Double Taxation Case

CourtObsolete Court (Germany)
Date18 a 1930
Docket NumberCase No. 227
Germany, Reichsfinanzhof.
Case No. 227
Double Taxation Case.

Treaties — Termination of — Extinction of the Object of the Treaty — Income Tax in Federal States.

Treaties — Operation of — Succession of Federal State to Treaty Obligations of Member States — Transfer from Member States to Federal State of the Power to Levy Income Tax.

The Facts.—On 10 August, 1909, a treaty was concluded between Prussia and Luxemburg for the prevention of double taxation. Subsequently, income tax matters, dealt with by the Treaty, passed from the competence of Prussia to that of the Reich. The appellant claimed that the income which he derived from an agricultural undertaking situated in Luxemburg should be exempted from German Federal income tax. He submitted that the Reich, having taken over income tax matters, was the legal successor of Prussia and was therefore bound by the Treaty of 10 August, 1909.

Held: that the appeal must be dismissed. It could not be admitted that the Reich as the legal successor of Prussia was bound by the Treaty of 10 August, 1909. The Reich had not taken over the income tax of the Federal States: it created a new income tax for the whole Reich. “There is no rule of international law to the effect that the Reich, having assumed the right to impose income tax and having regulated it by Federal law, thereby succeeded to the international obligations which the Federal States had accepted under the treaties concerning double taxation concluded with foreign States.” Whatever might be the international validity of the Treaty1 in question, it had now lost its object seeing that the Federal State could no longer collect...

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