment of the European Court of Human Rights of 9 October 2003, Ezeh and 
Connors v The United Kingdom, CE:ECHR:2003:1009JUD003966598, § 120]). 
5. According to settled case-law of the CJEU, a limitation of the fundamental 
right guaranteed in Article 50 of the Charter may be justified on the basis of 
Article 52(1) thereof (see [the above judgment in bpost SA v Autorité belge de la 
concurrence] paragraph 40 and the case-law cited). In accordance with the first 
sentence of Article 52(1) of the Charter, any limitation on the exercise of the 
rights and freedoms recognised by that charter must be provided for by law and 
respect the essence of those rights and freedoms. According to the second 
sentence of Article 52(1), subject to the principle of proportionality, limitations on 
those rights and freedoms may be made only if they are necessary and genuinely 
meet objectives of general interest recognised by the European Union or the need 
to protect the rights and freedoms of others. 
6. As regards respect for the essence of the fundamental right guaranteed in 
Article 50 of the Charter, it is apparent from the case-law of the CJEU that such a 
cumulation must, in principle, be subject to conditions which are exhaustively 
defined, thereby ensuring that the right guaranteed in Article 50 of the Charter is 
not called into question as such (see [the above judgment in Menci] paragraph 43). 
The CJEU has been very clear in its case-law that automatic cumulation, which is 
not subject to any exhaustively defined condition, cannot be regarded as 
respecting the essence of that right (see [the above judgment in MV-98] 
paragraph 54). Specifically in the case of the Company, the situation is that the 
LTA provides for the automatic application of the element of a penalty nature of 
late payment interest irrespective of the total amount of the late payment interest 
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and of the fact that the taxpayer will be subject to criminal prosecution for the 
same acts which give rise to the late payment interest. In the Company’s view, the 
situation can in no way be justified by the exception in Article 52(1) of the 
Charter and, therefore, the automatic calculation of the penalty part of the late 
payment interest in respect of the Company must be regarded as incompatible 
with the ne bis in idem principle and the principle of proportionality of the penalty 
(fairness) laid down in Articles 50 and 49 of the Charter. 
7. As regards the prohibition of uncontrolled automatic cumulation of 
penalties, the CJEU has clarified in its case-law that such national legislation must 
provide for clear and precise rules which allow the individual to predict which 
acts and omissions are liable to be subject to such a duplication of proceedings 
and penalties; next, ensure the procedures are coordinated so as to reduce to what 
is strictly necessary the additional disadvantage associated with the duplication of 
proceedings of a criminal nature conducted independently; and, lastly, make it 
possible to guarantee that the severity of all of the penalties imposed corresponds 
with the seriousness of the offence concerned (see [the above judgment in BV] 
paragraph 36 and the case-law cited). 
8. According to the Company, in the light of the rule of application and 
interpretation of Article 273 of the VAT Directive and Article 50 of the Charter 
(see [the above judgment in MV-98] paragraph 63), it is clear that, the provisions 
of Articles 96 to 99 of the LTA governing the imposition and calculation of late 
payment interest must also be regarded as prohibited in so far as those articles do 
not ensure coordination of the procedures for the administrative imposition of late 
payment interest and criminal prosecution, so as to reduce to what is strictly 
necessary the additional disadvantage resulting from the duplication of those 
measures and do not ensure that the severity of all penalties imposed corresponds 
with the seriousness of the offence concerned. The fact that interest on late 
payment of tax, in particular with regard to VAT infringements, is equivalent to a 
penalty and that the calculation of interest on late payment of tax may, in certain 
cases, give rise to infringements of the principles of proportionality and fairness of 
the penalty and of the ne bis in idem principle, is also recognised in the recent 
case-law of the CJEU, where the Court notes that even measures of a 
compensatory nature, in so far as they have a deterrent element, are liable to 
infringe the ne bis in idem principle and the principle of proportionality, in 
particular where they apply in conjunction with other criminal measures and the 
national legislation does not expressly lay down rules ensuring the protection of 
the ne bis in idem principle and the principle of proportionality (see [the above 
judgment in MV-98]). 
9. The fact that interest on late payment of tax is a measure with the effect of a 
penalty and has a very clear criminal element has also been recognised expressis 
verbis by the Government of the Republic of Lithuania, which, in CJEU Case 
C-387/16 (see [judgment of 28 February 2018, Nidera, 
C-387/16 ECLI:EU:C:2018:121]), explained (acknowledged) that the rate of 
interest provided for in Article 99 of the LTA not only aims to offset the loss 
NEKILNOJAMOJO TURTO VALDYMAS 
 
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incurred by the taxable person but entails, by virtue of the increase by ten 
percentage points of the annual interest rate for government bonds, a punitive 
element equivalent to a penalty (see [that judgment] paragraph 33). In the view of 
the Government of the Republic of Lithuania, even if late payment interest were 
applied only to ‘the period from the date of the decision of the tax authority or, 
where appropriate, of the courts upholding the request for a refund to the date at 
which the overpaid VAT was refunded to the taxable person in full … that would 
result in overcompensation for the loss incurred … due to the unavailability of the 
funds …, which would enrich the … person unjustifiably’. 
