Headnotes

to the Order of the Second Senate of 30 June 2022

- 2 BvR 737/20 -

1. Liability for unlawful state conduct follows from the particular fundamental rights that are affected. In principle, fundamental rights guarantee appropriate secondary claims when a violation has occurred.

2. It is for the legislator to determine the manner and scope of secondary claims that are rooted in fundamental rights and to give specific shape to such claims. In exercising this authority, the legislator has a margin of appreciation and assessment and leeway in terms of design.

FEDERAL CONSTITUTIONAL COURT

- 2 BvR 737/20 –

IN THE NAME OF THE PEOPLE

In the proceedings
on
the constitutional complaint

the Federal Constitutional Court – Second Senate –

with the participation of Justices

Vice-President König,

Huber,

Hermanns,

Müller,

Kessal-Wulf,

Maidowski,

Langenfeld,

Wallrabenstein

held on 30 June 2022:

1. The constitutional complaint is rejected.

R e a s o n s :

A.

The constitutional complaint concerns the question of whether constitutional law requires the payment of interest on taxes in the amount of EUR 54,725,320. These taxes were paid by the complainant in 2016 and subsequently refunded in 2017 following the Federal Constitutional Court’s decision declaring the Nuclear Fuel Tax Act (Kernbrennstoffsteuergesetz – KernbrStG) void.

I.

1. In previous proceedings on a referral for specific judicial review, the Second Senate of the Federal Constitutional Court found that the Nuclear Fuel Tax Act was incompatible with Art. 105(2) in conjunction with Art. 106(1) no. 2 of the Basic Law (Grundgesetz – GG) in its entirety, declaring it void by Order of 13 April 2017 - 2 BvL 6/13 - (Decisions of the Federal Constitutional Court, Entscheidungen des Bundesverfassungsgerichts – BVerfGE 145, 171 ff.).

a) The Nuclear Fuel Tax Act imposed a tax on nuclear fuel used for the commercial generation of electricity (§ 1(1) first sentence, § 2 No. 1 KernbrStG). The tax became due each time a fuel assembly or individual fuel rods were inserted into a nuclear reactor for the first time and a self-sustaining chain reaction was initiated (§ 5(1) KernbrStG). Operators of nuclear power plants were liable for payment of the tax (§ 5(2) in conjunction with § 2 No. 6 KernbrStG; cf. BVerfGE 145, 171 <172 f. para. 4 f.>).

b) The Nuclear Fuel Tax Act was found unconstitutional, as the Federation lacked the required legislative competence. Despite the wording of § 1(1) first sentence KernbrStG, the nuclear fuel tax did not constitute a form of tax on consumption within the Federation’s legislative competence under Art. 105(2) second sentence GG in conjunction with Art. 106(1) GG (cf. BVerfGE 145, 171 <211 para. 111 ff.>).

c) As a result of its formal unconstitutionality, the Second Senate of the Federal Constitutional Court declared the Nuclear Fuel Tax Act void in accordance with § 82(1) in conjunction with § 78 of the Federal Constitutional Court Act (Bundesverfassungsgerichtgesetz – BVerfGG). The Court refrained from making a finding of mere incompatibility with the Basic Law, stating that the tax in question was beset from its outset by considerable constitutional uncertainties with regard to the law governing public finances (cf. BVerfGE 145, 171 <229 para. 162>)

2. § 37(2) of the Fiscal Code (Abgabeordnung – AO) expressly provides for a claim to a refund of taxes paid without any legal basis. In accordance with § 37(1) AO, such claim arises from the legal relationship between the taxpayer, i.e. the person owing the tax, and the tax creditor, the state (Steuerschuldverhältnis ). Pursuant to § 233 first sentence AO, interest is charged on claims arising from the taxpayer-creditor relationship only to the extent prescribed by law. §§ 233a and 236 specify which tax refund claims are subject to interest.

a) Pursuant to § 233a AO, back taxes and tax refunds based on the assessment of certain taxes, which are specifically listed in that provision, are subject to interest. The nuclear fuel tax is not one of the taxes listed. Interest begins to accrue after a grace period of 15 months after the end of the calendar year in which the tax became due. According to the legislative intent, the primary reason for charging interest following a grace period is the principle of equal treatment of taxpayers. The rule on interest on back taxes and tax refunds aims to compensate for the fact that taxes are assessed and become payable at different times for individual taxpayers (cf. Bundestag document, Bundestagsdrucksache – BTDrucks 11/2157, p. 194; cf. Federal Constitutional Court, Order of the First Senate of 8 July 2021 - 1 BvR 2237/14, 1 BvR 2422/17 -, para. 124 ff.).

