The road to Munich as the final instance
The Federal Fiscal Court (BFH) is the final specialised court instance in tax matters. Unlike first instance proceedings before the fiscal court, an appeal does not lie as of right — it must either be admitted by the fiscal court or fought through a complaint against non-admission. The hurdles are high, but for the right cases the journey is worthwhile.
The three grounds for admission
An appeal is admitted where one of three grounds is met (Section 115 (2) FGO): the case is of fundamental significance — the legal question concerns a large number of comparable cases and has not yet been settled by the highest court. The development of the law or securing uniform case law requires a BFH decision — for example because the fiscal court departs from BFH case law or that of another fiscal court (divergence). Or a procedural defect exists that may have affected the decision — for example a violation of the right to be heard.
Complaint against non-admission: high substantiation requirements
If the fiscal court does not admit the appeal, a complaint against non-admission remains available — to be lodged within one month of service of the judgment and reasoned within two months (Section 116 FGO). The statement of grounds must not merely assert the ground for admission but substantiate it: for fundamental significance, for instance, why the legal question is in need of clarification and capable of clarification, and why it is of significance beyond the individual case. Blanket criticism of the first instance decision does not suffice and leads to rejection as inadmissible — regardless of whether the decision was wrong on the merits.
When the journey is worth taking
An appeal or complaint against non-admission is typically promising where the decided legal question recurs structurally — for instance on questions of interpretation of recent legislative changes where settled BFH case law does not yet exist, or where different fiscal courts are visibly answering the same question differently. Pure questions of fact or assessment of evidence from the individual case, by contrast, practically never open the road to Munich.
Practical advice
The decision on whether to appeal or file a complaint against non-admission should be made immediately after service of the judgment — the one-month period is short and cannot be extended. Early review of whether a ground for admission is tenable avoids losing valuable time on a statement of grounds that ultimately fails on formal substantiation requirements.
This article presents a simplified overview of the legal position and does not replace advice in individual cases.