Video: Federal Fiscal Court surprisingly confirms solidarity surcharge

STORY: On Monday, the Federal Fiscal Court in Munich confirmed the legality of the solidarity surcharge for income and corporation tax. Volker Pfirrmann, court spokesman: “The Federal Fiscal Court decided that the solidarity surcharge in 2020 and 2021 was not yet unconstitutional. Because in those years there was still a special financial burden in connection with German reunification. However, the solidarity surcharge must not be raised forever. In 2024, the legislature must examine whether the conditions for the solidarity surcharge are still met.” The decision of the Federal Fiscal Court may have surprised many experts. The taxpayers’ association had also expected the court to have the solidarity surcharge reviewed by the Federal Constitutional Court. Reiner Holznagel, President of the Taxpayers’ Association: “It was and is about order in tax law for us. We need clarity here. We need transparency. The solidarity surcharge has turned out to be a hidden wealth tax. It should be titled that way. But we have to be very careful, because many people who are not rich continue to pay the solos, for example through the withholding tax, if they have little investment income. So at this point you have to say clearly that it’s a little hazy how high the load is. And that’s why we wanted to clarify this. And that’s why we will continue to think about whether we should stop at this point. Since 2021, only top earners and corporations have had to pay the surcharge of up to 5.5 percent of income and corporation tax. About 90 percent of taxpayers are exempt. The couple suing before the Federal Fiscal Court had therefore argued that this was unlawful unequal treatment of all taxpayers. In addition, the currently applicable solidarity surcharge was introduced in 1995 to finance German unity. With the expiry of the Solidarity Pact II at the end of 2019, the solidarity contribution is therefore also obsolete. This opinion was widely shared in the legal world.

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