Fundamental tax Reform : all roads Lead back to Karlsruhe?

there Are in the Reform of the land tax-a solution that ends up again in front of the Federal constitutional court? The question also can not answer Raoul riedlinger and Hartmut Schwab. The President of the Federal chamber of tax advisers, and his Deputy know only one thing: From the point of view of his profession, the solution should be quite safe, and as little contentious as possible. This demand raised on Thursday in Berlin.

On the art piece, which is exactly the match finished, try the German Finance Minister, Olaf Scholz (SPD), and his international colleagues now for almost a year. In April 2018, the judges ranked namely the previous scheme due to the completely outdated and to the West and the East shared unit values as not in conformity with the Constitution. Since it helped a little that this reason had tax base, at least one advantage: it led hardly payers once the legal disputes between the tax authorities and the single tax, because the thing on the Basis of the unit values from 1964 (West) and 1935 (East) with time was recorded. Only now, a tax on land and buildings underlying a rating, at some point, with the equality and principle of equal treatment of the basic law is in conflict, if they are rated for too long, too different and too far from the current market values deviates.

Reform under the pressure of time

And because this is the case, the legislature will now pick up. However, the dispute increases, the closer the of the Karlsruhe judges set deadlines: by the end of 2019 a new. At the beginning of February, Scholz and his international colleagues have agreed on some key elements, which are optically close to the value-based model, which was submitted to the Federal Minister of Finance in November. Such a solution, which continues to be the land and buildings values on the scale, now of course updated, in favour of the majority of the state governments and the coalition in the Federal government, the SPD. Three value components was provided by Scholz: net rent (in the case of privately used real estate fictitious according to the regional Statistics), soil guideline values and the age of the building. The data are generally available, would have to be covered, of course. For this reason, came to the area. And because it should be, case by case assessment.

In the vertices of all three components. Just one more: justice in each individual Case. The majority of the Countries Ministers too expensive and too bureaucratic. Too many officials would have been bound, so your point of view, so that in the coming years. And they feared that the Case could be contentious. The pressure from the countries Scholz gave in and agreed to try it instead, with consolidation into a Lump sum. So instead of actually agreed net rent, only a regional average is to be taken for rent, arising from the microcensus. And in the case of the standard land values, and will draw well on large areas or to local average values.

dispute-prone, because of the lump?

But this reduces the dispute susceptibility may not. Anyway, this is the concern of the Federal chamber of tax consultants. As a result of the consolidation into a Lump sum of the traffic values of the individual properties did not reflect the reality, complain about Riedlinger and Schwab. In addition, the administration would be relieved, for companies and private persons, it would remain but at a high cost. The consulting bills are likely to be higher. Any value based in the end, is somehow voidable, Schwab, to bear in mind that leads in Augsburg, Germany, a firm that works largely for medium-sized companies. And each model will produce winners and losers, because the real estate values in the past few decades, have evolved a quite different from the unit values of paths. The possible deviations from the current tax burden Schwab estimates that up to 25 percent above and below. This is causing resentment.

So it is no wonder that the professional Association for a model with no value components, to pronounce. A pure surface model is propagated mainly of Bavaria and of the Union faction in the Bundestag. The Bavarian Prime Minister Markus Söder (CSU) does not want to leave, even if he is in the group of Countries so far, not a big support. The only potential comrade, the Hanseatic city of Hamburg, has embarked on the key issues paper. However, Hamburg's Senator of Finance Andreas Dressel (SPD) recalled recently in a letter to the Federal Minister of Finance, that it has preferably, on the Alster always be a surface model (Scholz, no news, until a year ago, that was his line as the mayor of Hamburg, Germany). In the Letter, Dressel requested further Changes to the white paper, because Hamburg, especially the "inclusion of the land value in the estate tax calculation is more extremely critical". Because the land prices to rise there as in other large cities, in some neighborhoods exorbitant and drive to the property tax burden to the top.

surface model by Federal law?

A surface model is relatively unbureaucratic, because thanks to the lack of standards of value, only the ground and building surfaces again would have to be recorded, but the tax authorities usually already known. There is, however, a significant legal risk: Due to a fundamental change in the law in 1994, a fundamental tax reform by the Federal law only, before a constitutional complaint for sure, if the Bundestag and the Bundesrat decide for a value - based model, as in the past, so to speak, the old law only is to be amended. In the case of a taxation according to area, however, could be a complete rewrite of the tax – and then alone the country as a legislator would be appointed. The property tax flows alone, the municipalities, the Constitution, are legally assigned to the countries.

professors for countries of responsibility

A group of Law and Economics professors wrote to Scholz for this reason, also a letter, including prominent scientists such as Lars field from Freiburg, Johanna Hey from Cologne or Christian forest Hoff from Berlin. They also call for a Reform, "the substantial simplification allows". The associated right to exclude the risk, they argue that the Federal government waive the new rules and the matter should be handed over to the countries. "The country days know best the situation of their communities and to the economic conditions," write the professors. "The citizens, the administration and the – very under pressure – German federalism would be served in a way that hurts the Federal government." At least in the Bavarian state Chancellery you a race for an open door.

dispute property tax value, not to scale

of The tax advisors, so much so, they are insisting on simplicity and legal certainty, miss this variant, however, also, anyway, when it comes to companies that have, in several countries, actively farms or real estate. Then, their colleagues and their customers would have to be considered in the most extreme case, 16 different laws in different Countries, to give Schwab and Riedlinger. And if all of them are really quite safe and constitutional, is the question. You see: Scholz and his colleagues are faced with a task, more commonly known as squaring the circle.