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Article no. 76 explained a controversy surrounding assessment and collection of the net worth tax for periods prior to 1997. A ruling by the Federal Constitutional Court dated 30 March 1998 (BB 1998, 1044) has now put an end to the controversy. The court refused to hear a case brought by a taxpayer challenging the validity of assessment notices issued in June 1997 for the assessment periods 1993 and 1995.
In June 1995, the Federal Constitutional Court had ruled that the net worth tax would become unenforceable as of 31 December 1996 unless timely amended to bring its provisions into line with various constitutional requirements. The government wished to repeal the net worth tax entirely but could not muster the necessary votes in the Federal Council and so decided to let the law lapse under the terms of the June 1995 court ruling.
In refusing to hear the taxpayer's case, the Federal Constitutional Court stated that the deadline specified for amendment of the net worth tax in its June 1995 ruling referred to the time as of which the net worth tax must accrue, not the date by which administrative action to assess and collect the tax need be taken. Otherwise, the court said, the net worth tax for years prior to 1997 would be paid by certain taxpayers and not by others according to the speed with which the tax authorities worked and a variety of other accidental factors. This would violate the principle of equal taxation.
Disclaimer and Copyright
This article treats the subjects covered in condensed form. It is intended to provide a general guide to the subject matter and should not be relied on as a basis for business decisions. Specialist advice must be sought with respect to your individual circumstances. We in particular insist that the tax law and other sources on which the article is based be consulted in the original, whether or not such sources are named in the article. Please note as well that later versions of this article or other articles on related topics may have since appeared on this database or elsewhere and should also be searched for and consulted. While our articles are carefully reviewed, we can accept no responsibility in the event of any inaccuracy or omission. Please note the date of each article and that subsequent related developments are not necessarily reported on in later articles. Any claims nevertheless raised on the basis of this article are subject to German substantive law and, to the extent permissible thereunder, to the exclusive jurisdiction of the courts in Frankfurt am Main, Germany. This article is the intellectual property of KPMG Deutsche Treuhand-Gesellschaft AG (KPMG Germany). Distribution to third persons is prohibited without our express written consent in advance.
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