Federal Constitutional Court, 06.06.2013, Ref.: 2 BvR 909/06 et al.
German income tax law, including German income tax law, is governed by the individual principle. This systemic principle of German tax law states that German tax laws are generally applied separately to each taxpayer and that income tax is therefore only assessed for the individual taxpayer on the basis of their taxable income.
However, individual assessment is interrupted by spousal splitting in accordance with § 26 EstG.
Accordingly, spouses can choose between individual assessment (Section 26a) and joint assessment (Section 26b) if
- are both subject to unlimited income tax liability within the meaning of § 1 (1) or (2) or § 1a
- they are not permanently separated and
- they met the conditions set out in points 1 and 2 at the beginning of the assessment period or during the course of the assessment period.
According to the highest court rulings of the Federal Fiscal Court (see BFH judgement of 20 July 2006, case reference: III R 8/04), registered civil partnerships were not previously entitled to joint assessment because the legislator had expressly restricted this procedure to spouses in accordance with §§ 26, 26b EStG and partners in registered civil partnerships were not covered by the wording of the provisions.
The corresponding application of the provisions (Sections 26, 26b EStG) was also not required in the absence of an unintentional loophole in the case law of the highest courts.
Contrary judgements of individual Tax courts were therefore not applied by the tax authorities.
The Federal Constitutional Court has now ruled in the above-mentioned judgement that registered civil partnerships must be treated in exactly the same way as marriages with regard to spousal splitting.
The unequal treatment practised to date is therefore unconstitutional.
The court also ruled that the legislator must amend the laws with retroactive effect from 1 August 2001 and that the existing regulations on spousal splitting for married couples must be applied to registered civil partnerships on a transitional basis until new regulations are drawn up.
Source: Federal Constitutional Court
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