The case-law of the ordinary (non-constitutional) courts refers to the unambiguous wording of § 233a AO, finding that interest is strictly limited to the taxes enumerated in the provision (cf. Decisions of the Federal Finance Court, Entscheidungen des Bundesfinanzhofs – BFHE 212, 416 <417>; Federal Finance Court, Order of 23 February 2007 - IX B 242/06 -, juris, para. 2; Order of 23 June 2014 - VIII B 75/13 -, juris, para. 11). According to this case-law, there is no general legal precept reflected in this provision mandating that all claims arising from the relationship between taxpayers and the state be subject to interest to compensate for any possible cash flow advantages or disadvantages (cf. BFHE 212, 416 <417>).

b) § 236(1) AO provides for interest on a tax refund, regardless of the type of tax involved, if a taxpayer prevails on a claim before a finance court. Such interest accrues starting either from the date legal proceedings commence or the date of payment of the amount to be refunded, if payment is made after legal proceedings are commenced, and runs to the date of payment of the refund. § 236(2) provides for interest under similar terms in certain narrowly defined situations. [...]

c) § 165 AO permits tax authorities to provide tax assessments that are merely provisional: [...]

[…]

3. In 2016, the complainant, which operates a nuclear power plant, paid nuclear fuel taxes.

a) After initiating a chain reaction subject to tax under the Nuclear Fuel Tax Act, the complainant filed a tax return dated 8 July 2016 in order to comply with the legal provisions thereunder and calculated the tax payable at EUR 54,725,320; the complainant did so while expressly protesting its liability and reserving its rights.

b) On 22 July 2016, the Osnabrück Main Customs Office gave notice of the assessment of the nuclear fuel tax in the complainant’s case. Given that the constitutionality of the Nuclear Fuel Tax Act was contested, the notice was made on a provisional basis pursuant to § 165(1) second sentence no. 3 AO. On 25 July 2016, the complainant paid the tax in accordance with the provisional assessment.

c) In a filing dated 5 August 2016, the complainant objected to the assessment of the nuclear fuel tax of 22 July 2016 based upon the tax return dated 8 July 2016 on the grounds that the Nuclear Fuel Tax Act was formally and substantively unconstitutional and also violated EU law, citing a judicial referral to the Federal Constitutional Court pursuant to Art. 100(1) GG made by the Hamburg Finance Court on 29 January 2013. At the time, the customs office refrained from deciding on the objection, and the complainant did not file an action with the finance courts.

d) After the Order of the Second Senate of the Federal Constitutional Court dated 13 April 2017 - 2 BvL 6/13 - (BVerfGE 145, 171 ff.) was published on 7 June 2017, [declaring the Nuclear Fuel Tax Act unconstitutional,] the Osnabrück Main Customs Office gave notice on 12 June 2017 that it was rescinding its tax assessment of 22 July 2016 and thereby granted the complainant’s objection. The amount of EUR 54,725,320 previously paid on the basis of the assessment was refunded to the complainant. The funds were paid into the complainant’s bank account on 19 June 2017.

4. In an application to the Osnabrück Main Customs Office dated 5 June 2018, the complainant requested interest on the refunded tax payment.

a) The complainant requested that interest be paid at a rate of 0.5% for the ten full months (§ 238(1) second sentence AO) between the payment of the tax on 25 July 2016 and the receipt of the refund on 19 June 2017, for a total of EUR 2,736,265. The complainant argued that its claim for interest was derived from § 236 AO, either by direct application or – should such application be rejected – by way of analogous application; the complainant contended that extending the provision’s scope of application was necessary in order to comply with the constitutional requirement of effective legal protection under Art. 19(4) GG.

b) The Osnabrück Main Customs Office denied the claim for interest in a decision dated 24 July 2018 on the grounds that there was no legal basis for the claim. The complainant lodged an objection to this decision in a letter dated 24 August 2018, which the Main Customs Office rejected as unfounded in a decision dated 12 October 2018.

c) The complainant continued to pursue its claim for interest with an action lodged on 13 November 2018 with the Hamburg Finance Court, citing § 236(1) in conjunction with § 236(2) no. 2 lit. a AO as the legal basis for its claim. [...]

d) The Hamburg Finance Court rejected the claim in a judgment dated 22 February 2019, which is challenged in the present proceedings.

[…]

ee) The Finance Court did not allow an appeal on points of law as to this judgment.

e) The complainant’s complaint against the denial of leave to appeal (Nichtzulassungsbeschwerde ) was rejected by the Federal Finance Court as unfounded in an order dated 23 October 2019 - VII B 40/19 - which is also challenged in these proceedings.

