Fiscal Court of Hamburg Issues Order for Reference to BVerfG Regarding Nuclear Fuel Rod Tax

The Fiscal Court of Hamburg issued an order for reference (Vorlagebeschluss) to the Federal Constitutional Court (BVerfG) in a case concerning the nuclear fuel rod tax that applies since 1 January 2011. The competent 4th Senate was convinced of the unconstitutionality of the underlying nuclear fuel rod tax law. Therefore it referred the case to the Federal Constitutional Court, which has the sole competence to decide about the unconstitutionality in a so-called Normenkontrollverfahren (Concrete Review Proceedings of the Constitutionality of Statutes – Art. 100 Basic Code), the Fiscal Court informed in a press release.

The Nuclear Fuel Rod Tax Act (KernbrStG) applies since 1 January 2011. It is a consumption tax on newly installed plutonium and uranium fuel rods. The law was adopted in 2010 and formed part of the Conservative/Liberal Energy Concept 2010 with which the government extended the operating times of the 17 German nuclear power plants. Nuclear power was then intended to provide a bridging technology for a future renewable energy supply. After the nuclear accident in Fukushima in March 2011 the government reversed its nuclear policy. It proposed comprehensives legislative changes, including a nuclear phase-out until 2022 and the immediate shut down of eight nuclear power plants. The package was adopted by Parliament (Bundestag) and the Federal Council (Bundesrat) in mid-2011. The Nuclear Fuel Rod Tax Act was, however, not repealed. In 2010 the government expected to collect EUR 2.3 billion per year between 2011 and 2016 from the nuclear fuel rod tax.

Plaintiff in the case that is pending at the Fiscal Court in Hamburg had paid the tax in accordance with the law after an exchange of nuclear fuel rods, but sought preliminary relief and brought legal action. In September 2011 the Fiscal Court of Hamburg granted preliminary relief, expressing serious doubt as to the constitutionality of the KernbrStG. In a decision of 9 March 2012 the Federal Fiscal Court (BFH) reversed this decision, arguing that the unconstitutionality could not be decided on in a preliminary injunction procedure. In two other preliminary injunction proceedings against KernbrStG, the Fiscal Court of Munich also had serious doubt as to the legality of the KernbrStG, while the Fiscal Court of Baden-Württemberg decided otherwise.

The written decision concerning the Fiscal Court of Hamburg’s order of the main case for reference to BVerfG is not yet available. However, the main arguments according to the court’s press release published after an oral hearing are the following.

The 4th Senate is still convinced of the formal unconstitutionality of the KernbrStG. In its opinion it is not a consumption tax in the sense of the fiscal concept of the German constitution (Basic Code), therefore the German Federation did not have the right to enact the tax, nor could the German Federation derive the right of a sole competence for the law from other (constitutional) sources. Typically, consumption taxes had to be borne by the consumers, even if they were collected from trade and industry, they had to be ultimately passed on to the consumer. This was, however, not the case with the nuclear fuel rod tax, the Fiscal Court of Hamburg held. The explanatory memorandum for the KernbrStG already did not see much room for the utilities to pass on the tax, which had been confirmed by the practice in the energy markets. Hence, the law intended to skim off profits made by the utilities. Yet legally only income or profit taxes, for which the German Federation did not have the sole competence, could do so, the court further said.

According to the press release the Fiscal Court did not elaborate on the constitutionality of the KernbrStG under other aspects like an infringement of Article 3 (equality before the law) or Article 14 (guarantee of property), saying these aspects would be reviewed in the proceedings before BVerfG. For the time being, the court also postponed a review of the KernbrStG against overriding European law like state aid provisions or the Euratom treaty.

The amounts in dispute in the cases pending with the Fiscal Court of Hamburg against the nuclear fuel rod tax concern various nuclear power plants and total EUR 1.5 billion, the court informed, explaining that the 4th Senate had the competence to decide these matters not only for Hamburg, but also for the states of Lower Saxony and Schleswig-Holstein.

Source: Fiscal Court of Hamburg (FG Hamburg 4. Senat, Beschluss vom 29.01.2013, 4 K 270/11)

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