The Association of Family Business Owners has issued a warning about the severe negative consequences that a constitutional court ruling on inheritance tax could have for Germany’s economic standing. Marie-Christine Ostermann, the association’s president, told the “Rheinische Post” that the most damaging scenario would be a ruling determining that the current exemptions for business assets are unconstitutional.
According to Ostermann, the current tax rates, if challenged, would massively endanger the corporate substance within the country. She warned that an inheritance tax that fails to recognize the specific social function of business assets would be detrimental not only to companies themselves but also to the overall economic standing and prosperity of Germany. In her statement, she stressed that a ruling eliminating these exemptions would act like a severe blow to private investment and would deter entrepreneurs from investing in Germany.
The trend of transferring company shares abroad due to “other poor conditions” in Germany is already visible, she noted. Ostermann clarified that a crucial requirement is for the court in Karlsruhe to acknowledge that business assets are fundamentally different from mere private assets. She concluded that transitioning a family company to the next generation must be feasible without depleting the business’s liquidity for investment and growth, thereby safeguarding the future sustainability of companies and jobs.
Oral proceedings concerning the inheritance tax are scheduled to take place at the Federal Constitutional Court on Monday and Tuesday. A definitive judgment is anticipated either at the end of the year or early 2027.
