diff --git a/apps/systemtags/src/components/SystemTagPicker.vue b/apps/systemtags/src/components/SystemTagPicker.vue
index 07ce186d349d8..8ed26ce9cb3b0 100644
--- a/apps/systemtags/src/components/SystemTagPicker.vue
+++ b/apps/systemtags/src/components/SystemTagPicker.vue
@@ -22,22 +22,16 @@
 
 		<template v-else>
 			<!-- Search or create input -->
-			<form class="systemtags-picker__create" @submit.stop.prevent="onNewTag">
+			<div class="systemtags-picker__input">
 				<NcTextField :value.sync="input"
 					:label="t('systemtags', 'Search or create tag')"
 					data-cy-systemtags-picker-input>
 					<TagIcon :size="20" />
 				</NcTextField>
-				<NcButton :disabled="status === Status.CREATING_TAG"
-					native-type="submit"
-					data-cy-systemtags-picker-input-submit>
-					{{ t('systemtags', 'Create tag') }}
-				</NcButton>
-			</form>
+			</div>
 
 			<!-- Tags list -->
-			<div v-if="filteredTags.length > 0"
-				class="systemtags-picker__tags"
+			<div class="systemtags-picker__tags"
 				data-cy-systemtags-picker-tags>
 				<NcCheckboxRadioSwitch v-for="tag in filteredTags"
 					:key="tag.id"
@@ -46,15 +40,25 @@
 					:indeterminate="isIndeterminate(tag)"
 					:disabled="!tag.canAssign"
 					:data-cy-systemtags-picker-tag="tag.id"
+					class="systemtags-picker__tag"
 					@update:checked="onCheckUpdate(tag, $event)">
 					{{ formatTagName(tag) }}
 				</NcCheckboxRadioSwitch>
+				<NcButton v-if="canCreateTag"
+					:disabled="status === Status.CREATING_TAG"
+					alignment="start"
+					class="systemtags-picker__tag-create"
+					native-type="submit"
+					type="tertiary"
+					data-cy-systemtags-picker-button-create
+					@click="onNewTag">
+					{{ input.trim() }}<br>
+					<span class="systemtags-picker__tag-create-subline">{{ t('systemtags', 'Create new tag') }}</span>
+					<template #icon>
+						<PlusIcon />
+					</template>
+				</NcButton>
 			</div>
-			<NcEmptyContent v-else :name="t('systemtags', 'No tags found')">
-				<template #icon>
-					<TagIcon />
-				</template>
-			</NcEmptyContent>
 
 			<!-- Note -->
 			<div class="systemtags-picker__note">
@@ -113,6 +117,7 @@ import NcNoteCard from '@nextcloud/vue/dist/Components/NcNoteCard.js'
 import NcTextField from '@nextcloud/vue/dist/Components/NcTextField.js'
 import TagIcon from 'vue-material-design-icons/Tag.vue'
 import CheckIcon from 'vue-material-design-icons/CheckCircle.vue'
+import PlusIcon from 'vue-material-design-icons/Plus.vue'
 
 import { getNodeSystemTags, setNodeSystemTags } from '../utils'
 import { createTag, fetchTag, fetchTags, getTagObjects, setTagObjects } from '../services/api'
@@ -143,6 +148,7 @@ export default defineComponent({
 		NcLoadingIcon,
 		NcNoteCard,
 		NcTextField,
+		PlusIcon,
 		TagIcon,
 	},
 
@@ -176,12 +182,17 @@ export default defineComponent({
 	},
 
 	computed: {
+		sortedTags(): TagWithId[] {
+			return [...this.tags]
+				.sort((a, b) => a.displayName.localeCompare(b.displayName, getLanguage(), { ignorePunctuation: true }))
+		},
+
 		filteredTags(): TagWithId[] {
 			if (this.input.trim() === '') {
-				return this.tags
+				return this.sortedTags
 			}
 
-			return this.tags
+			return this.sortedTags
 				.filter(tag => tag.displayName.normalize().includes(this.input.normalize()))
 		},
 
@@ -189,6 +200,11 @@ export default defineComponent({
 			return this.toAdd.length > 0 || this.toRemove.length > 0
 		},
 
