- BVerfGE 18, 441 2 BvR 227/64 Assessment of aliens for war taxation
- 07 April 1965
- Wagner, Henneka, Dr. Leibholz, Geller, Dr. Rupp, Dr. Geiger, Dr. Federer, Dr. Kutscher
- © Nomos Verlagsgesellschaft
Order of the Second Senate of 7 April 1965 pursuant to § 24 of the Federal Constitutional Court Act-- 2 BvR 227/64 --
in the proceedings relating to the complaint of unconstitutionality by the A. Corporation of Zurich (Switzerland) contesting the judgments of the Federal Fiscal Court of 1 March 1963 --III 323/59 U, III 324/59, III 27/60
The complaint of unconstitutionality is rejected.
EXTRACT FROM GROUNDS:
A. - I.
The complainant is a corporation (Aktiengesellschaft) established under Swiss law with headquarters in Zurich. It is the owner of two pieces of real estate in Hamburg and beneficial owner of a further piece of real estate, for which a Hamburg company is listed as owner in the Land Register. By way of its complaint of unconstitutionality, the complainant objects to its being assessed with a levy on mortgage profits (Hypothekengewinnabgabe) resulting from its mortgage rights in this property.\
According to §§ 91 et seq. of the Act on the Equalization of Burdens of 14 August 1952,1 foreign nationals are subject to the levies for debtor profits flowing from mortgage rights in real estate located in the Federal Republic of Germany in the same manner as debtors of German nationality. The assessment of foreigners with equalization of war burdens levies is not, however, regulated only by this Act. Special arrangements found in international treaties are also applicable. Applying to Swiss nationals is the Agreement concluded between the Federal Republic of Germany and the Swiss Confederation on the German Equalization of Burdens of 26 August 1952.2 . . .(recital by the Court of the relevant legal provisions)
1. The complainant objected in all three instances to the assessment of a levy on its mortgage profits and filed an appeal to the rulings dismissing the objections. The Fiscal Court (Finanzgericht) in Hamburg rejected the appeals, and the Federal Fiscal Court (Bundesfinanzhof) rejected the appeals on point of law entered against the appellate decisions.
In essence, the Federal Fiscal Court based its decisions3 on the following reasoning: The German-Swiss Agreement on the Equalization of Burdens precludes the circle of persons benefiting from this Agreement from being exempted from the levy on mortgage profits. The Transition Convention4 provides that United Nations nationals are not exempted from the levy on mortgage profits, and with regard to the equalization of war burdens levies, it does not stipulate a provisional exemption from assessment until such time as a peace treaty is concluded. The assessment of foreigners for the levy on mortgage profits does not represent an expropriation in the sense of Art. 14(3) of the Basic Law. There is no general rule of international law precluding the assessment of foreigners for war-related burdens. The complainant's reliance on a general rule of international law does not succeed for the reason that its assessment with equalization of burdens levies has been conclusively regulated by the Agreement with Switzerland, which takes precedence as international treaty law to general rules of international law. There was no obligation to submit the matter to the Federal Constitutional Court. Doubt in the sense of Art. 100(2) of the Basic Law means doubt by the court. Finally, it is also not a violation of Art. 3(1) of the Basic Law that an exemption from the levy on mortgage profits was not provided for foreigners as owners of mortgaged real estate located in the Federal Republic.
2. The complaint of unconstitutionality is directed against the decisions of the fiscal authorities, the Fiscal Court in Hamburg and the Federal Fiscal Court. The complainant submitted the following reasons for its complaint:
The levy on mortgage profits is solely imposed in order to cover war-related burdens. According to a general rule of international law, however, it is not permissible to impose on foreigners levies intended to cover such burdens. In support of this view, the complainant makes reference to an expert opinion rendered in an unrelated case by Professor Seidl-Hohenveldern, who investigated the issue and concluded that foreigners cannot be assessed with property levies5 for their real estate located in the Federal Republic of Germany.6 The complainant asserts that the Federal Fiscal Court failed to observe this general rule of international law and thereby violated Art. 25 of the Basic Law.