[…]

II.

1. On 10 January 2020, the complainant lodged a constitutional complaint against the decision of the Osnabrück Main Customs Office of 24 July 2018, amended by the decision on the complainant’s objection dated 12 October 2018, the judgment of the Hamburg Finance Court of 22 February 2019 and the order of the Federal Finance Court of 23 October 2019. The complainant asserts a violation of its rights under Art. 14(1) GG and under Art. 3(1) GG, each in conjunction with Art. 19(4) GG.

[…]

2. The Federal Government was given the opportunity to submit a statement pursuant to § 94(2) BVerfGG. On behalf of the Federal Government, the Ministry of Justice submitted a statement in these proceedings.

[…]

B.

The constitutional complaint is admissible.

I.

As a domestic legal person, the complainant may assert, in principle, violations of its fundamental rights pursuant to Art. 19(3) GG. This applies to both the fundamental right to property under Art. 14(1) GG and the general guarantee of the right to equality under Art. 3(1) GG (cf. BVerfGE 23, 153 <163>; 41, 126 <149>; 53, 336 <345> and – as to occupational freedom under Art. 12(1) GG – BVerfGE 143, 246 <312 para. 182>) as well as the guarantee of effective legal protection pursuant to Art. 19(4) first sentence GG (cf. BVerfGE 80, 244 <250>).

II.

[…]

C.

The constitutional complaint is unfounded.

The challenged decisions of the administrative authority and the finance courts rejecting the claim for an interest payment sought in the initial proceedings do not violate the complainant’s fundamental rights.

The claim for interest does not follow directly from the Basic Law (see I. below). The legislative decision not to provide for an interest claim in the Fiscal Code is compatible with constitutional law (see II. below). The way the finance courts interpreted and applied the legal provisions in question in the challenged decisions also does not violate the Basic Law (see III. below).

I.

The claim against the Osnabrück Main Customs Office in the initial proceedings, which sought interest on the nuclear fuel tax paid at a rate of 0.5% per month for the time period of 25 July 2016 to 19 June 2017, finds no direct legal basis in the Basic Law; in particular, such claim cannot be derived from the principle that the Constitution requires the recognition of appropriate claims for compensation for violations of fundamental rights.

It is true that the levying of nuclear fuel tax on the basis of a federal law enacted in breach of the division of competences [between the Federation and the Länder ] violated the complainant’s general freedom of action under Art. 2(1) GG (see 1. below). In principle, fundamental rights violations such as those resulting from the Nuclear Fuel Tax Act, which was adopted despite the lack of legislative competence, may result in claims for compensation rooted in constitutional law, in addition to any claims for refund under tax law (see 2. below). However, while the Constitution contains a general guarantee to this effect, it does not directly confer an individual entitlement to specific secondary claims, such as the claim for interest asserted in the initial proceedings (see 3. below). Rather, claims for compensation that are rooted in fundamental rights, even those whose foundations are set forth in the Basic Law, must be shaped and brought into force by the legislator; it is incumbent upon the legislator to define the specific constituent elements and the specific legal consequences of the respective secondary claims (such as claims for indemnity, damages, redress or interest), and thereby make such claims operational. In this regard, the Basic Law affords the legislator broad leeway to design and specify the scope and prerequisites of secondary claims; in this regard, the legislator is permitted, but not required, to set out claims for comprehensive compensation in specific instances (see 4. below). Nor can secondary claims for compensation relating to fundamental rights violations be directly derived from Art. 19(4) GG (see 5. below). These conclusions are consistent with the values of the European Convention on Human Rights (see 6. below).

1. As for the constitutional guarantees of property in Art. 14(1) GG (see a) below) and that of occupational freedom in Art. 12(1) GG (see b) below), it is not necessary for the Court to make a definitive determination as to whether the nuclear fuel tax affects the scope of protection of these fundamental rights. In any case, the levying of the tax resulted in an interference with the complainant’s general freedom of action under Art. 2(1) GG (see c) below).

a) In principle, the constitutional guarantee of property affords protection for all ‘rights constituting assets’ (vermögenswerte Rechte ). These are rights that the legal order assigns to a beneficiary of such right in such a way that they may exercise the powers associated with the right in question in the manner of their choosing for their own private benefit (established case-law; cf. BVerfGE 83, 201 <209>; 95, 267 <300>). The protection of property under constitutional law thereby encompasses considerably more than what is protected as property under private law; most notably, it may extend to legal interests in certain assets that are not in rem. However, protected property in this sense remains bound to the assignment of a formal legal interest. A person’s estate or funds as such, which merely refer to the entirety of a person’s pecuniary assets, do not represent a formal legal right and therefore do not constitute property within the meaning of Art. 14(1) GG (established case-law; cf. BVerfGE 4, 7 <17>; 95, 267 <300>; 105, 17 <32>).

