Germany Awaits Key Court Ruling on Solidarity Surcharge's Future

A decision on the surcharge's constitutionality could reshape fiscal policy, with billions in federal revenue at stake.

The Federal Constitutional Court is set to rule on March 26, 2025, on whether the solidarity surcharge is constitutional.
The surcharge, introduced in 1991 to fund reunification, now applies only to high-income earners and businesses, generating 12-13 billion euros annually.
If deemed unconstitutional, the federal government could face retroactive repayment costs of up to 65 billion euros, complicating fiscal planning.
The complaint was filed in 2020 by six FDP lawmakers, arguing the surcharge is no longer justified after the Solidarity Pact ended in 2019.
The decision comes at a critical time for Germany's incoming Merz-led government, potentially impacting coalition negotiations and tax policies.