Revue européenne et internationale de droit fiscal

Résumé d’une conférence du Professeur Steffen Lampert sur l’influence du droit constitutionnel sur le droit fiscal allemand

Résumé d’une conférence du Professeur Steffen Lampert sur l’influence du droit constitutionnel sur le droit fiscal allemand (Université de Lyon, 13 février 2020) // Summary of a lecture by Professor Steffen Lampert on the influence of constitutional law on German tax law (University of Lyon, February 13, 2020)

After receiving an invitation from Professor Dr. Georges Cavalier (Université Lyon III), Professor Dr. Steffen Lampert from Osnabrück University, Germany, visited Lyon to give a lecture on 13 February on the influence fundamental rights have on German tax law and the role and self-understanding of the Federal Constitutional Court. Dr. Cavalier as well as Professor Dr. Lukasz Stankiewicz (Université de Limoges) and Professor Dr. Marco Greggi (Università degli Studi di Ferrara) were also present to comment on this topic from the perspective of French and Italian constitutional law.

The significant influence of constitutional court jurisprudence on the development of tax law is based on the numerous possibilities to review the law. In this context, abstract judicial review (generally initiated by a federal state-level body or by parts of the German Bundestag) plays a rather insignificant role in tax law. Submissions made by fiscal courts and in particular by the Federal Fiscal Court (taxation matters fall under “special jurisdiction”, which itself is part of “administrative jurisdiction”), and individual constitutional plaintiffs play a far greater role.

Professor Lampert first explained the impact of the constitutionally guaranteed protection of marriage and family using the example of taxation of spouses. In a 1957 decision (17 January 1957-1 BvL 4/54), the Federal Constitutional Court stressed that Article 6 (1) of the Basic Law prohibit the hindrance of marriage and family by disruptive interventions on the part of the State. For this reason, the Federal Constitutional Court declared the joint assessment of spouses (excluding splitting or divisor proceedings as in France) at that time to be incompatible with the Basic Law, as it was not a justified deviation from the principle of individual taxation. The Court furthermore found the joint assessment to also be unconstitutional based on the principle of equal treatment of men and women, according to which women must have the opportunity to earn an income with the same legal opportunities as any male citizen.

The importance of the protection of marriage and family also emerged in later decisions, such as, e.g. when the Federal Constitutional Court harnessed this provision to find that the minimum subsistence level of all family members was to be left tax-free, and additionally came to the conclusion that levying a tax on second residences must consider the special circumstances of married people (1 BvR 1232/00).

From a more general perspective, it is worth mentioning that the Court not only considered the provision of joint assessment to be “incompatible” with the Basic Law, but also made comments on how the taxation of spouses might come into conformity with the constitution. Such references appear repeatedly in the case-law of the Constitutional Court.  

The second decision Professor Lampert analysed concerned value-added tax (VAT). In Germany, until it was harmonised at the EC level, VAT was designed as an all-stage gross turnover tax, which placed single-stage companies in a worse position than multi-stage companies. What was remarkable about this decision was not the finding that the regulations were unconstitutional as such (especially because the legislature did not strictly follow its own rules). Indeed, the Federal Constitutional Court considered the consequences of the judge’s decision for the budget, and declared the VAT system to be valid until the new regulation (i.e. harmonisation) entered into force. This deviation from the principle that unconstitutionality leads to an ex tunc nullification was hotly discussed among the participants of the conference, as the principle is also found in the case-law of the French and Italian constitutional courts.

Afterwards, Professor Lampert shifted his focus to the principle of equality – the by far most significant fundamental right of the Basic Law when it comes to taxation – and addressed a decision by the Federal Constitutional Court on the unconstitutionality of the wealth tax (22 June 1995). Although a wealth tax as such is explicitly mentioned in the Basic Law, the way in which the wealth tax act  had been designed violated the general principle of equality. Thus, for example, capital assets were assessed at market value, while real estate was assessed at a significantly lower value – a flaw that also led to a finding that declared the unconstitutionality of the Inheritance and Gift Tax Act on the very same day.

The consequences are still evident today. While the legislature has reformed the inheritance and gift tax (these amendments, however, have themselves been declared unconstitutional on two additional occasions), the wealth tax is no longer levied. Incidentally, shortcomings in the system of real estate appraisal also led to the property tax being declared unconstitutional, making necessary a re-evaluation of around 40 million pieces of property.

The decision of 22 June 1995 is also worth mentioning due to the fact that the Federal Constitutional Court articulated the idea of the “half division principle” for the first time, which meant that the burden of income tax on the individual must be close to an equal division between private benefit and public benefit. The background to this frequently criticised statement was that the Court regarded the wealth tax as a form of income tax, and obviously found it logical to make concurring statements on the total burden of income tax levied under a redesigned wealth tax. Subsequently, the Federal Constitutional Court clarified that the “half division principle” had to be looked at in this particular context, but was not to be regarded as a cornerstone of the tax system as such.

Professor Lampert concluded his remarks with comments on the Court’s decision from 27 June 1991 on the taxation of interest, in which it declared part of the taxation of capital gains to be unconstitutional. Although the substantive law provisions were compatible with the principle of equal taxation, there was a “structural lack of enforcement”. Since the state had no possibility to verify the taxpayers’ information on capital income, taxpayers could evade taxation by not making a declaration without any significant risk of being detected. In the opinion of the Federal Constitutional Court, this deficit on the tax enforcement side led to the unconstitutionality of the substantive regulation. Tax justice thus rests on the pillars of the equality-compliant design of the tax law as well as the uniform enforcement of tax laws.


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