Germany's Federal Constitutional Court in Karlsruhe will this week review inheritance tax rules. The court will address two cases concerning primarily the taxation of large inheritances and company assets. Tagesschau ↗
One of the cases is a lawsuit brought by Bavaria. The Bavarian state government argues that the tax-free allowances for inheritance tax are set too low. At the same time, it is pushing for the individual federal states, rather than the federal government, to decide on the rules. Deutschlandfunk ↗
The issue also affects heirs of family businesses. The court will assess whether business assets and large inheritances are still subject to sufficient taxation, or whether certain groups are exempted from tax to too great an extent. Die Zeit ↗
According to critics of the current system, unequal taxation of large assets can deepen inequalities in Germany and undermine social cohesion. However, representatives of family businesses and the German Chamber of Industry and Commerce warn against increasing the tax burden. They argue it could harm the business environment in the country. Spiegel.de ↗
Bavarian Premier Markus Söder is pushing for the regionalization of inheritance tax, meaning the transfer of greater powers to the federal states. Federal Chancellor Friedrich Merz has already rejected this idea. n-tv ↗
The Constitutional Court's rulings could influence the future setup of inheritance tax, the scope of tax relief on business assets, and the division of powers between the federal government and the federal states. Die Zeit ↗
Constitutional Court in Karlsruhe to review inheritance tax rules
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