Order of 24 July 1957

Reasons:

A.

1

Pursuant to § 1 of the Hamburg Dog Tax Act (hamburgisches Hundesteuergesetz ‒ HuStG HA) of 4 March 1927 ([...]) in the version of 25 September 1947 ([...]), dog owners within the city limits of Hamburg must pay a dog tax. Upon payment of the tax, the respective dog is assigned a tax number, which is valid for one fiscal year and must be displayed on the dog’s collar (§ 10).

2

Since 1946, the Hanseatic City of Hamburg has levied a special fee for issuing the assigned tax numbers: owners were charged 3 German marks (Deutsche Mark ‒ DM) per draft or guard dog and DM 5 for any other type of dog. The applicant in the initial proceedings owned a guard dog and successfully brought his claim before the Hamburg Higher Administrative Court: By judgment of 31 January 1950, the court found that the Hanseatic City of Hamburg was obliged to issue the tax number assigned to the applicant’s dog free of charge in 1948 and 1949, given the absence of a legal basis for levying such a fee on the applicant.

3

The Dog Tax Act of 9 November 1950 ([...]) increased the tax rates. It included the following provisions:

4

Ԥ 27 Transitional Provisions

5

(1) The Dog Tax Act of 4 March 1927 in the version of the Act of 25 September 1947 is amended as follows: Regardless of the duration of the dog ownership, the tax rates under § 2(1) and § 2(2) are increased by DM 5 and the tax rate under § 3 by DM 3 for the fiscal years of 1948 and 1949.

(2) Any administrative fees charged for the issuance of an assigned dog tax number must be offset against this tax increase. Fees which were due and paid in Reichsmark must be offset against any tax liability based on an exchange rate of 1 Reichsmark to DM 1.

6

§ 28 Entry into force

7

(1) With the exception of the provisions under § 27, this Act enters into force with retroactive effect from 1 April 1950.

(2) The provisions under § 27 enter into force on 1 April 1948.

(3)...’ [original quote in German]

8

Based on the Dog Tax Act of 9 November 1950, it was determined that the applicant in the initial proceedings was liable to pay a dog tax of DM 20 for the fiscal year 1950/51. Given that DM 4 had already been offset from the tax, there was a remaining amount due of DM 16. The applicant filed an action in the administrative dispute proceedings, requesting the dog tax assessment be annulled to the extent that the remaining amount due for the time period between 1 April 1950 and 31 March 1951 exceeded DM 10. In justifying his claim, the applicant submitted that the fees of DM 6 ‒ which he had wrongly been charged in 1948 and 1949 ‒ had to be offset against his new tax liability for 1950/51, meaning that there was only an amount of DM 10 remaining for him to pay. […]

9

The Land Administrative Court (Landesverwaltungsgericht) rejected the action. Following the applicant’s appeal on points of fact, the Higher Administrative Court stayed the proceedings pursuant to Art. 100(1) of the Basic Law (Grundgesetz ‒ GG). The Higher Administrative Court considers §§ 27 and 28(2) of the Dog Tax Act of 9 November 1950 to be in violation of the Basic Law because they have a ‘real’ retroactive effect, i.e. the statutory provision applies to actions or events that were concluded in the past. [...]

10

[...]

11

Pursuant to § 82(1) and (3) in conjunction with § 77 of the Federal Constitutional Court Act (Bundesverfassungsgerichtsgesetz ‒ BVerfGG), the Bundestag, Bundesrat, the Federal Government, the Senate and the Parliament of the Free Hanseatic City of Hamburg as well as the parties in the initial proceedings were given an opportunity to submit a statement. The tax authority of the Hanseatic City of Hamburg has made use of this opportunity, asserting that the challenged provisions are in line with the Basic Law.

B.

I.

12

[...]

II.

13

The application of the Hamburg Higher Administrative Court is admissible, but unfounded. §§ 27 and 28(2) of the Hamburg Dog Tax Act of 9 November 1950 are compatible with the Basic Law.

14

Given the unique features of the present case, there is no need for the Federal Constitutional Court to engage in comprehensive analysis of the multi-layered issue of the retroactivity of laws.

15

The Higher Administrative Court considers the retroactive provisions at issue here to be unconstitutional on the basis of Art. 2(1) of the Basic Law. This provision guarantees the general freedom of action subject to the limits imposed by the constitutional order. In the present case, possible concerns in terms of retroactivity rest on the constitutional principle of the rule of law. A violation of the rule of law principle would result in the unconstitutionality of the Hamburg Dog Tax Act and a possible violation of Art. 2(1) of the Basic Law.

