Further rejection of privileged tax claims by tax authorities – HEUKING obtains landmark decision from Federal Court of Justice in insolvency claw-back disputes

In an insolvency claw-back dispute conducted by Heuking Partners Dr. Stephan Degen and Dr. Marc Scheunemann in collaboration with Dr. Jörg Semmler, lawyer at the Federal Court of Justice, Federal Court of Justice’s Civil Senate IX issued a judgment in favor of the claimant Dr. Biner Bähr on February 8, 2024 (IX ZR 194/22). The decision has fundamental implications for claw-back claims filed against the tax authorities under insolvency law beyond the specific case. The appeal proceedings pertained to the contesting of a payment of import VAT made during the coronavirus pandemic in the double-digit million Euro range to Düsseldorf Main Customs Office (defendant, debtor of the claw-back claims). The insolvency senate of the Federal Court of Justice (IXth Senate) dismissed the defendant’s appeal against the September 15, 2022 judgment of Düsseldorf Higher Regional Court (I-12 U 7/22) primarily on the following grounds:

Firstly, Section 2(1)(4) Act to Temporarily Suspension of the Obligation to File for Insolvency and to Limit Directors’ Liability in the Case of Insolvency Caused by the COVID-19 Pandemic, which limited the claw-back of payments during the corona pandemic, is per se only applicable to the satisfaction of the insolvency debtor’s contractual liabilities, but not to statutory liabilities such as taxes or social security contributions.

Secondly, the IXth Senate rejected the defendant’s “dolo agit” objection. According to Section 17(3) sentence 1 German VAT Act, the claw-back claim (aimed at repayment of import VAT) cannot be used to counteract potential subsequent input tax corrections.

The Federal Court of Justice ruling is welcome because it is consistent with Section 1 German Insolvency Code, which stipulates that insolvency proceedings serve the best possible and equal satisfaction of all creditors. Correspondingly, tax authorities cannot defend claw-back claims directed against them by resorting to alleged counterclaims that have not even been demonstrated on the merits.

Counsel to Dr. Biner Bähr

Dr. Stephan Degen, Maître en Droit, Munich
Dr. Marc Scheunemann, LL.M., Düsseldorf/Frankfurt

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