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Please note that only the German version of this decision is authoritative. Further information can be found here.
This is an abstract from the CODICES database maintained by the Venice Commission. Please cite as follows: Abstract of the German Federal Constitutional Court’s Order of 13 April 2017, 2 BvL 6/13.
Abstract
Second Senate
Order of 13 April 2017
2 BvL 6/13

Headnotes (not official):

1. Regarding those taxes and tax types listed in Articles 105 and 106 of the Basic Law, the Basic Law uses defined tax types.

 

2. Within the defined tax types, which are set forth in Articles 105 and 106 of the Basic Law and which must be interpreted broadly, the legislator is free to “invent” new taxes.

 

3. The attribution of legislative competences to the Federation and the Laender in Article 105 of the Basic Law in conjunction with Article 106 of the Basic Law is definitive. A general right to invent taxes which exceed the scope of tax types listed in Article 106 of the Basic Law cannot be derived from the Basic Law.

 

4. Taxing the business consumption of a mere means of production is generally not compatible with a legislative concept of taxes on consumption which are designed to gain access to the private use of income.

 

5. The nuclear fuel tax is not a tax on consumption within the meaning of Article 106.1 no. 2 of the Basic Law.


Summary:

I. Pursuant to the Act on Nuclear Fuel Tax of 8 December 2010 (hereinafter: the “Act”), nuclear fuel used for the commercial generation of electric power was subject to taxation. The Act imposed taxation on processes in which the self-sustaining nuclear chain reaction was triggered before 1 January 2017. According to the legislator, the tax constituted “a tax on consumption within the meaning of the Fiscal Code”. The operators of nuclear power plants were the tax debtors. The tax revenues from the nuclear fuel tax for the federal budget amounted to a total of EUR 6,285 billion between 2011 and 2016.

In 2011, the plaintiff of the initial proceedings inserted new fuel elements into a nuclear power plant it operated, triggered a self-sustaining chain reaction and paid, after a respective tax return, a tax amount of about EUR 96 million. Afterwards, it took legal action against the tax return. The Hamburg Finance Court suspended the proceedings and referred the question of whether the Act was incompatible with the Basic Law to the Federal Constitutional Court.

II. The Federal Constitutional Court decided that the Act was incompatible with Article 105.2 in conjunction with Article 106.1 no. 2 of the Basic Law, and void. The federal legislator lacked the legislative competence to enact this law.

 

The decision is based on the following considerations:

The constitutional provisions of the Basic Law governing public finances (Finanzverfassung) are cornerstones of the federal order. They constitute a coherent framework and procedural system and are designed with a view to clearly define forms and commit to these forms. Strict compliance with the areas of competence assigned to the Federation and the Laender under the Basic Law with regard to public finances has a paramount significance for the stability of the federal system. In addition to their ordering function, the constitutional provisions governing public finances serve the function of protecting and limiting which prevents the regular legislator from exceeding the limits set for it.

 

Article 105 of the Basic Law provides the basis for the legislative competences of the Federation and the Laender with regard to taxes. Article 106 of the Basic Law attributes the revenues of certain taxes either to the Federation, or the Laender, or jointly to both. New taxes must be assessed with regard to whether they are compatible with the characteristics of the tax types defined in Articles 105 and 106 of the Basic Law.

 

Neither the Federation nor the Laender have the right to freely invent taxes; only such taxes may be introduced that generate revenues which are allocated to the Federation, the Laender or both of them jointly in Article 106 of the Basic Law. Otherwise, the allocation of the new tax type’s revenues would be unclear. The regular legislator may not “force” the constitution-amending legislator to pass a law by first introducing a new tax type which then requires an amendment to Article 106 of the Basic Law.

 

Any uncertainty regarding the allocation of revenues can lead to distortions within the fiscal system and thus be contrary to its function of establishing peace and avoiding unnecessary conflicts between the Federation and the Laender. The coherence and the systemising function of the constitutional provisions governing public finances safeguard public trust in only being burdened according to the constitutional framework. Protecting individuals from an incalculable variety of taxes is an important purpose of the provisions governing the legislative competences regarding tax law. A right to invent taxes would not be in accordance with these standards.

 

With regard to the question of whether the nuclear fuel tax can be considered a tax on consumption, the necessary overall assessment led to the result that the central criterion of a tax on consumption, i.e. the taxation of the private use of income, is lacking. The taxation of a mere means of production is contrary to this tax type. The explanatory materials to the draft of the Act also do not support the argument that the legislator intended to link the taxation to the private use of income.

 

As the Act violates Article 105.2 in conjunction with Article 106.1 no. 2 of the Basic Law it had to be declared void. An exception to the retroactive effect of the decision is not warranted in the present case.

 

III. Justices Huber and Müller gave a separate opinion. They agree with the result of the Panel majority’s decision, but not with the reasons on which the decision is based.

Their opinion is based on the following considerations:

 

Article 105 of the Basic Law contains a provision on the attribution of legislative competences in the area of tax law, with Article 105.2 of the Basic Law subjecting “other taxes” to the concurrent legislation of the Federation. It cannot be inferred from the wording of the provisions that only the taxes listed in Article 106 of the Basic Law were meant. Legislative structure, purpose and history of the constitutional provisions governing public finances also suggest recognition of the concurrent competence of the Federation pursuant to Article 105.2 of the Basic Law.

 

While Article 105 of the Basic Law attributes legislative competences in the area of tax law, Article 106 of the Basic Law serves to allocate the tax revenues to the Federation, the Laender or both jointly. There are no apparent reasons for inferring limitations to the legislative competences based on the allocation of tax revenues in Article 106 of the Basic Law.

 

It is not comprehensible that the competence of the legislator deciding on tax matters should not include the allocation of tax revenues. When introducing a new tax which is not listed in Article 106 of the Basic Law, the regular legislator can also decide on the allocation of the revenues. In addition, the requirement of the Bundesrat’s consent to tax legislation can serve to prevent the Federation from one-sidedly accessing tax revenues and as well as a “competition of tax inventions”.

 

The requirement of the Bundesrat’s consent pursuant to Article 105.3 of the Basic Law must be extended, beyond its wording, to cases in which the Federation creates tax revenues for the first time, by virtue of its concurrent legislative competence, and thereby excludes the Laender.

 

According to these standards, the Federation did have a concurrent legislative competence for the nuclear fuel tax. However, the Act is formally unconstitutional and void as it was enacted without the Bundesrat’s consent.

 

 

Further information can be found in the CODICES database, as soon as it has been processed.

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Additional Information

ECLI:DE:BVerfG:2017:ls20170413.2bvl000613

Please note that only the German versions are authoritative.