Solidarity surcharge is not unconstitutional in 2020 and 2021

Despite the expiry of the Solidarity Pact II, the solidarity surcharge is still justified in 2020 and 2021 and is therefore constitutional.

The constitutionality of the solidarity surcharge is still being hotly debated, even though many taxpayers no longer have to pay any solidarity surcharge at all. In a case before the Federal Fiscal Court, the judges examined the question of whether the solidarity surcharge is still constitutional after the Solidarity Pact II expired at the end of 2019. They came to the conclusion that the solidarity surcharge was not unconstitutional, at least in 2020 and 2021.

According to the judges, there is no compelling link between the Solidarity Pact II, the financial equalization of the federal states and the solidarity surcharge, as the federal government still had reunification-related financial requirements in the years in dispute, 2020 and 2021. Furthermore, the legislator had convincingly demonstrated that the income from the solidarity surcharge, which will be continued from 2021, will not cover the continuing reunification-related costs in the future. The restriction of the solidarity surcharge to higher income earners from 2021 is also justified.

Prior to the ruling, the Federal Ministry of Finance surprisingly withdrew its participation in the proceedings and did not send a representative to the hearing. However, this does not mean that the dispute is over, as several constitutional complaints have already been announced after the Federal Fiscal Court refused to submit the solidarity surcharge to the Federal Constitutional Court for review.