The senates and their composition
Responsibility of the individual senates
The responsibility of the individual senates and the composition of their bench of judges is determined by the Court's annual schedule of responsibilities. The schedule of responsibilities is decided by the Presidium of the Court for one calendar year in advance.
The schedule of responsibilities is published at the beginning of each year in the Federal Gazette, the Federal Tax Gazette and in various tax law journals.
Schedule of responsibilities within the senates
Within the senates, matters are assigned by resolution of all judges belonging to the senate in accordance with § 21g of the Judicature Act. Before the beginning of the financial year, the resolution determines for that year the principles according to which the members participate in the proceedings (so-called participation plan); it may only be amended if this becomes necessary due to capacity overload, insufficient utilisation, transfer or long-term unavailability of individual members of the senate.
The following section outlines the substantive responsibility of the eleven specialist senates and the Grand Senate of the Federal Fiscal Court.
The I Senate was - together with the II, III and IV Senate - established on 21 October 1950 as one of the four founding Senates of the Federal Fiscal Court.
Corporation tax was one of its core responsibilities from the outset and still is today. In 1963 the second major complex of responsibilities was added: international tax law, i.e. limited tax liability, treaty law and foreign tax law, supplemented from 1972 onwards by the tax deduction under § 50a of the Income Tax Act, from 1987 by the international provision of information and from 1991 by questions of the deduction of foreign losses. The Senate is also responsible for church tax and, from 2001, also for the building deduction tax (§§ 48 ff. of the Income Tax Act).
The II Senate took up its duties as one of four Senates in October 1950. Initially, it was responsible for litigation concerning property transfer tax, motor vehicle tax, insurance tax, fire protection tax, race betting tax, lottery tax, turnover tax and customs matters. The scope of duties changed over time due to the increased number of appeals received.
Today the II Senate deals mainly with questions of inheritance and gift tax, property transfer tax and the related valuation of land and companies.
The area of responsibility of the III Senate changed several times. To begin with, the area of responsibility corresponded to that of the III Senate of the Reich Fiscal Court. These included the uniform valuation, wealth tax, property tax, until 1959 inheritance and gift tax, and the Reich flight tax. In addition, the Senate was given responsibility for equalisation taxes. In 1976 the responsibility for investment allowances was added.
In 1985 the Senate's remit was changed fundamentally. The remaining responsibility for uniform valuation, property tax and wealth tax was transferred to the II Senate. The III Senate became responsible for income from commercial operations of natural persons and for exceptional charges. From 2005, the Senate was given responsibility for child benefit. Because of the workload caused by the high number of child benefit cases, the Senate relinquished responsibility for exceptional charges from 2009. In 2018 it also took over part of the responsibility for trade tax.
The IV Senate was established on 21 October 1950 as one of the founding senates. Its responsibilities initially included all income tax, double taxation and church tax.
Following the division of responsibility for income tax among several senates, the IV senate was responsible exclusively and together with other senates for income from business operations (as well as trade tax) and self-employment by natural persons and partnerships. In this area, the competence of the IV Senate now extends to the exclusive competence for income from business operations (and trade tax) of partnerships.
Furthermore, the IV Senate was responsible for the income from agriculture and forestry of natural persons (since 1956) and of partnerships (since 1963) until 2016 and took over responsibility for motor vehicle tax from the III Senate on 1 January 2020.
The V Senate was newly constituted on 15 February 1952. As was already the case with the Reich Fiscal Court, it was given responsibility for turnover tax matters, after the II Senate had initially also been responsible for turnover tax matters since the establishment of the Federal Fiscal Court.
Until 1987, the V Senate remained solely responsible for turnover tax. However, turnover tax matters were also partly taken up by the X Senate in 1987. The XI Senate took over this responsibility in 1993 and retained it for proceedings received until the end of 1997. Ten years later, in 2008, the XI Senate then assumed the function of a second turnover tax senate alongside the V Senate because of the volume of incoming cases.
While the V Senate was at times (in the years 2012 to 2017) also responsible for child benefit in addition to the III and XI Senate, from 01 January 2016 it also took over responsibility for corporation tax and trade tax in addition to its responsibility for turnover tax, insofar as disputes exclusively concern questions of tax exemptions. This applies in particular to the law on non-profit-making organisations.
The VI Senate of the Federal Fiscal Court was established on 01 December 1956. As a new judicial body, it was intended to relieve the traditional income tax senates, the I and IV Senate. From the beginning until today, the VI Senate has been and continues to be responsible for income from employment and wage tax. On 31 December 1984 it transferred the responsibility for exceptional charges to the III Senate and assumed it again on 1 January 2009. On 1 January 1986 the Senate assumed responsibility for the special expenses deduction for vocational training costs, which it still holds today.
To this day, the responsibility assumed in 1993 for employee assessment under § 46 of the Income Tax Act, as well as for tax relief for domestic services under § 35a of the Income Tax Act (of 2005), the flat-rate income tax allowances under §§ 37a, 37b of the Income Tax Act (of 2007) and the tax-free allowances for Sunday, holiday or night work under § 3b of the Income Tax Act (of 2008) is still in place. Since 2017 the VI Senate is also responsible for income from agriculture and forestry.
