If the tax authorities are unable to determine precisely whether a person is the principal taxpayer or merely a liable party for a tax, they may on occasion resort to a special instrument: the so-called ‘notice of assessment by election’. The Federal Fiscal Court (BFH) has now left open – at least for the time being – whether this is permissible under tobacco tax law and has granted the person concerned interim legal protection.
What is an election result notification?
A notice of assessment combines two essentially different types of liability into a single notice. In it, the tax authority claims tax either from the principal taxpayer under Section 155 of the Tax Code or from a person liable under Section 191 of the Tax Code. This may sound practical, but it raises significant legal questions. According to the case law of the Federal Fiscal Court (BFH), tax liability and liability as a guarantor are, in principle, mutually exclusive. A person who is directly liable for a tax cannot at the same time be held liable via a liability notice.
The case: Untaxed cigarettes with an unknown route of transport
The Main Customs Office issued a notice of optional assessment in respect of tobacco duty to the person concerned. The man had been in possession of and had traded in untaxed cigarettes. However, it was unclear whether the cigarettes had been imported from a third country or brought into German tax territory from another EU Member State. This distinction is crucial in determining whether the individual concerned is liable for the tax or is deemed liable for tax evasion or the handling of contraband.
As the Main Customs Office was unable to ascertain the exact route of transport, it opted to issue a discretionary assessment notice. The person concerned lodged an appeal and applied for a stay of enforcement so as not to have to pay the amount specified in the notice for the time being. The Hessian Finance Court rejected the application for a stay of enforcement and considered the discretionary assessment notice to be permissible in principle.
The Federal Fiscal Court grants interim relief
The Federal Fiscal Court did not concur with this assessment in the appeal proceedings. The Senate noted that, in its more recent case law, it had not ruled on the admissibility of such an instrument. The only relevant decision dates from 1983 and, at that time, found no substantial doubts regarding tax assessment notices in comparable circumstances. As this issue has not since been reassessed by the highest court, the Federal Fiscal Court (BFH) considers that, upon summary examination, there are serious doubts as to the legality of the contested notice.
The Federal Fiscal Court (BFH) expressly reserved the right to make a final decision on whether tax assessment notices are permissible under tobacco tax law until the main proceedings. In the meantime, it ordered a stay of enforcement without the requirement to provide security. The person concerned is therefore not required to pay the amount for the time being.
Federal Fiscal Court (BFH), ruling of 10 September 2026, case number VII B 24/25 (AdV)
What does this mean in practice?
This decision is relevant to anyone faced with excise duty proceedings or similar situations in which the authorities seek to resolve an unclear situation by means of a combined notice. Those affected should be aware that such a provisional assessment notice may be open to challenge. In any case, it is advisable to seek legal assistance at an early stage, as the time limits for lodging objections and bringing legal proceedings are short, and an application for administrative review must be submitted separately.
Source: Haufe: Tax
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