Court Orders Germany to Repay $3 Billion in Taxes to Nuclear Operators

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Researched by Industrial Info Resources (Sugar Land, Texas)--A Hamburg court ordered Germany to repay power utility firms a combined 2.2 billion euros (US$3 billion) in nuclear-fuel taxes after they mounted a legal challenge to the charges introduced in 2011. Customs offices must repay five reactor operators, the finance court said in a statement.

Of the total to be repaid, the court said, 390 million euros would go to RWE (XETRA:RWE) (Essen, Germany) and 1.7 billion euros (US$2.35 billion) to E.ON (XETRA:EOAN) (Düsseldorf, Germany). The Hamburg court sees the tax as unconstitutional. It said in the statement that the tax "doesn't tax the use of nuclear fuel or electricity, but is to skim profits of plant operators."

RWE's total claim is 950 million euros (US$1.31 billion), and EON's is 1.9 billion euros (US$2.62 billion) for 2011-13. It is now up to the Munich Court to rule, and the utilities could see all of their claims being repaid. The Constitutional Court in Germany should have the final word on the matter, with a ruling likely by the end of this year or early next year. The Hamburg court has asked the European Court of Justice and Germany's top constitutional court to review whether the tax is valid.

"But the German government, which budgeted 2 billion euros (US$2.76 billion) of income from this tax, could decide to introduce a new tax, written in such a way it doesn't go against the constitution. So any enthusiasm on both stocks could be short lived," said Alberto Ponti, an analyst at Societe Generale in London.

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