Bundesverfassungsgericht: Firmenerben bevorzugt? Karlsruhe prüft Steuerprivilegien

The Bundesverfassungsgericht (Federal Constitutional Court) is currently examining whether tax privileges for business heirs are compatible with the Basic Law in Germany. The court has begun its proceedings in Karlsruhe, following a complaint from a man who inherited private wealth but not a tax-privileged business estate. The case asks whether he is unfairly disadvantaged in terms of taxes compared to business heirs. A verdict is expected in a few months.

Several legal issues and political debates surround the topic. Who currently pays inheritance tax and how much? Inheritance tax is generally payable by anyone who receives assets from the death of another person. The value of the inheritance and the degree of relationship to the deceased determine the tax rate, which ranges from 7 to 50 percent. Germans estimate that 200 to 400 billion euros change hands annually through inheritances and gifts. In 2025, the state collected 21.4 billion euros in inheritance taxes.

Are there any exceptions? Most inheritances and gifts fall within statutory exemptions. Spouses can inherit up to 500,000 euros tax-free, children up to 400,000 euros, and inherit the family home tax-free if they move in for at least ten years and the property does not exceed 200 square meters. Under German law, up to 85 percent of business assets can escape inheritance tax if the heir continues the business for at least five years.

A complete exemption is possible if the inheritance is held for seven years and other conditions are met. These privileges apply only to assets under 26 million euros. Larger businesses may have more generous rules.

What do the critics say? Wealth is very unevenly distributed in Germany, according to Julia Jirmann of the Steuergerechtigkeit (Tax Justice) network. Inheritance and gift tax plays an increasingly large role in building private wealth – more than half of private wealth today is inherited or gifted rather than earned during a person's lifetime.

Apart from distributional and constitutional concerns, generous rules for business assets also stifle innovative entrepreneurship. The German Trade Union Confederation (DGB) calls the privileges "unfair" and demands their abolition. The DGB's Stefan Körzell argues that these special rules for business assets are the single largest tax subsidy in the German government's subsidy report, costing nearly nine billion euros alone this year.

Körzell says the money is urgently needed for important investments in education, infrastructure, and social security.

What do the companies say? The Federation of German Industries (BDI) defends the privileges for business assets. A high company value does not necessarily mean heirs have corresponding liquid assets. Business assets are often long-term tied up in machinery or buildings, the association argues. The tax privileges are therefore not a personal privilege of heirs, but serve the protection of company units.