10. With regard to the Company, late payment interest is determined and 
considered not only from the moment of the court decision, but retrospectively for 
the entire period up to the end of the tax inspection, including the interest on late 
payment of tax calculated during the tax inspection, and, therefore, if, in the view 
of the Government of the Republic of Lithuania, late payment interest is a 
measure with the effect of a penalty (in so far as it relates to the penalty element 
of late payment interest, i.e. interest increased by 10 or 7 percentage points), 
which gives the person claiming late payment interest an unjustified advantage 
even in cases where interest is calculated only from the moment of the court 
decision, it is clear that the disproportionate nature of late payment interest as a 
penalty becomes even more apparent in situations such as that faced by the 
Company, i.e. where late payment interest is also calculated retrospectively for the 
period from the time when the tax became due until the end of the tax 
investigation, including the period of the tax investigation, as well as the entire 
period of the subsequent legal proceedings. 
11. The LTA regulation on the calculation of late payment interest allows for a 
very clear identification and distinction between the penalty and compensatory 
element of late payment interest, which is equal to 7 percentage points (as of 
1 May 2023, the late payment interest rate was increased by 7 percentage points; 
before 1 May 2023, the penalty rate of late payment interest was increased by 10 
percentage points). The compensatory element of late payment interest is to be 
regarded as a basic rate of late payment interest, which corresponds to the interest 
rate applied to both the tax administration and taxpayers in cases where the 
deadline for payment of taxes is postponed for reasons not related to an 
infringement of the law; compensatory interest is paid in the context of a tax loan 
agreement, and compensatory interest is also paid when the State compensates for 
the delayed return of overpaid taxes. The rate of compensatory interest is 0.01% 
per day, while the late payment interest rate, including its penalty part, which is 
0.02% per day, amounts to 0.03% per day, i.e. three times higher than the normal 
rate of interest of a compensatory nature applicable to a deferred tax payment. 
12. The tax infringements on the basis of which late payment interest is 
calculated, are the same as offences prohibited under criminal law, which are the 
subject of (i) a pre-trial investigation and (ii) a criminal sentencing procedure (a 
trial on the substance of the criminal case). In that regard, it is considered that the 
criminal part of late payment interest, which, according to the Company’s 
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estimate, amounts to approximately 2/3 of the total amount of the late payment 
interest determined in respect of the Company, clearly infringes the prohibition of 
double jeopardy enshrined in Article 50 of the Charter (the ne bis in idem 
principle), as well as the requirement to ensure that the penalty imposed on a 
person is proportionate to the infringement and is fair in relation to the 
infringement (the principles of proportionality of the punishment and of fairness 
enshrined in Article 49(3) of the Charter). 
13. The [above judgment in Menci] lays down cumulative conditions for 
prosecution and sanctions (see [that judgment] paragraph 63), according to which 
penalties may be imposed provided that the legislation: (i) pursues an objective of 
general interest which is such as to justify such a duplication of proceedings and 
penalties, namely combating VAT offences, it being necessary for those 
proceedings and penalties to pursue additional objectives; (ii) contains rules 
ensuring coordination which limits to what is strictly necessary the additional 
disadvantage which results, for the persons concerned, from a duplication of 
proceedings, and (iii) provides for rules making it possible to ensure that the 
severity of all of the penalties imposed is limited to what is strictly necessary in 
relation to the seriousness of the offence concerned. 
14. The CJEU, in [judgment of 23 March 2023, Dual Prod, C-412/21, 
ECLI:EU:C:2023:234] paragraph 73 ruled that Article 50 of the Charter must be 
interpreted as not precluding a criminal penalty, for infringement of the rules on 
products subject to excise duty, from being imposed on a legal person who has 
already been subject, in respect of the same facts, to a criminal penalty that has 
become final, provided: (i) that the possibility of duplicating those two penalties is 
provided for by law; (ii) that national legislation does not allow for proceedings 
and penalties in respect of the same facts on the basis of the same offence or in 
pursuit of the same objective, but provides for only the possibility of a duplication 
of proceedings and penalties under different legislation; (iii) that those 
proceedings and penalties pursue complementary aims relating, as the case may 
be, to different aspects of the same unlawful conduct at issue; (iv) that there are 
clear and precise rules making it possible to predict which acts or omissions are 
liable to be subject to a duplication of proceedings and penalties, and also to 
predict that there will be coordination between the different authorities; that the 
two sets of proceedings have been conducted in a manner that is sufficiently 
coordinated and within a proximate time frame; and that any penalty that may 
have been imposed in the proceedings that were first in time was taken into 
account in the assessment of the second penalty, meaning that the resulting 
burden, for the persons concerned, of such duplication is limited to what is strictly 
necessary and the overall penalties imposed correspond to the seriousness of the 
offences committed. 
