Munich, 26 April 2010 – World Tax Service WTS considers the minimum taxation for trade tax to be unconstitutional and has lodged a complaint with the Fiscal Court of Munich. A decision is not expected to be taken before the year 2011.

Although a civil law partnership made a loss throughout its entire existence, a substantial amount of trade tax was assessed upon its dissolution. WTS now represents the partnership as the complainant and considers the assessment of a trade tax pursuant to section 10a Trade Tax Act as amended in 2004 a potential violation of the objective net income principle. “The loss incurred before the assessment in 2006 could not be fully offset. Therefore, the minimum taxation is definitely equivalent to a taxation of capital here“, says Peter Jung, tax consultant and partner at WTS.

The complainant has legitimate hopes that the case will be won as the Munich Fiscal Court already expressed doubts about the constitutionality of the minimum taxation in its decision of 31 March 2008 (8 V 1588/08). WTS is supported by Prof. Dr. Joachim Lang, who prepared a legal opinion in this context in 2004. Prof. Lang concluded that “from a legal point of view the minimum taxation has to be considered unconstitutional".

Note to the editorial departments: We will be happy to arrange for an interview with Peter Jung at short notice.

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 Constitutional Complaint Against Minimum Taxation for Trade Tax at the Fiscal Court of Munich

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