In the course of ongoing litigation, any court may submit to the Federal Constitutional Court for decision a relevant legal provision which the court considers unconstitutional. Therefore, the financial courts and the Bundesfinanzhof also have this possibility. We explain the procedure for submission to the Federal Constitutional Court and what impact it has on the ongoing procedure before the tax courts.

The specialised courts should examine standards comprehensively for their constitutional conformity. However, they must not declare a norm null and void and reject it. This competence lies solely with the Federal Constitutional Court for the preservation of legal unity and respect for the legislature, the so-called monopoly of rejection of the Federal Constitutional Court. Therefore, it must be possible for the specialised courts to submit a law to the Federal Constitutional Court for review. If a specialised court submits a standard to the Federal Constitutional Court for decision, the Federal Constitutional Court shall decide on the constitutional conformity of the corresponding standard. This procedure is called concrete standards control within the meaning of Art. 100 paragraph 1 GG.

In addition to the constitutional complaint, the concrete control of standards is an effective way to clarify the constitutionality of a law in tax law. In contrast to the constitutional complaint, however, the court files the norms. Therefore, the complainant does not bear the costs of this procedure either. However, this is different with the constitutional complaint.

In addition to the preliminary procedure before the Federal Constitutional Court, there is the ongoing procedure before the Finance Court. This shall be suspended upon submission to the Federal Constitutional Court. It will therefore not be decided until the question referred has been clarified.

In order for the Federal Constitutional Court to decide on the bill at all, there must be a permissible and well-founded order for a bill. This must be done by the court. The submission to the Federal Constitutional Court is only possible following a Senate decision and never by a single judge. Therefore, the court must make a corresponding decision and to this extent hand the matter over to the Federal Constitutional Court. Furthermore, the court must be convinced that the law is unconstitutional.

The requirements for the justification of the submission to the Federal Constitutional Court are similar to those for a constitutional complaint. The reasoning must indicate the extent to which the current proceedings depend on the validity of the legislation in question and with which constitutional rules it is incompatible in the opinion of the General Court. Therefore, the court must give a comprehensive constitutional assessment of the problem in the order for reference. To this end, the facts must also be set out in their entirety. Everything is understandable. Therefore, the justification of the submission is a high admissibility condition. The justification requirements increase if a legal question has already been decided by the Federal Constitutional Court.

However, the high justification requirements discourage many financial judges from submitting a bill to the Federal Constitutional Court. In particular, the Federal Constitutional Court dismisses many drafts as inadmissible, so that drafts from the Federal Finance Court (BFH) have already been rejected as inadmissible. It is therefore common for specific standards control procedures to be lost. Inadmissibility also occurs if the legal opinion of the referring court is manifestly untenable or if the submission concerns only preliminary constitutional questions of the main proceedings. The referral to the Federal Constitutional Court also fails because the referring court has not interpreted the rule in question in accordance with the constitution, has not sufficiently proven the relevance of the decision or the question has already been the subject of a referral to the Federal Constitutional Court. It is also often misunderstood that the submission to the Federal Constitutional Court should be the last resort and that other possibilities for clarification of the question must be examined and discussed beforehand.

The fulfilment of the justification requirements is pre-examined by the Chamber at the Federal Constitutional Court. It may, on the basis of a unanimous decision, reject the referral as inadmissible. However, if the Chamber does not make a unanimous decision or the bill comes from the BFH, the bill remains admissible until the Senate has decided. However, the decision is indisputable in all cases.

If the submission to the Federal Constitutional Court is granted, the Federal Constitutional Court can declare the law null and void. Instead, the declaration of incompatibility occurs if several possibilities are considered for the elimination of the constitutional violation and therefore the legislature must take action. The decision has the force of law and therefore applies to all taxpayers, courts, tax offices and constitutional bodies. Nonetheless, unlawful tax rulings remain in force. On the other hand, tax notices issued on the basis of a system declared incompatible but still in force are usually issued provisionally.

However, the tax officer must nevertheless apply a law he considers unconstitutional. However, he has to demonstrate an unconstitutional state to the higher authority. The aim of this is to bring about an abstract control of norms by the state government or the federal government.

Tax Specialists and Tax Advisors for Tax Disputes

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