15. An evaluation of the provisions of the LTA governing late payment interest 
demonstrates that none of the mandatory conditions required by Article 50 of the 
Charter and the interpretations by the CJEU are fulfilled, i.e. the law does not 
explicitly regulate the possibility to apply both penalties of a criminal nature and 
NEKILNOJAMOJO TURTO VALDYMAS 
 
13 
calculation of interest on late payment of taxes in respect of the same 
infringement, with the penalty element of late payment interest intended to punish 
the person in a manner which exceeds the compensatory purpose of late payment 
interest. There are no rules making it possible to predict which acts or omissions 
are liable to be subject to a duplication of proceedings and penalties, and also to 
predict that there will be coordination between the different authorities; that the 
two sets of proceedings have been conducted in a manner that is sufficiently 
coordinated and within a proximate time frame; and that any penalty that may 
have been imposed in the proceedings that were first in time was taken into 
account in the assessment of the second penalty, meaning that the resulting 
burden, for the persons concerned, of such duplication is limited to what is strictly 
necessary and the overall penalties imposed correspond to the seriousness of the 
offences committed. 
16. […] [repeated information]. 
17. According to interpretations from the CJEU, Articles 2 and 273 of the VAT 
Directive require that Member States take all legislative and administrative 
measures appropriate for ensuring collection of all the VAT due on their territory 
and for preventing fraud (see judgment of 2 May 2018, Scialdone, C-574/15, 
EU:C:2018:295, paragraph 26). In the absence of harmonisation of EU legislation 
in the field of the penalties applicable in cases of non-compliance with the 
conditions laid down by arrangements established under such legislation, Member 
States retain the power to choose the penalties which seem to them to be 
appropriate. They must, however, exercise that power in accordance with EU law 
and its general principles, and, consequently, in accordance with the principles of 
proportionality (see judgments of 29 July 2010, Profaktor Kulesza, Frankowski, 
Jóźwiak, Orłowski, C-188/09, EU:C:2010:454, paragraph 29, and of 9 July 2015, 
Salomie and Oltean, C-183/14, EU:C:2015:454, paragraph 62). 
Succinct presentation of the reasoning in the request for a preliminary ruling 
16 The CJEU [in judgment 26 February 2013, Åkerberg Fransson, C-617/10] noted 
that the ne bis in idem principle ‘does not preclude a Member State from imposing 
successively, for the same acts of non-compliance with declaration obligations in 
the field of [VAT], a tax penalty and a criminal penalty in so far as the first 
penalty is not criminal in nature, a matter which is for the national court to 
determine’. The freedom of Member States to choose penalties is justified by the 
need to ensure that all VAT revenue is collected and, in so doing, that the 
financial interests of the European Union are protected. The CJEU (judgment of 
5 December 2017, M.B., M.A.S, C-42/17, EU:C:2017:936) found that it is for the 
Member States to ensure effective collection of the Union’s own resources […]. 
On that basis, they are obliged to collect sums corresponding to the own resources 
which, because of fraud, have been withheld from the EU budget. To ensure that 
all VAT revenue is collected, and thereby that the financial interests of the EU are 
protected, the Member States are free to choose the applicable penalties, which 
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14  
may take the form of administrative penalties, criminal penalties or a combination 
of the two (see [the above judgment in Åkerberg Fransson] paragraph 34 and 
[judgment of 8 September 2015, Taricco, C-105/14, ECLI:EU:C:2015:555] 
paragraph 39). It should be observed, however, first, that criminal penalties may 
be essential to combat certain cases of serious VAT fraud in an effective and 
deterrent manner (see [the above judgment in Taricco] paragraph 39). Thus the 
Member States, if they are not to disregard their obligations under Article 325(1) 
and (2) TFEU, must ensure that, in cases of serious fraud affecting the EU’s 
financial interests in relation to VAT, criminal penalties that are effective and 
deterrent are adopted (see [the above judgment in Taricco] paragraphs 42 and 43). 
Consequently, it must be considered that Member States are in breach of their 
obligations under Article 325(1) and (2) TFEU if the criminal penalties adopted to 
punish serious VAT fraud do not enable the collection in full of VAT to be 
guaranteed effectively. 
