A couple from Bavaria fails with their lawsuit against the solidarity surcharge. The Soli is not unconstitutional, the highest German finance court decides. The federal government can continue to look forward to billions in revenue.
After a failed lawsuit against the solidarity surcharge, the federal government can continue to plan annual income in the tens of billions from the levy. The Federal Fiscal Court (BFH) in Munich dismissed a lawsuit against the solidarity surcharge. This is not unconstitutional, decided the highest German finance court.
With the support of the Taxpayers’ Association, the plaintiff couple from Aschaffenburg had requested a submission to the Federal Constitutional Court in Karlsruhe. “In the present case, the court is not convinced that the solidarity surcharge for 2020 and 2021 is unconstitutional,” said BFH President Hans-Josef Thesling. The lawsuit was directed against the tax assessments of these two years.
Mere doubts do not justify a referral to the Federal Constitutional Court, the finance judges said. According to the verdict, the federal government has conclusively explained that reunification will continue to cause increased financial needs, even if the earlier solidarity pacts for financing the uniform burdens have expired.
According to the BFH, the federal government had recently received eleven billion euros a year from the levy, which is now still being paid by higher earners and companies. The plaintiff and the taxpayers’ association argued that the solidarity surcharge was unconstitutional in two respects. The lawsuit relied on the fact that the original purpose of the Soli had ceased to exist: the levy was used to finance Solidarity Pact II, which expired at the end of 2019 and was intended to finance the development of infrastructure in East Germany.
However, the Federal Fiscal Court did not agree: the federal government may continue to raise the solidarity surcharge because of the increased financial requirements for the unit, even if there is no longer a solidarity pact. “A surcharge does not have to be temporary or levied for a short period of time in the first place,” Thesling said. In addition, the taxpayers’ association and the plaintiffs accused the federal government of violating the principle of equality in the Basic Law, because only a small minority of taxpayers have to pay the tax, but not the vast majority.
In the law on the return of the solidarity compensation from 2019, the then grand coalition decided that higher earners – the top 10 percent of incomes – must continue to pay the surcharge, the remaining 90 percent were exempt. The taxpayers’ association therefore criticizes the solidarity surcharge as a tax on the wealthy introduced through the back door. In this respect, too, the BFH did not follow the lawsuit.
