Summary
- The Federal Constitutional Court's ruling confirms the unconstitutionality and nullity of the nuclear fuel tax law. The amounts already paid are to be reimbursed accordingly.
- Whether there is any constitutional leeway for a corresponding taxation law in the light of this decision is highly doubtful.
With its decision of 13 April 2017 (2 BvL 6/13), the Second Senate of the Federal Constitutional Court set the next Milestone in the legal clarification of the framework conditions for the energy transition and the orderly termination of the use of nuclear energy. At the same time, the legislature was corrected in a more far-reaching manner than the First Senate had done in ist judgement of 6 December 2016 (1 BvR 2821/11 et al.). With its judgment, the First Senate had declared the 13th amendment of the German Atomic Energy Act on the “nuclear phase-out” and the structuring of the periods leading up to the decommissioning to be only partially incompatible with the German Basic Law (Grundgesetz) to the extent the constitutional limits of the protection of legitimate expectations had been exceeded. At the same time, the legislature was called upon to enact a corresponding compensatory regulation by 30 June 2018. In contrast, the Second Senate’s decision on the Nuclear Fuel Tax Act was more definite; it found that the Act is unconstitutional and null and void in its entirety. Thus, there was no legal basis for taxing the nuclear fuels, and the sums that had been paid would have to be repaid with interest at a rate of 6%
p.a. This could involve a sum of around EUR 6.3 billion for the period of 2011 to 2016.
The decision of the Federal Constitutional Court was rendered with a certain delay. The judicial review of the Fourth Senate of the Hamburg Finance Court had already been performed on 29 January 2013. The Nuclear Fuel Tax Act (Kernbrennstoffsteuergesetz) itself entered into force at the beginning of 2011 but only created payment obligations for taxation procedures up to 1 January 2017, i.e. for self-sustaining chain reactions with nuclear fuels which were triggered prior to that date. More recently, the cries from political forces for an extension of the nuclear fuel tax had become louder and louder. The Federal Constitutional Court has now definitely put a damper on that.
The political appetites had clearly grown since the European Court of Justice had found in fa-vour of a compatibility with the requirements under EU law already in a preliminary ruling procedure on the same matter on 4 June 2015 (C-5/14). However, implications for the assessment of constitutionality could only be derived from this ECJ decision to a limited extent. After all, the primary question before the ECJ was to assess the compatibility of the Energy Taxation Directive (2003/96/EC) with the Excise Duty Directive (2008/118/EC). The ECJ’s findings were limited to, for one thing, determining that nuclear fuels are not
energy products which fall under the exhaustive list of the scope of application of the Energy Taxation Directive. Moreover, the nuclear fuel tax does not either directly or indirectly cover the consumption of electricity or any other products subject to excise tax within the meaning of the Energy Taxation Directive.
However, the standard for a constitutional evaluation is a different one. The provisions of the financial constitution pursuant to Articles 105 and 106 of the German Basic Law provide for a conclusive set of taxes and forms of taxes. The Federal Constitutional Court has now explicitly clarified this for the first time. The legislature cannot invent any new types of taxes beyond that. But the nuclear fuel tax is in fact not an excise tax, as the legislature falsely alleged, and thus it does not fall under any of the forms of taxes that are mentioned in the German Basic Law. It stipulates that taxes comprise not only objects of private consumption and the private household, but also from the productive sector. Such an excise tax in the
latter sense, however, must have the objective of being passed on to the final consumer. And that is exactly what is missing here. There is purely and simply no legislative competence to enact a tax of this kind.
Gleiss Lutz commentary
How will the legislature react?
- Even though in some cases in the past, the Federal Constitutional Court has permitted the enactment of a new statute with “genuine retroactive effect” if an invalid legal rule is replaced and thus the corresponding onerous effect was foreseeable, in this case such an approach would be extremely dubious for several reasons. Even apart from the retroactive effect problems, serous constitutional obstacles would arise, which are perhaps insurmountable. Structuring it as an excise tax is now absolutely out of the question. Another form of tax would be needed with a different type of taxable event. Ultimately, that would be very difficult to imagine. Other financial constitutional instruments would most likely also be doomed to failure. One possibility could be a special levy. This would require, as one criterion, that it be used for the benefit of a group, i.e. those who are obliged to pay the levy. This is obviously lacking: according to the legislative notes, the nuclear fuel tax served to consolidate the federal budget, which is the most general purpose conceivable for generating income without any reference to a group whatsoever.
- The political actors will have to ask themselves if they should just leave it at that. They have only just reached agreement on the additional costs of the final disposal site. In the final phase up to the planned decommissioning of the last installation in 2022, the nuclear power plants will continue to play an important role in the security of supply, particularly in south Germany. This was most recently affirmed publicly by the Chief Technical Officer of the transmission system operator Amprion, Klaus Kleinekorte, last Thursday, 8 June 2017, when he reported on multiple near-collapses of the electricity grid in recent months. Consequently, right now it is very likely that the main challenges for energy policy will lie primarily in other fields.
Citation: Ruttloff, The Federal Constitutional Court and the nuclear fuel tax – A readjustment of the energy transition, Gleiss Lutz Energy News #10/2017 as of 19 June 2017.
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