Federal Fiscal Court: Complaint against solidarity surcharge dismissed

The Federal Fiscal Court does not consider the solidarity surcharge in the form that has been in force since 2020 to be unconstitutional. A corresponding lawsuit was dismissed. This means that the federal government can continue to plan billions in revenue.

The Federal Fiscal Court (BFH) dismissed an action against the solidarity surcharge. This is not unconstitutional, decided the IX. Senate of the highest German finance court. This means that the federal government can continue to plan annual income in the tens of billions from the levy.

With the support of the taxpayers’ association, the plaintiff couple from Aschaffenburg had requested a submission to the Federal Constitutional Court. “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.

Income recently at eleven billion euros

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 collected eleven billion euros a year from the levy, which is now only 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.

Surcharge may also be levied without a solidarity pact

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.

With the law on the return of the solidarity compensation, the then grand coalition decided that higher earners – the top ten 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.

The judges see things differently: there is no violation of the principle of equal treatment. From “social points of view” it is permissible that only richer taxpayers pay the solos.