16

There is no […] categorical prohibition of retroactivity under the principle of the rule of law, even when the actions or events that are being regulated retroactively were completed in the past (cf. BVerfGE 1, 264 <280>; 2, 237 <264 ff.>; 3, 58 <150>). The rule of law not only requires foreseeability, but also legal certainty and substantive correctness, or justice. Taking the different aspects of the rule of law ‒ even just these three aspects ‒ equally into account is not always possible for the legislator. Moreover, the principle of the rule of law does not embody requirements or prohibitions that are spelled out in full detail and have constitutional status. Rather, it is a constitutional principle requiring specification based on the circumstances of the specific case. Such specification must guarantee the fundamental elements of the state under the rule of law and the rule of law principle as a whole ([…]). Only by reviewing the specific case is it possible to decide whether the relevant statutory provisions are unobjectionable.

17

A tax act imposing a retroactive effect certainly does not exceed the limits imposed by the principle of the rule of law if the financial burden is foreseeable, justified on substantive grounds and of no significance in the specific case.

18

In the present case, a fee for issuing the dog tax stamp had been levied, since 1946, based on § 1 of the Hamburg Administrative Fee Code (hamburgische Verwaltungsgebührenordnung ‒ VGebO) of 31 May 1940. Only by the Higher Administrative Court’s judgment of 31 January 1950 did it become clear that the Hamburg Administrative Fee Code offered no legal basis for levying such fee. In its reasoning, the Court held that the dog owner neither ‘prompts’ the issuance of the tax stamp within the meaning of the Hamburg Administrative Fee Code nor can he draw any ‘direct advantage’ from it. Therefore, in reality, it was not a fee that was being levied, but rather an increased tax for which, again, there was no legal basis. According to the Higher Administrative Court, this conclusion is confirmed by the fact that the Hamburg Dog Tax Act itself only provides for charging a fee for the replacement of a lost tax stamp. This detailed judicial reasoning shows: levying the fee was not evidently unjustified to an extent that citizens could have had the legitimate expectation in 1948 and 1949 ‒ the period to which the retroactive effect applies ‒ that they were not obliged to pay the fee.

19

The retroactive effect is also well-founded on the merits. Following the Higher Administrative Court’s judgment, the past circumstances themselves required statutory regulation. Given that the state had a legitimate expectation in regard to the fee income, the legislator’s decision to create a different type of legal basis for such income following the Higher Administrative Court’s judgment was adequate ‒ even more so in light of the disadvantages to simply reimbursing the fees. The large number of small amounts ‒ some of which would have had to be converted ‒ hardly would have been worth the postage, and most certainly not the administrative burden. The sums in question would have been of no significance for the affected individual, both in absolute terms and in terms relative to the other costs that come with owning a dog. This is precisely the reasoning on which the legislator based its order of retroactivity ([…]).

20

The retroactive effect of the tax increase also does not violate the rule of law principle insofar as the impermissibility of levying the fee had been established in a final manner. The principle of legal certainty, to the extent that it finds its application in the form of res judicata, is primarily directed against reopening a matter already decided by the courts. The principle of legal certainty cannot simply bar the legislator from regulating a subject matter ex post once a judicial decision is made. It is precisely the principle of the rule of law that requires the possibility of reviewing laws as to their constitutionality and the conduct of the administration as to its lawfulness. The Basic Law has given effect to this requirement in an extensive manner. This necessarily means that the legislator may find that, following judicial review, a subject matter that the legislator or the administration considered to be subject to a certain set of rules is not in fact subject to such rules or the rules are different from those assumed by the legislator. It is thus precisely the principle of the rule of law that may prompt the legislator to enact retroactive laws.

21

There do exist outer limits, however, that prohibit, for instance, retroactively legalising arbitrary conduct of the administrative authorities. This is not the case here. Rather, the present case is one in which a legal error produced disorder, which needed to be brought back into order.

22

It follows that the principle of the rule of law has not been violated.

23

Neither Art. 3(1) nor Art. 103(2) of the Basic Law are infringed if the retroactive tax liability of those individuals who paid the fee prior to the currency reform is considered offset by the payment in Reichsmark. Given the change in currency, there is a substantive difference between those payments that were made prior to the currency reform and those made afterwards. They are thus not comparable within the meaning of Art. 3(1) of the Basic Law. In no way can Art. 103(2) of the Basic Law ‒ which explicitly only concerns criminal legislation ‒ be analogously applied to a tax law provision, such as § 27(2) of the Hamburg Dog Tax Act, which is insignificant in comparison for the individual taxpayer.