Fiscal Court Cologne: 6 % discount rate in case of pension provisions in accordance with the constitution?

The 10th senate of the Fiscal Court in Cologne considers the interest rate of 6 % for the determination of pension provisions in paragraph 6a Income Tax Act (EStG) in 2015 as being excessive and therefore not in accordance with the constitution. For that reason the Federal Fiscal Court decided on October 12, 2017 to suspend the proceeding 10 K 977/17 and to obtain a decision on the constitutionality of the discount rate by the Federal Constitutional Court (BVerfG). For this purpose the Fiscal Court explained that the legislator is authorized to standardize the discount rate. However, the interest rate should periodically be reviewed to ensure that the standardization is still realistic. In case of pension provisions the last adaption took place in 1982. The 10th senate believes that the missing examination and adaption is not in line with the German constitution. Currently the written statement of the order for reference is highly anticipated.

The further course of the procedure should be observed intensively. This procedure is currently not pending at the Federal Constitutional Court (BVerfG) yet. But upon pendency all tax assessments as from 2015 should be kept open. For this purpose an objection and an application for suspension according to paragraph 363 section 2 set 2 AO (German Fiscal Code) have to be filed with reference to the procedure number issued by the Federal Constitutional Court.