The VII Senate of the Federal Fiscal Court was established on 01 October 1958 simply because the then V Senate, which had been established on 15 February 1952 as the customs and turnover tax senate, was overstaffed with nine judges and had to be divided for constitutional reasons.
Customs, excise duties and financial monopolies were therefore split off and transferred to the newly established VII Senate. From the outset, however, the senate was not just a customs senate. On 01 July 1961, the senate was given further areas of responsibility from the General Fiscal Code concerning assistance in tax matters, offsetting, settlement notices, enforcement, means of enforcement, costs regulated by state law as well as cost assessment and cost determination in court proceedings (until 2006).
As a result of the new allocation of tasks for the customs administration, in 2009 the senate also assumed responsibility for disputes over administrative acts of the customs administration authorities in accordance with the Act to Combat Undeclared Work.
The VIII Senate commenced its activities on 7 June 1971 and took over part of the litigation for which the IV and VI Senates had previously been responsible. At various times it dealt with commercial income of natural persons and its distinction from liberal professions.
When the IX Senate was founded, the responsibility for income from rent and lease transferred from the VIII to the IX Senate. Instead, the VIII Senate received cases on commercial partnerships from the I Senate. Since 01 January 2008, its responsibilities have included – in addition to income from capital assets – income from self-employment, as well as questions of trade tax in cases where the distinction between income from self-employment and income from trade operations is disputed. Since 1 January 2009, disputes concerning the final withholding effect and the separate tax rate for income from capital assets (§ 32d of the Income Tax Act) have also been assigned to the VIII Senate. Since 01 January 2016, the VIII Senate has also been responsible for the tax deduction from capital gains and since 01 January 2018 for questions of local consumption and expenditure taxes.
When it was founded on 1 January 1984, the IX Senate was initially responsible for disputes relating to income from commercial operations of natural persons, other income, special expenses, housing construction and savings premiums and income from renting and leasing; the Senate has since relinquished various responsibilities, but has retained responsibility for income from renting and leasing to this day.
From 1996 onwards, responsibility was assumed for the advance cost deduction under § 10i of the Income Tax Act and for the home ownership subsidy. From 1999, the Senate also assumed responsibility for income from business operations of natural persons under § 17 of the Income Tax Act, for loss deduction under § 10d of the Income Tax Act and limited loss compensation under § 2(3) of the Income Tax Act, as well as for severance payments due to termination of employment and compensation for income from employment.
The X Senate was established on 01 January 1987.
It is responsible for income tax and trade tax, other income (especially pensions), special expenses (§ 10 of the Income Tax Act) and deductions pursuant to § 10e - § 10h of the Income Tax Act, tax relief pursuant to § 34f and § 34g of the Income Tax Act, retirement provision and retirement provision allowance (§§ 10a, 79 et seq. of the Income Tax Act), donations and liability for donations, housing construction premiums and savings premiums as well as compensation claims due to excessive length of proceedings.
The XI Senate was founded on 01 December 1990.
Initially it was concerned with income tax. From its foundation or from a later date, partly exclusively and partly alongside other senates, the XI Senate was essentially responsible for the taxation of severance payments due to termination of employment and compensation for income from employment, the deduction of losses, income from self-employment of natural persons and partnerships, income from business operations of natural persons and temporarily from partnerships, other income, special expenses and liability for donations, tax relief and limited loss compensation.
Since 01 January 2008, the XI Senate is responsible for turnover tax alongside the V Senate. It surrendered all proceedings pending before it on 31 December 2007 and took over some of the proceedings pending before the V Senate on that date. Since then, the responsibility of the XI Senate has included current incoming matters relating to the turnover tax of taxable persons starting with the letters L to Z.
Furthermore, in the period from 01 January 2012 to 31 December 2017, the XI Senate was also responsible for child benefit alongside other senates.
Additionally, since 01 January 2018 the XI Senate has been concerned with the tax accounting law of corporations.
The Grand Senate has existed since the Federal Fiscal Court was established in 1950. This senate deserves its name not only because of its composition, but also because it decides the "grand", important issues.
In procedural matters, but also in factual matters (here in particular income tax, for which seven of the eleven senates are responsible), there may be different opinions between the individual senates on decisions on the same legal issue. In this case, the senate that intends to deviate from a (previously adopted) decision of another senate on a legal issue must ask the other senate whether the latter is adhering to its (previously represented) legal opinion. If the other senate wants to uphold its legal opinion, the senate that intends to enforce the new legal opinion must refer the matter to the Grand Senate of the Federal Fiscal Court (§ 11 of the Code of Procedure of Fiscal Courts). Furthermore, a senate may – without this constituting a deviation from another senate – refer a fundamental question of law to the Grand Senate for a decision if it considers this to be necessary for the further development of the law or to ensure uniform jurisdiction.
Under § 11(5) of the Code of Procedure of Fiscal Courts, the Grand Senate consists of the President and one judge from each of the senates in which the President does not preside. The Grand Senate of the Federal Fiscal Court has eleven members.
The Grand Senate decides only on the legal question submitted to it. Its decision is binding on the referring senate.