Traffic light tax experiments – where the government deliberately risks lawsuits

It is the E 400 meeting room of the Paul-Löbe-Haus next to the Reichstag in Berlin, where the members of the Finance Committee meet at the beginning of the week. A few days before the annual tax law is to be passed in parliament, the politicians want to question the experts themselves again.

But after an hour and a half of meeting in the government quarter, one impression remains above all: in the end, one professional group in particular can be happy about the short-term, sometimes hectic tax legislation of the traffic light factions: the lawyers. Welcome to the Tax Experimentation Laboratory Germany.

Complaints seem inevitable, especially in the case of the excess profit tax for mineral oil companies, which should not be called a tax out of consideration for the FDP and is therefore called the EU energy crisis contribution. According to the experts' statements, one has the impression that the European Union and the Ministry of Finance, which is responsible for the national implementation, are consciously accepting such lawsuits and even aiming for them.

"This is a very innovative approach," says David Hummel, professor of law at the University of Leipzig and speaker at the European Court of Justice, who is connected to the large video cube. With the regulation, the EU Commission is circumventing the unanimity principle within the European Union on tax issues. Although the energy crisis contribution is "nothing more than an additional income tax" for a small group of companies.

Hummel was asked about an article in EU law that allows the Council to deviate from procedures such as unanimity if "serious difficulties arise in the supply of certain goods, especially in the energy sector", as stipulated in Article 122 of the Treaty on the Functioning of the European Union.

Dietmar Gosch from the WTS Group, an association of tax consulting firms, also objects to the special levy on excessive profits from companies in the oil, natural gas, coal and refinery sectors, saying that “not the shortage, but the consequences” would be addressed. Article 122 is "the wrong groove", if he may say so, and thus an "unsuitable crisis management instrument", according to Gosch.

One could assume behind such statements that the senders fundamentally think little of an additional corporate tax. But even Christoph Trautvetter from the Tax Justice Network does not sound euphoric on Monday when asked about the additional tax. However, the proposed legislation does not go far enough for him.

"With this type of tax, where only profits are taxed in Germany, there is little to be gained," he says. The energy companies are too resourceful and too international when it comes to tax issues. According to the draft law, the expected additional tax revenue in 2022 and 2023 is between one and three billion euros.

The legal scholar Heribert Anzinger from the University of Ulm took an extremely pragmatic approach that afternoon. "We're breaking new ground in many places," he says. As Germany, you simply have to implement the EU requirements for the contribution to the energy crisis, and you can always voice criticism under constitutional and Union law later.

He also sees the planned taxation in connection with the gas and heat price brake as a legal experiment. "It's good to get started, to try it out," Anzinger says about the fact that higher incomes have to pay a tax on taking on the deductions to cushion the high gas prices in December.

Here, the experts mainly see ambiguities when it comes to who ultimately has to pay the tax. Florian Köbler, Federal Chairman of the German Tax Union, speaks of an "ominous end consumer" who should be taxed as soon as he belongs to the top ten percent of income earners in the country, those ten percent who have to pay at least part of the solidarity contribution.

As an example, Köbler cites the board member of a Dax group who lives under one roof with his student child. It can conclude the gas contract for the child and then, despite its high income, not have to pay taxes on the state aid.

At the end of the hearing, there are still many unanswered questions. Many will probably only be clarified in the next few years - then in court.

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