The authorities of Munich intend to file a complaint with the Federal Constitutional Court in Karlsruhe against the ban on introducing an accommodation tax for tourists and business travelers. This ban was imposed by the federal state of Bavaria, which amended municipal law after the city council approved a five percent tax rate in March 2023. Mayor Dieter Reiter and city treasurer Christoph Frey believe the ban violates the city's constitutional right to self-government. Previously, Munich, together with Bamberg and Günzburg, already lost a case before the Bavarian Constitutional Court. Potential revenue from the tax is estimated at over 100 million euros annually.

Complaint to federal court

Munich Mayor Dieter Reiter (SPD) and city treasurer Christoph Frey (SPD) will propose to the city council that a constitutional complaint be filed with the Federal Constitutional Court in Karlsruhe. Their goal is to overturn the ban imposed by the federal state of Bavaria, which prevents the city from introducing an accommodation tax.

Conflict of competencies

The dispute concerns the constitutional principle of municipal self-government. The Munich authorities claim that the ban introduced by Bavaria through an amendment to municipal law violates their fundamental right to decide on their own municipal taxes. In November 2023, the Bavarian Constitutional Court already rejected an earlier complaint from the cities.

Potential revenue and precedent

According to estimates, the accommodation tax could bring Munich annual revenues exceeding 100 million euros. The city authorities argue that similar taxes already exist in other major German cities, such as Berlin, Hamburg, or Frankfurt, highlighting unequal treatment.

Next steps

The decision to file a complaint with the federal constitutional court still requires approval from the Munich city council. If the council agrees, the case will go to Karlsruhe, where a ruling could take months or years, setting a precedent for relations between states (Länder) and municipalities in Germany.

The authorities of Munich are preparing to escalate a legal dispute over the possibility of imposing an accommodation tax. Mayor Dieter Reiter and city treasurer Christoph Frey announced they will propose to the city council that a constitutional complaint be filed with the Federal Constitutional Court in Karlsruhe. The goal is to overturn the ban imposed by the federal state of Bavaria, which prevents cities from collecting the so-called accommodation tax. This conflict has deeper roots. In March 2023, the Munich city council passed a resolution to introduce a five percent rate of this tax on the price of accommodation. In response, however, the Bavarian state parliament (Landtag) amended municipal law, prohibiting municipalities from collecting such a fee. The Munich authorities consider this change a violation of their constitutional right to self-government. In November 2023, Munich, together with the cities of Bamberg and Günzburg, suffered a defeat in the first instance – the Bavarian Constitutional Court dismissed their complaint. Now Mayor Reiter intends to appeal to Germany's highest court. He argues that since other German metropolises, such as Berlin, Hamburg, Cologne, Frankfurt am Main, Dresden, or Dortmund, can collect such a tax, Munich is being unfairly discriminated against. According to estimates cited in the German press, the tax could generate over 100 million euros in additional annual revenue for the city. ponad 100 mln € — potential annual revenue from the tax for Munich The right to municipal self-government is guaranteed in the German Basic Law (Grundgesetz). It includes the so-called "own affairs of the municipality," which traditionally also encompass the right to set municipal taxes and fees. However, relations between states (Länder) and municipalities are often tense, especially on financial matters, where states frequently attempt to limit the competencies of local governments.The final decision to refer the case to Karlsruhe lies with the Munich city council. If the council agrees, the dispute could become a precedent-setting case defining the limits of municipal financial autonomy in Germany. The ruling of the Federal Constitutional Court will be crucial not only for Munich but also for other Bavarian cities and for the general shape of municipal law in the country.

Mentioned People

  • Dieter Reiter — Mayor of Munich (SPD), initiator of the constitutional complaint.
  • Christoph Frey — City treasurer of Munich (SPD), co-initiator of the complaint.