aa) In principle, Art. 14(1) GG cannot be invoked against state-imposed obligations to pay money. These do not require the person liable for payment to satisfy the obligation through specific items of property; instead, they are directed at fungible assets, leaving a choice as to which means to use to settle the debt. Only when such obligations are so onerous on the affected person and their financial circumstances as to have a “debilitating effect” do other considerations come into play (cf. BVerfGE 23, 288 <315>; 30, 250 <271 f.>; 63, 312 <327>; 70, 219 <230>; 78, 232 <243>; 95, 267 <300>).

bb) Only those taxes – such as the trade tax or the income tax – which are linked to a tax debtor’s acquisition or ownership of legal interests of financial value have been recognised in the Court’s case-law as amounting to interferences with the guarantee of property under Art. 14 GG. As the guarantee of property serves to protect the private ownership and use of legal interests of financial value, a tax law also interferes with the guarantee of property if the tax measure is factually linked to the holding of legal interests of financial value and restricts their private use in the interest of the common good. Such a law constitutes a definition of the content and limits of property (Inhalts- und Schrankenbestimmung ) within the meaning of Art. 14(1) second sentence GG and requires legal justification (cf. BVerfGE 115, 97 <110 ff.>).

cc) The nuclear fuel tax, however, is not contingent upon acquisition or ownership of nuclear fuel elements by a tax debtor. This indicates that the imposition of such tax is not an interference with the fundamental right protecting property.

b) Art. 12(1) GG guarantees the freedom to practise one’s occupation. On the one hand, the protection afforded by this fundamental right is comprehensive in scope; on the other, it only protects against impairments that directly concern occupational activity. Thus, its scope of protection cannot be invoked when a legal provision, its application or some other act of public authority has a merely peripheral impact on occupational activity under certain circumstances (established case-law; cf. BVerfGE 105, 252 <265 ff.>; 106, 275 <298 f.>; 111, 191 <213>). By contrast, occupational freedom is affected not only when measures are directed at occupational activity, but also when measures affect the framework in which the practice of the occupation occurs and, as a result of their design, are so closely related to the exercise of an occupation that they objectively have a regulatory effect (objektiv berufsregelnde Tendenz ) (established case-law; cf. BVerfGE 95, 267 <302>; 98, 218 <258>; 111, 191 <213>).

aa) The imposition of taxes or levies can have such an effect on the practice of an occupation (cf. e.g. BVerfGE 13, 181 <187> taxes on licences to sell alcoholic beverages; BVerfGE 38, 61 <79> road freight taxes; BVerfGE 111, 191 <213> levies for insurance funds for notaries public). Constitutional review of taxes and levies is conducted under Art. 12(1) GG if such taxes or levies are closely related to the exercise of a profession and there is an objective regulatory effect. Art. 12(1) second sentence GG may also come into play, in principle, when a tax or levy is not intended to have an effect on occupational freedom, but nevertheless results in an impairment on such freedom through the effects of its application (cf. BVerfGE 81, 108 <121 f.>; 110, 370 <393>). In particular, the breadth of application and the tendency of the tax or levy to influence the practice of the occupation can be decisive in an assessment of constitutionality (cf. BVerfGE 37, 1 <17 f.> levy for wine industry stabilisation fund; BVerfGE 81, 108 <121 f.> repeal of tax deduction for certain secondary occupations; BVerfGE 110, 370 <393 f.> sewage sludge levy).

bb) The legislative intent behind the nuclear fuel tax was not to exert influence on the operation of nuclear power plants by means of a deliberate controlling effect, but rather, to generate revenue, particularly in light of the anticipated high costs for the remediation of the Asse II radioactive waste repository (cf. BTDrucks 17/3054, S. 1, 5). It is not necessary here to assess whether the imposition of the tax had an objective regulatory effect due to its high rate and the narrow group of persons subject to the tax.

c) In any case, the imposition of the nuclear fuel tax resulted in an interference with the complainant’s general freedom of action under Art. 2(1).

aa) Art. 2(1) GG guarantees the general freedom of action in a comprehensive manner (established case-law; BVerfGE 6, 32 <36>; 80, 137 <152>; 97, 332 <340>). More specifically, the general freedom of action includes the right to be held liable for taxes only on the basis of legislation that is formally and substantively compatible with the Basic Law and is therefore part of the ‘constitutional order’ [within the meaning of the limitation clause in Art. 2(1)] (established case-law; cf. BVerfGE 19, 206 <215 f.>; 44, 216 <223 f.>; 97, 332 <340 f.>).

bb) The imposition of the nuclear fuel tax, which was outside the legislative competence of the Federation, constituted an unjustified (cf. BVerfGE 145, 171 ff.) interference in the general freedom of action of the complainant.

