The German Constitutional Court recently made a decision regarding the status of international treaties in the German legal system. The judgement became necessary after the Federal Fiscal Court claimed that a certain section of the Income Tax Code is unconstitutional. This section overrode a rule in the double taxation agreement between Turkey and Germany that exempts income earned in Turkey from the German Income Tax. The Fiscal Court claimed that international treaties are part of the international law and can therefore not be changed by a law that is made by the Bundestag.
International treaties become part of federal law
The Constitutional Court disagreed and stated that international treaties do not become part of the international law. Instead, they will become part of the ordinary federal law in Germany. Therefore, the principle of democracy allows any elected parliament to overturn those treaties at its own discretion (“Treaty Override”).
Continue reading:
International Tax Planning for businesses: What to pay attention to
