098. Constitutional Challenges To German Tax Laws

KPMG Germany Webpage
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We report in this article on constitutional challenges raised in recent weeks against various aspects of the German tax laws.

As a general matter we note that the German Federal Constitutional Court, which has subject matter jurisdiction to review the compatibility of federal or state law with the German federal constitution, has in the past often held German tax laws to be unconstitutional. The most far-reaching decision of this sort declared the German net worth tax and inheritance tax to be unconstitutional with respect to their real estate valuation provisions (BVerfG BStBl II 1995, 655 - 22 June 1995; see articles nos. 25 and 58, sec. VIII and IX). This decision is at issue in the cases reported on in sections 2 and 3 below. Prior to the commencement of this series of articles in the summer of 1995, the Federal Constitutional Court also held the zero bracket amounts and the