2. The complainant’s entitlement to a refund of taxes paid as a result of the violation of fundamental rights has been fulfilled. Nevertheless, fundamental rights violations like those resulting from the Nuclear Fuel Tax Act, which was adopted in breach of the division of competences, may result in additional claims for compensation under constitutional law.

a) In principle, fundamental rights also guarantee appropriate secondary claims when violations have occurred. Liability for unlawful state conduct is not just a manifestation of the principle of legality ([…]), but also follows from the particular fundamental rights that are affected, which are the central point of reference for the state’s obligation to assume liability ([…]; Federal Constitutional Court, Order of the Second Chamber of the Second Senate of 18 November 2020 - 2 BvR 477/17 -, para. 24); in such case, the principle of state liability follows from the impairment of the fundamental rights themselves.

b) Fundamental rights not only protect the individual against unjustified state interferences with freedom and equality, they form the basis of claims against the state to refrain from certain conduct or undo a certain situation to ensure the effectiveness of fundamental rights protection ([…]). When it is not possible to make such claims prior to an interference, fundamental rights – not just ordinary law enacted on the basis of a political decision by the legislator – also give rise, in principle, to claims for compensation, such as claims for indemnity, damages, redress or interest (cf. Federal Constitutional Court, Order of the Second Chamber of the Second Senate of 18 November 2020 - 2 BvR 477/17 -, para. 25 as well as comparative discussion in para. 26).

c) Such compensatory claims, enacted into law as secondary claims, cannot fully restore the integrity of the affected fundamental right. However, without the constitutionally rooted right of a secondary claim for compensation, violations of fundamental rights would often go unsanctioned (cf. Federal Constitutional Court, Order of the Second Chamber of the Second Senate of 18 November 2020 - 2 BvR 477/17 -, para. 25 ff.). Compensatory claims can alleviate the severity of the interference and thus at least prevent the fundamentally protected interests in question from being completely undermined.

3. It does not follow, however, that the constitutional guarantee of compensatory claims gives rise to specific secondary claims derived directly from the constitution, such as a claim for interest on a tax refund. Rather, it is for the legislator to set out the manner and scope of secondary claims rooted in fundamental rights and to give specific shape to such claims (cf. BVerfGE 91, 93 <111 f.>; 125, 175 <224>; Federal Constitutional Court, Order of the Second Chamber of the Second Senate of 18 November 2020 - 2 BvR 477/17 -, para. 30). The legislator is responsible for bringing constitutionally guaranteed compensation claims into force by making the necessary legislative specification of the requirements of particular secondary claims and their legal consequences.

4. In specifying the manner and scope of secondary claims, the legislator is afforded a margin of assessment, appreciation and leeway (cf. BVerfGE 96, 56 <64>; 121, 317 <356>; 133, 59 <76 para. 45 to the end>). Typification (Typisierung ) and generalisation are not only allowed, but are actually necessary in order to operationalise secondary claims.

a) The constitutional guarantee of secondary claims relating to fundamental rights violations does not entail an obligation on the part of the legislator to eliminate all consequences following from unconstitutional interferences on a retroactive basis (cf. BVerfGE 48, 327 <340>). There is also no constitutional obligation to remedy each and every consequence of an interference with retroactive effect when the Federal Constitutional Court declares a law void. When structuring the legal relationship between the citizen and the state and when defining specific claims for compensation, the legislator must take other constitutional concerns into account, in addition to the affected person’s constitutionally protected interest in remedying the consequences of the fundamental rights violation and obtaining corresponding compensation. In this respect, other constitutional concerns include, in particular, those of legal certainty and maintaining the peaceful legal order (Rechtsfrieden ) (cf. BVerfGE 37, 217 <261>; 48, 327 <340>; 73, 40 <102>; 92, 53 <74>; 119, 331 <383>), the effective protection of fundamental rights of third parties (cf. BVerfGE 83, 130 <154>), and the functionality of state institutions (cf. BVerfGE 83, 130 <154>; 119, 331 <383>). In setting out the framework for constitutional compensatory claims, the legislator is not limited to imposing merely formal limits on claims (such as statutes of limitation), but may also establish substantive limitations: for examples, the legislator may limit liability of the state to subsidiary liability, introduce privileges or even preclude the joint and several liability of the state (cf. BVerfGE 61, 149 <199 f.>; Federal Constitutional Court, Order of the Second Chamber of the Second Senate of 18 November 2020 - 2 BvR 477/17 -, para. 30).

