Tübingen packaging tax statute is constitutional

Tübingen’s packaging tax is constitutional. The Federal Constitutional Court has rejected a constitutional complaint against the packaging tax statutes of the University City of Tübingen. The decision of November 27, 2024 (1 BvR 1726/23) was published on January 22, 2025. With the packaging tax statute, the city of Tübingen has been levying a tax on the consumption of disposable tableware and cutlery used to sell food and drinks for consumption on site or for take-away since January 1, 2022. The final seller is obliged to pay the tax. The complainant in the proceedings was a company that operates a fast food restaurant in Tübingen.

Tax legislation competence lies with the city

In the opinion of the Federal Constitutional Court, the constitutional complaint is unfounded. The complainant had argued that the city had no competence to legislate on taxes. The judges in Karlsruhe did not agree. The city of Tübingen could invoke the tax legislative competence of the federal states to levy local excise duties in accordance with Art. 105 Para. 2a Sentence 1 GG, Section 9 Para. 4 Kommunalabgabengesetz Baden-Württemberg (Baden-Württemberg Municipal Tax Act) for the packaging tax statute. In particular, the packaging tax is a “local” excise duty within the meaning of Art. 105 para. 2a sentence 1 GG. According to § 1 Para. 1 Alt. 1 of the packaging tax statute, the tax liability is linked to the sale of disposable materials that are used in the sale of food and beverages “for direct consumption on the spot”. This means that the necessary local connection of consumption is readily given. It cannot be ruled out that, in atypical cases, food and drink may be consumed outside the municipal area at a distance from the point of sale, contrary to the intended purpose. However, these atypical cases do not change the local connection. According to the court, locality can also apply to goods that are not “intended for consumption at the place of sale” if consumption typically takes place in the municipal area. The nature of the goods in particular can speak in favor of this. The other circumstances, such as the supply structure or the size of the municipality, must also be taken into account. A tax liability based on this presupposes that those goods are named in the taxable event or can be determined on the basis of specific criteria that are typically consumed within the boundaries of the respective municipality following the sale. The legislator has a margin of appreciation here.

Tübingen packaging tax does not contradict federal waste legislation

The Tübingen packaging tax is also not in conflict with the legal system, in particular not with federal waste legislation. Section 12 of the Disposable Plastics Fund Act also provides for a tax on disposable plastics. However, the Tübingen packaging tax does not improperly deprive the disposable plastics fund of its financial basis.

No interference with the freedom to choose an occupation

The judges were also not convinced by the complainant’s argument that the tax infringed her freedom to exercise her profession. It is true that the levying of the packaging tax, which is designed as an incentive tax, interferes with the freedom of the final seller to exercise their profession, which is protected by Article 12 (1) of the Basic Law. However, this interference is formally and materially constitutional. There are no indications that the packaging tax, which is suitable and necessary to generate revenue, unreasonably impairs the final sellers. There were no indications that the packaging tax would have the effect of forcing the closure of the business. The interference with the freedom of occupation of the final vendors through their use as paying agents is also proportionate, as it is the only practicable way to collect the tax.

Conclusion and outlook

As a result, the decision strengthens municipal scope for action in the fight against the “littering” of city centers and the environment by disposable packaging. In conjunction with the German Federal Packaging Act (see also the new EU Packaging Regulation), which provides for mandatory reusable packaging for food and drinks to-go from 2023 onwards, the disorderly disposal of waste in public spaces can be further reduced in this way. It remains to be seen whether other municipalities will follow Tübingen’s example as part of their waste prevention concepts, but it is to be expected.

Please note that the packaging tax in question should not be confused with the EU plastic tax, which has not yet been introduced in Germany. In all likelihood, this will not come into force before January 1, 2026 and will be levied by the federal government, not by the municipalities.

Authors:

Mario Urso, Partner, Tax, KPMG AG Wirtschaftsprüfungsgesellschaft Dr. Simon Meyer, Partner, KPMG Law Rechtsanwaltsgesellschaft mbH