News - Germany

Germany - March 2010

Germany: German unification "solidarity surcharge" held to be unconstitutional

The Court has found that the additional surcharge to income and corporation tax ("Solidaritätszuschlag") for financing the costs of German Unity is not in accordance with German law as it stood in 2007


The additional solidarity surcharge is levied at a rate of 5.5% of the amount of income tax or corporation tax payable, so the amount of the surcharge will vary depending on the particular circumstances.  It has been in existence since 1991 and was implemented in order to finance German Unity. However, the Tax Court has held that the creation of an additional contribution beyond the existing tax for the financing of public expenditures is unconstitutional.

The decision of the Lower Saxon Tax Court, as Court of First Instance, will lead on to a decision of the German Federal Constitutional Court.  In accordance with a decree of German tax ministry, tax assessments of the solidarity surcharge are provisional, at least until the final decision of the Federal Court has been delivered.

This decision is the first step in a legal process which may take several years to conclude. Although the surcharge assessments are only provisional, in the meantime taxpayers must still pay these. As and when a decision of the Federal Court is forthcoming, depending upon the outcome, these may subsequently be reimbursed if the Federal Court decides to repeal the surcharge with retrospective effect.


Finance Court Niedersachsen: Decision dated 25.11.2009 (7 K 143/08)

Art.  100 GG, Solidaritätszuschlagsgesetz

For further information or to discuss any of the issues raised, please contact Joachim Menz ( on +49 89 24 22 30 0.

This article was produced by, and re-produced with kind permission of, our correspondent firm in Germany, Keller Menz Rechtsanwälte.

Keller Menz