b) While Art. 34 GG establishes minimum requirements regarding the indirect liability of the state for breach of duty, it does not give comprehensive shape to such liability. The minimum requirements set forth in the Constitution allow room for statutory provisions to modify the extent to which the state assumes liability under public law (cf. BVerfGE 61, 149 <199 f.>). Outside of Art. 34 GG, there is no narrower definition to the leeway afforded by the Constitution to the legislator in the area of compensatory claims.

c) Thus, it falls to the legislator to decide whether and to what extent claims for interest should be incorporated in the compensatory regime mandated by fundamental rights to remedy the consequences arising from an unconstitutional tax. In choosing the items on which interest is paid and determining the interest rate, the legislator may enact typifying provisions and may also, to a significant degree, be guided by viability considerations to simplify the determination and payment of interest (cf. BVerfGE 158, 282 <329 para. 115>). If the legislator does provide for claims of interest, then it must also specify the interest rate and the date on which interest begins to accrue – be it from the date of payment, the date of pendency of the claim for refund, after expiration of a grace period or after a decision by the Federal Constitutional Court finding the tax in question void.

5. Direct claims arising from the Constitution also do not follow from Art. 19(4) GG. To the extent that the legal order recognises compensatory claims rooted in fundamental rights, they are part of the guarantee of effective legal protection afforded by Art. 19(4) GG (cf. Federal Constitutional Court, Order of the Second Chamber of the Second Senate of 18 November 2020 - 2 BvR 477/17 -, para. 29). In this way, the right of effective legal protection assures the effectiveness and enforcement of other substantive fundamental rights. However, Art. 19(4) GG does not itself give rise to or define the contents of protected legal interests; rather, the protection afforded under Art. 19(4) GG can only be invoked to enforce already existing recognised legal interests (cf. BVerfGE 61, 82 <110>; 78, 214 <226>; 83, 182 <194 f.>; 84, 34 <49>; established case-law).

6. The decision not to recognise an obligation to provide comprehensive compensation for every financial disadvantage – even for those only indirectly related to a fundamental rights violation – is in accordance with the values of the European Convention on Human Rights and the case-law of the European Court of Human Rights. These, according to the Federal Constitutional Court, serve as guidelines for interpretation when determining the contents and scope of fundamental rights (cf. BVerfGE 128, 326 <367 ff.>). It is evident from the wording of Art. 41 of the Convention that even when a violation of the Convention or the Protocols thereto has been found – often a violation which cannot be completely remedied – just satisfaction is not awarded to the injured party in each case, but only to the extent that is necessary.

While the Court of Justice of the European Union has derived a right to an award of interest from Art. 266(1) or Art. 266(2) in conjunction with Art. 340 of the Treaty on the Founding of the European Union (cf. CJEU, Judgment of 12 February 2015, IPK International, C-336/13 P, EU:C:2015:83, para. 30 f., 71 and para. 37; Judgment of 20 January 2021, Printeos, C-301/19 P, EU:C:2021:39, para. 68, 94, 122, 124 and para. 56) for amounts paid on obligations that are later found to be in violation of EU law, it is not ascertainable that this reflects a general principle that would have to be taken into consideration when interpreting the framework on state liability under German law. These latter provisions are largely shaped by the general principles of law common to the legal systems of the Member States. The distinction between primary legal protection and ancillary legal protection in the form of secondary claims is common among the legal systems of the Member States of the EU ([…]).

II.

The legislative decision not to provide for interest claims such as the one sought by the complainant in the Fiscal Code does not violate the Basic Law. The minimum standards under constitutional law for compensatory claims relating to fundamental rights do not require the legislator to regulate interest on the nuclear fuel tax refund in the present (see 1. below); nor does the lack of a general right of interest on the nuclear fuel tax refund constitute a violation of the equality clause in Art. 3(1) GG (see 2. below).