+		canCreateTag(): boolean {
+			return this.input.trim() !== ''
+				&& !this.tags.some(tag => tag.displayName.trim().toLocaleLowerCase() === this.input.trim().toLocaleLowerCase())
+		},
+
 		statusMessage(): string {
 			if (this.toAdd.length === 0 && this.toRemove.length === 0) {
 				// should not happen™
@@ -199,7 +215,7 @@ export default defineComponent({
 				return n(
 					'systemtags',
 					'{tag1} will be set and {tag2} will be removed from 1 file.',
-					'{tag1} and {tag2} will be set and removed from {count} files.',
+					'{tag1} will be set and {tag2} will be removed from {count} files.',
 					this.nodes.length,
 					{
 						tag1: this.formatTagChip(this.toAdd[0]),
@@ -368,6 +384,15 @@ export default defineComponent({
 
 				// Check the newly created tag
 				this.onCheckUpdate(tag, true)
+
+				// Scroll to the newly created tag
+				await this.$nextTick()
+				const newTagEl = this.$el.querySelector(`input[type="checkbox"][label="${tag.displayName}"]`)
+				newTagEl?.scrollIntoView({
+					behavior: 'instant',
+					block: 'center',
+					inline: 'center',
+				})
 			} catch (error) {
 				showError((error as Error)?.message || t('systemtags', 'Failed to create tag'))
 			} finally {
@@ -461,22 +486,33 @@ export default defineComponent({
 
 <style scoped lang="scss">
 // Common sticky properties
-.systemtags-picker__create,
+.systemtags-picker__input,
 .systemtags-picker__note {
 	position: sticky;
 	z-index: 9;
 	background-color: var(--color-main-background);
 }
 
-.systemtags-picker__create {
+.systemtags-picker__input {
 	display: flex;
 	top: 0;
 	gap: 8px;
 	padding-block-end: 8px;
 	align-items: flex-end;
+}
 
-	button {
-		flex-shrink: 0;
+.systemtags-picker__tags {
+	padding-block: 8px;
+	gap: var(--default-grid-baseline);
+	display: flex;
+	flex-direction: column;
+	.systemtags-picker__tag-create {
+		:deep(span) {
+			text-align: start;
+		}
+		&-subline {
+			font-weight: normal;
+		}
 	}
 }
 
diff --git a/apps/systemtags/src/services/api.ts b/apps/systemtags/src/services/api.ts
index 4f202e0752295..3262ccd3a878f 100644
--- a/apps/systemtags/src/services/api.ts
+++ b/apps/systemtags/src/services/api.ts
@@ -46,7 +46,7 @@ export const fetchTag = async (tagId: number): Promise<TagWithId> => {
 	try {
 		const { data: tag } = await davClient.stat(path, {
 			data: fetchTagsPayload,
-			details: true
+			details: true,
 		}) as ResponseDataDetailed<Required<FileStat>>
 		return parseTags([tag])[0]
 	} catch (error) {
diff --git a/cypress/e2e/systemtags/files-bulk-action.cy.ts b/cypress/e2e/systemtags/files-bulk-action.cy.ts
index bfc2280a9d871..9614b445f9bb1 100644
--- a/cypress/e2e/systemtags/files-bulk-action.cy.ts
+++ b/cypress/e2e/systemtags/files-bulk-action.cy.ts
@@ -326,7 +326,10 @@ describe('Systemtags: Files bulk action', { testIsolation: false }, () => {
 
 			const newTag = randomBytes(8).toString('base64').slice(0, 6)
 			cy.get('[data-cy-systemtags-picker-input]').type(newTag)
-			cy.get('[data-cy-systemtags-picker-input-submit]').click()
+
+			cy.get('[data-cy-systemtags-picker-tag]').should('have.length', 0)
+			cy.get('[data-cy-systemtags-picker-button-create]').should('be.visible')
+			cy.get('[data-cy-systemtags-picker-button-create]').click()
 
 			cy.wait('@createTag')
 			cy.get('[data-cy-systemtags-picker-tag]').should('have.length', 6)