The complainant further maintains that it has been removed from the jurisdiction of its lawful judge, in that the Federal Fiscal Court failed to obtain the decision of the Federal Constitutional Court pursuant to Art. 100(2) of the Basic Law as to whether the cited rule of international law is an integral part of federal law. A court is obligated under Art. 100(2) of the Basic Law to submit this question to the Federal Constitutional Court when a party to the proceedings has doubts regarding the general rule of international law. . . .
Art. 2(1) of the Basic Law is said to have been violated because the complainant's opportunity for economic development was impaired as a consequence of the assessment of the mortgage-profits levy contrary to international law. By way of the contested decisions, the complainant asserts that it has been assessed with the mortgage-profits levy in the same manner as German nationals; §§ 91 et seq. of the Act on the Equalization of Burdens makes no differentiation in favor of foreigners. This allegedly constitutes a violation of Art. 3(1) of the Basic Law, which requires that differing facts be regulated in differing ways. The violation of Art. 3(1) of the Basic Law represents a simultaneous violation of Art. 14 of the Basic Law.
The complaint of unconstitutionality is admissible insofar as it is objected that Art. 101(1), second sentence, of the Basic Law has been violated. Just as with the right of audience in court,7 any person involved as a party in judicial proceedings has the right to trial before his lawful judge, regardless of whether he is a natural or juristic, a national or foreign person.
The question of whether a complaint of unconstitutionality made by a foreign juristic person is, with regard to Art. 19(3) of the Basic Law, also admissible to the extent that it objects to a violation of Arts. 2(1), 3(1) and 14 of the Basic Law can be left open in summary proceedings under § 24 of the Federal Constitutional Court Act.8
The complaint of unconstitutionality is clearly unfounded.
1. Art. 101(1), second sentence, has not been violated.
a) It is true that one may be removed from the jurisdiction of his lawful judge when a court disregards its obligation to submit a particular matter to another court. This also applies when the court to which the matter is to be submitted is only to decide on a specific point of law.9
However, the Federal Fiscal Court was not obligated to make a submission pursuant to Art. 100(2) of the Basic Law. On the contrary, submission would have been impermissible, since the question of whether a rule of international law is an integral part of federal law was not material to the decision in the litigation before the Federal Fiscal Court.10 Art. 101(1), second sentence, of the Basic Law cannot be violated by the omission of an impermissible submission.
b) The complainant relies on a general rule of customary international law, according to which it would be impermissible to impose levies on foreigners in order to cover war-related burdens. The treaty rules found in the Agreement with Switzerland on the German Equalization of Burdens, however, were suited to superceding this rule of international law -- assuming its validity -- and precluding its application.
Under Art. 25 of the Basic Law, general rules of international law only become an integral part of federal law as to their specific content and their particular reach.11 Art. 25 of the Basic Law affords them access to the German legal system only to the extent of their validity under international law,12 a status that may also be determined by reference to the degree to which they have been superceded by the treaty rules of individual states. Art. 25 of the Basic Law does not prevent treaty arrangements, permissible under international law but not in full harmony with general rules of international law, from acquiring the force of national German law through legislation.13
Customary international law is in all respects jus dispositivum, i.e., its rules apply in the absence of an agreement to the contrary. There is no known doctrine of general international law that would assign general customary rules of international law absolute priority over treaty arrangements. To the extent that it affects the parties to a treaty, international treaty law as a rule takes precedence over customary international law as lex posterior and lex specialis. Only a few elementary legal precepts will have to be regarded as rules of customary international law unable to be altered by treaty. The quality of such mandatory norms will only be able to be conferred upon those legal doctrines, deeply rooted in the legal conviction of the community of states, that are indispensable for the existence of international law as an international legal order and whose observance can be demanded by all members of the community of states.14 The doctrine that foreigners may not be imposed with levies to cover war-related burdens would most certainly not number among these mandatory rules of international law.15
For the foregoing reasons, the question can be left unresolved as to whether the result -- namely, that the rule of international law cited by the complainant in any event cannot be regarded as a general rule of international law -- would be justified by the fact that agreements have been concluded or are in force between the Federal Republic and a not insignificant number of other states whose contents correspond to the German-Swiss Agreement.16
c) Since the Agreement with Switzerland on the German Equalization of Burdens was thus suited to precluding the application of the general rule of international law cited by the complainant, this rule could only have become material to the decision of the Federal Fiscal Court if the Agreement had left the complainant with the power to reject the assessment with equalization of burdens levies under the Agreement and to rely instead on rules of general international law more favorable to it.
