Senate's fate hangs in balance, awaiting Federal Finance Court decision
The Federal Fiscal Court (BFH) in Germany is undergoing a significant change, with the dissolution of its XI. Senate and a subsequent reduction in staff. This restructuring, part of broader government adjustments following the formation of the new federal government in 2025, is aimed at improving efficiency under constrained staffing conditions.
The BFH, the highest court for tax and customs disputes, will continue to provide law in the usual and competent manner expected by the taxpayers. However, with fewer judges and less personnel, the speed and capacity of resolving tax and customs disputes may be adversely affected, causing delays in legal clarity and outcomes for taxpayers and businesses.
BFH President Hans-Josef Thesling has stated that this reduction will not impair effective legal protection. He further clarified that there will be no forced transfers of judges from the BFH to other courts, and no judges retiring from the BFH will be replaced. Instead, the cases of the dissolved XI. Senate at the BFH will be taken over by a reduced number of senates (V. and IX.).
This judicial restructuring coincides with a new coalition government formed in May 2025, which has set priorities including digitalization and reducing bureaucracy. While no explicit mention of the BFH's senate loss is present in the retrieved search results, such changes typically align with budgetary and administrative reforms when new governments take office, especially under pressures to cut or streamline public spending.
The number of court cases in all branches of civil jurisdiction has decreased significantly in recent years, making austerity measures at federal courts like the BFH relatively rare. The BFH will have 53 judges instead of 60 after the dissolution, a reduction that the court assures will not affect the quality of legal protection.
It's worth noting that the plans to make going to court more attractive for citizens were initiated by the previous coalition of traffic light parties. The "Neue Juristische Wochenschrift" reported on these measures in the spring. Despite the reduction in the number of senates, the BFH is expected to continue functioning effectively.
The Federal Administrative Court is also losing judge positions, indicating a broader trend of judicial restructuring within the German judicial system. The impetus for these austerity measures came from Berlin, reflecting the government's efforts to streamline public spending and improve efficiency in the judiciary.
In 2015, the BFH had 2,632 cases, and in 2024, there were 1,744 cases, indicating a significant decrease in court cases over the years. This restructuring, while aimed at improving efficiency, may have implications for the timely resolution of tax and customs disputes, potentially impacting taxpayers awaiting court decisions.
Despite the restructuring and reduction in staff at the Federal Fiscal Court (BFH), business owners and taxpayers may experience delays in the resolution of tax and customs disputes due to fewer judges and less personnel. The BFH's continued focus on digitalization and reducing bureaucracy within the judiciary will likely affect the speed and capacity of legal clarity and outcomes in finance-related matters.