17 Under the Convention, a person cannot be punished twice for the same offence. In 
its case-law the ECtHR found that the ne bis in idem principle is breached where it 
is established that a person is punished for the same or substantially similar facts 
(the same act) for a second time, also that Article 4 of Protocol No 7 to the 
Convention is to be understood and interpreted so as to prohibit, on the basis of 
the ne bis in idem principle, the prosecution and/or punishment of a person, for a 
second time, for an offence resulting from the same or substantially similar facts 
(events) in respect of which he or she has been already punished (e.g. [ECtHR 
judgment of 10 February 2009, Sergey Zolotukhin v Russia 
(ECLI:CE:ECHR:2009:0210JUD001493903)]). 
18 The Tax Disputes Commission, based on interpretations by the Supreme 
Administrative Court of the Law on VAT, observes that the primary function of 
late payment interest is to ensure fulfilment of a tax obligation, and that it is 
primarily intended to compensate the State for its costs rather than to punish a 
person (ruling of the Supreme Administrative Court of 10 March 2020 in 
administrative case No eA-3247-575/2020). However, the rate of late payment 
interest also has a penalty element, since it is determined by increasing the 
compensatory part related to the State’s borrowing costs (which is determined by 
taking into account the yield of the Government security on the secondary 
securities market) by 7 percentage points. 
19 The CJEU noted that the principle of proportionality requires that the duplication 
of proceedings and penalties provided for by national legislation, such as that at 
issue in the main proceedings, not exceed what is appropriate and necessary in 
order to attain the objectives legitimately pursued by that legislation, it being 
understood that, when there is a choice between several appropriate measures, 
recourse must be had to the least onerous and the disadvantages caused must not 
be disproportionate to the aims pursued ([the above judgment in BV] paragraph 34 
and the case-law cited). 
NEKILNOJAMOJO TURTO VALDYMAS 
 
15 
20 The CJEU has noted that even measures of a compensatory nature, in so far as 
they have a deterrent element, are liable to infringe the ne bis in idem principle 
and the principle of proportionality, in particular where they apply in conjunction 
with other criminal measures and the national legislation does not expressly lay 
down rules ensuring the protection of the ne bis in idem principle and the principle 
of proportionality (see [the above judgment in MV-98]). 
21 Considering the contradictory positions of the parties to the dispute and the case-
law of the CJEU, the Tax Disputes Commission seeks to clarify whether the 
provisions of Articles 96 to 99 of the LTA – where that legislation does not ensure 
coordination of the procedures for administrative imposition of late payment 
interest and criminal prosecution, so as to reduce to what is strictly necessary the 
additional disadvantage resulting from the duplication of those measures and does 
not ensure that the severity of all penalties imposed corresponds with the 
seriousness of the offence concerned, and there are no restrictions on the 
application of the penalty part of the late payment interest when the Company is 
subject to concurrent criminal prosecution and criminal punishment procedures in 
respect of the actions on the basis of which late payment interest is determined – 
are compatible with the provisions of Article 325 TFEU, Article 273 of the VAT 
Directive, Articles 49(3) and 50 of the Charter, as well as with the principle of the 
prohibition of double jeopardy (ne bis in idem) and the principle of 
proportionality. 
22 With regard to a request for a preliminary ruling, the CJEU may, if necessary, 
provide national courts […] with guidance to assist them in their assessment of the 
specific case. 
23 The Tax Disputes Commission also considers that a reference to the Court of 
Justice at the pre-litigation stage of the tax dispute is appropriate for the purpose 
of expeditious examination of tax disputes. 
The Tax Disputes Commission […] [standard procedural wording] decides: 
1. The following questions are referred to the Court of Justice of the European 
Union for a preliminary ruling: 
1.1. Are Article 325 TFEU, Article 273 of the VAT Directive and Article 50 of 
the Charter to be interpreted as precluding national legislation which makes it 
possible to impose interest on late payment of tax, a part of which has the effect of 
a penalty in respect of the same tax infringements which are the subject of a 
criminal prosecution, without laying down any rules ensuring coordination which 
limits to what is strictly necessary the additional disadvantage which results, for 
the persons concerned, from a duplication of proceedings or making it possible to 
ensure that the severity of all of the penalties imposed is limited to what is strictly 
necessary in relation to the seriousness of the offence concerned?  
1.2. Are Article 325 TFEU, Article 273 of the VAT Directive and Article 49(3) 
of the Charter to be interpreted as precluding a procedure for applying interest on 
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16  
late payment of taxes which, irrespective of the nature and severity of the 
infringements, sets a fixed penalty part of interest on late payment of taxes, 
without making it possible to reduce that penalty part, that is to say, to impose a 
rate of late payment interest which is lower than the rate provided for by the law 
or to waive the penalty part of late payment interest? 
[…] [standard procedural wording] 
[…] [standard procedural wording] 
[…] [composition of the Tax Disputes Commission]