The Federal Fiscal Court examined whether the Agreement, which makes reference to agreements made for United Nations nationals in Part X of the Transition Convention, is able to be interpreted in this sense; however, it came to the conclusion that the "treatment /of the complainant/ in the area of equalization of burdens . . . has been conclusively regulated by the Agreement."
When the Federal Constitutional Court reviews the interpretation and application of treaty arrangements that have acquired the force of national German law through legislation, the same principles apply that also limit the Court's power to review the decisions of lower courts: the interpretation and application of the provisions of international agreements can only be examined for whether they violate constitutional law, i.e., are arbitrary,17 or are based on a fundamentally incorrect conception of the meaning of a basic right18 or are incompatible with other provisions of constitutional law.
The interpretation of the German-Swiss Agreement and Part X of the Transition Convention as conclusively regulating the matter, as well as the application of these agreements to the complainant by the Federal Fiscal Court, do not however appear to violate constitutional law.
The Agreement does not contain a clause directing that the general rules of international law are to remain unaffected.19 As a rule, treaty law takes precedence to customary international law. A rule that would prohibit the assessment of foreigners with levies to cover war-related burdens would not be counted among the mandatory rules of international law.
Art. 25 of the Basic Law -- a violation of which, furthermore, is unable to support a complaint of unconstitutionality20 -- has thus not been misinterpreted by the Federal Fiscal Court. It does not appear that the interpretation of the Agreement as conclusively regulating the matter conflicts with other provisions of the Basic Law.
d) Since the general rule of international law cited by the complainant was thus irrelevant for the decision of the Federal Fiscal Court, Art. 101(1), second sentence, of the Basic Law was not violated. The Federal Fiscal Court indeed examined whether a general rule of international law intervened in favor of the complainant, but it came to the conclusion that such a rule could not be established. This does not, however, alter the fact that the judgments are based on the application of the Agreement on the German Equalization of Burdens, such that a submission pursuant to Art. 100(2) of the Basic Law would have been impermissible.
2. The Agreement with Switzerland on the German Equalization of Burdens makes reference to agreements made for United Nations nationals in Part X of the Transition Convention. In the opinion of the Federal Fiscal Court, applicable to the matter at hand was not Art. 6(1) of the Transition Convention but rather Art. 6(2), second sentence, which grants a temporary, i.e., partial, exemption from the property levy but no exemption from the mortgage-profits levy. The interpretation given to the provisions of Part X of the Transition Convention by the Federal Fiscal Court coincides with that convincingly substantiated by the Arbitral Commission in its decision in the test action brought by the married couple Gilis.21 From the standpoint of constitutional law, there are no objections to this interpretation. Art. 120(1) of the Basic Law cannot be advanced here.22
The judgments of the Federal Fiscal Court and the statutory provisions on which they are based are also compatible with Art. 3(1) of the Basic Law.
It is consistent both with constitutional law and with international law that foreigners are basically able to be assessed with levies relating to their real estate located in Germany and to the mortgage rights attached to these.23 It was not arbitrary that the assessment of United Nations nationals and other persons accorded equal status by way of special agreements with equalization of burdens levies has been regulated in such a way as to grant them partial exemption from property levies, but not, however, from levies on mortgage profits and from gains taxes.24 Corresponding rules apply to the relations between the Federal Republic of Germany and a considerable number of other states and their nationals, either by virtue of special agreements or declarations or on account of Art. 6(2) in Part X of the Transition Convention. It is out of the question to assume that arbitrary rules have been agreed upon or recognized in this case.
In sum, it is compatible with the general doctrine of equality that the complainant has been treated more favorably than Germans only with respect to the property levy and that further privileges or the complainant's complete exemption from all equalization of burdens levies have not been provided for.
4. Finally, the imposition of the mortgage-profits levy is clearly not repugnant to Art. 14 of the Basic Law.25 Art. 2(1) of the Basic Law as well has not been violated.
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