1. Contrary to the view of the complainant, the constitutional minimum standards for compensatory claims did not require the legislator to provide for claims of interest beyond those set out in § 236 AO. The refund of the nominal amount of the taxes paid provided for by § 37(2) AO was sufficient.

a) If the legislator provides for reimbursement claims in the nominal amount of the taxes paid in cases where the levying of a tax was unconstitutional, the underlying constitutional principles generally do not require further compensation beyond reimbursement –at least not when market interest rates and inflation are low and when reimbursement is completed within a few years, rather than decades later. Once the tax has been refunded, there is usually no remaining significant impairment of fundamental rights that would have to be compensated under constitutional law (cf. BVerfGE 158, 282 <329 f. para. 117 to the end>; as well as BVerfGE 148, 217 <248 para. 116>). In particular, in times of low, or even negative interest rates, it is well within the discretion of the legislator under the principles governing constitutionally rooted compensatory claims not to provide for any interest on tax refunds (cf. BVerfGE 158, 282 <379 f. para. 240 to the end, 381 f. para. 245 to the end>).

b) In the present case, the nuclear fuel tax paid, but ultimately not owed, by the complainant was reimbursed within a reasonably short time period of only ten months. During the period at issue (25 July 2016 to 19 June 2017), interest rates were low (cf. BVerfGE 158, 282 <379 f. para. 240 to the end>) Thus, there was no duty on the part of the legislator to recognise an obligation to pay interest on the tax refunds.

2. The fact that the legislator did not provide for general interest payments on nuclear fuel tax refunds does not violate the general guarantee of the right to equality under Art. 3(1) GG. The general guarantee of the right to equality requires that the legislator accord equal treatment to matters that are essentially alike, and treat unlike matters differently (see a) below). However, the right to equality does not require different treatment of tax refunds following the declaration of an unconstitutional law as void, as opposed to tax refunds following a declaration of an unconstitutional law as incompatible with the Constitution, such that anyone affected by a law declared void must be granted interest, regardless of whether proceedings concerning the individual tax assessment were pending and so long as the assessment was not yet subject to a final decision (see b) below). Nor does Art. 3(1) GG require that the legislator grant interest relating to legal proceedings to those – like the complainant – that are eligible for and receive a tax refund pursuant to § 37(2) AO without ever facing any litigation risk (see c) below).

a) The general guarantee of the right to equality under Art. 3(1) GG requires that the legislator accord equal treatment to matters that are essentially alike, and unequal treatment to matters that are essentially different. This applies to both unequal burdens as well as unequal benefits (established case-law; cf. BVerfGE 145, 106 <141 f. para. 98>; 148, 147 <183 para. 94>; 152, 274 <311 para. 95>; 158, 282 <327 para. 110>). The legislator has discretion to decide on the relevant factual situations to which it attaches the same legal consequences and that it thus deems equal in terms of the law. However, it must do so based on objective reasons (established case-law; cf. BVerfGE 141, 1 <38 para. 93>; 145, 106 <142 para. 98>; 152, 274 <311 para. 95>).

aa) The criteria and standards for assessing whether the legislator has violated the principle of equality are not determined in the abstract, but instead, are based on the particular subject matters and regulatory areas that are affected by the law at issue (established case-law; cf. BVerfGE 133, 377 <407 para. 74>; 145, 106 <142 para. 98>; 152, 274 <312 para. 96>; 158, 282 <327 para. 110>). Depending on the subject matter of the provisions at issue and the criteria for differentiation, the general guarantee of the right to equality gives rise to a fluid standard under the principle of proportionality that sets varying limits on the legislator. These range from the mere prohibition of arbitrariness to strict proportionality requirements. Differences in treatment must always be justified by objective reasons that are appropriate to the aim and the extent of the unequal treatment (established case-law; cf. BVerfGE 145, 106 <142 para. 98>; 148, 147 <183 f. para. 94>; 152, 274 <312 para. 96>).

b) Unequal treatment can be justified by the legislator’s authority to simplify and to use typification. Under certain circumstances, the legislator may design provisions on the basis of what it assumes to by the typical case without violating the general guarantee of the right to equality, even though such typification might result in unavoidable disadvantage in individual cases (cf. BVerfGE 158, 282 <329 para. 114 f.>).

(1) Typification refers to a normative approach that accords the same collective treatment of various situations that are essentially the same in nature. The legislator may in principle orient legislative provisions towards the general or typical case and disregard individual differences in the factual circumstances even in cases in which these are well known (cf. BVerfGE 152, 274 <314 para. 102>; 158, 282 <329 para. 115>; established case-law). In particular, when setting out a framework dealing with mass occurrences, the legislator is authorised to generalise many individual cases into an overall framework, provided that it accurately reflects the subject matter of the legislation based on available information (cf. BVerfGE 11, 245 <254>; 78, 214 <227>; 84, 348 <359>; 122, 210 <232>; 126, 268 <278>; 133, 377 <412 para. 86>; 145, 106 <145 f. para. 106>; 152, 274 <314 para. 101>).

(2) For the purposes of administrative simplification, benefits or burdens can therefore be determined on a generalised basis within certain limits (BVerfGE 111, 115 <137>). In choosing the items on which interest is paid and determining the interest rate, the legislator may enact typifying provisions and may also, to a significant degree, be guided by viability considerations to simplify the determination and payment of interest (cf. BVerfGE 158, 282 <329 para. 115>).

b) There is no constitutional requirement to treat tax refunds following the declaration of an unconstitutional law as void differently from those following a “mere” declaration of incompatibility, such that anyone affected by a law declared void must be granted interest, regardless of whether proceedings concerning the individual tax assessment were pending and so long as the assessment was not yet subject to a final decision.

The terminology of the Federal Constitutional Court in declaring a law void versus declaring a law incompatible with the Basic Law does not denote differing degrees of unconstitutionality that would require differing treatment under Art. 3(1) GG. That a law has been declared void does not mean that the violation of constitutional law was especially serious or manifest. Conversely, a declaration of incompatibility does not mean that the violation of constitutional law was “minor”.

aa) A declaration of a law as void and a declaration of a law as incompatible with the Basic Law differ insofar as, in the first case, the unconstitutional provision ceases to exist with retroactive effect, while in the second case, the legislator responsible for the original provision is tasked with rectifying the constitutional defect, including for past cases, with the exception of those cases whose circumstances have been concluded by a final decision or act (established case-law; cf. BVerfGE 99, 280 <298>; 105, 73 <134>; 148, 147 <211 para. 165>).

bb) The determination of whether an unconstitutional law is to be declared void or incompatible with the Basic Law is not dependent upon the severity of the constitutional violation. Rather, the declaration of a law as void is the statutorily prescribed consequence of a finding of unconstitutionality in accordance with §§ 78, 95 BVerfGG. With a view to restoring a constitutional state, the Federal Constitutional Court only refrains from declaring a law void when, in cases involving a violation of the principle of equality, the legislator can choose among several options to rectify the constitutional defect, or if declaring a law void from the outset would create a situation even further removed from the constitutional order than the unconstitutional provision (cf. BVerfGE 149, 222 <290 para. 151>).

c) In accordance with the foregoing standard (see para. 101 ff.), it is not objectionable under constitutional law that the legislator decided against granting interest to taxpayers who received provisional tax assessments under § 165(1) AO and therefore faced no litigation risk in pursuing their refunds, and instead chose to limit the award of interest under § 236 AO to those cases where the claim for refund was successfully litigated in court.

aa) The legislator created the possibility of provisional tax assessments in § 165(1) AO so that tax debtors would benefit from new or amended legislation or (constitutional) court decisions favouring them, without putting too much strain on the administrative authorities and the judiciary. If a tax assessment is declared to be provisional, tax debtors do not have to keep their cases open through legal remedies in order to benefit from new or amended legislation or court decisions (cf. BTDrucks 12/5630, S. 98).

bb) As a consequence of this, those eligible for a tax refund that do not pursue legal remedies also do not benefit from the interest awarded to prevailing parties in legal proceedings. However, this is within the legislator’s discretion and power to typify. The absence of litigation risk in the case of a provisional tax assessment is an essential difference between affected taxpayers, one that constitutes a basis for justifying the differentiation under constitutional law (cf. BVerfGE, Order of the of the First Senate – Committee of Three – of 5 September 1979 - 1 BvR 594/79 -, HFR 1979, p. 486). While taxpayers who bring legal action against the imposition of a tax must litigate their claim in court, those who are subject to a provisional tax assessment under § 165 AO may reap the benefit of decisions resulting from such tax litigation risk-free. That a tax debtor subject to a provisional assessment might have been willing to take on a corresponding risk of litigation is not the same as actually taking on the risk. […]

III.

The manner in which the finance courts interpreted and applied the legal provisions in question in the challenged decisions also does not violate the Basic Law.

There are no discernible constitutional errors in the manner in which the ordinary courts and administrative bodies implemented the legislative decision not to provide for interest on refunds of the voided nuclear fuel tax. On the contrary, in respecting the legislator’s choices in giving specific shape to the matter in question, rather than replacing these legislative decisions with their own notions of fairness (cf. BVerfGE 82, 6 <12 f.>; 128, 193 <210>; 132, 99 <127 para. 75>), the ordinary courts observed the principle under the rule of law (Art. 20(3) GG) that judges are bound by the law.