Chapter X Finance

Article 104a: Apportionment of expenditure between the Federation and the Lander
1. The Federation and the Lander shall separately meet the expenditure resulting from the discharge of their respective tasks insofar as this Basic Law does not provide otherwise.
2. Where the Lander act as agents of the Federation, the Federation shall meet the resulting expenditure.
3. Federal statutes to be executed by the Lander and granting money payments may make provision for such payments to be met wholly or in part by the Federation. Where any such statute provides that the Federation shall meet one half of the expenditure or more, it shall be implemented by the Lander as agents of the Federation. Where any such statute provides that the Lander shall meet one quarter of the expenditure or more, it shall require the consent of the Bundesrat.
4. The Federation may grant the Lander financial assistance for particularly important investments by the Lander or communes or associations of communes, provided that such investments are necessary to avert a disturbance of the overall economic equilibrium or to equalize differences of economic capacities within the federal territory or to promote economic growth. Details, especially concerning the kinds of investments to be promoted, shall be regulated by a federal statute requiring the consent of the Bundesrat or by administrative arrangements under the federal budget law.
5. The Federation and the Lander shall meet the administrative expenditure incurred by their respective authorities and shall be responsible to each other for ensuring proper administration. Details shall be regulated by a federal statute requiring the consent of the Bundesrat.

Article 105: Legislative powers
1. The Federation has the exclusive power to legislate on customs and fiscal monopolies
2. The Federation shall have concurrent power to legislate on all other taxes the revenue from which accrues to it wholly or in part or where the conditions provided for in paragraph 2. of Article 72 shall apply.
2a. The Lander shall have power to legislate on local excise taxes as long and insofar as they are not identical with taxes imposed by federal legislation.
3. Federal laws relating to taxes the yield of which accrues in whole or in pan to the Lander or the communities:community associations. require the consent of the Bundesrat.

Article 106: Apportionment of tax revenue
1. The yield of fiscal monopolies and receipts from the following tares shall accrue to
The Federation:
1. Customs duties
2. Such excise taxes as do not accrue to the Lander in accordance with paragraph 2.,
3. Turnover tax
4. Transportation tax,
5. Non-recurrent capital levies, and equalization taxes imposed for the purpose of implementing the equalization of burdens legislation,
6. Berlin emergency aid tax.
7. Supplementary levies on income and corporation taxes.
2. Receipts from the following taxes shall accrue to the Lander:
1. Property tax,
2. Inheritance tax,
3. motor-vehicle tax,
4. Such taxes on transactions that do not accrue to the Federation in accordance with paragraph 1.,
5. Beer tax
6. Levies on gambling establishments,
7. Taxes on real estate and business,
8. Taxes with localized application.
3. Receipts from income tax and corporation tax shall accrue: until 31 March 1958, to the Federation and the Lander in a ratio of 33 1/3 per cent to 65 per cent, and from 1 April 1958, to the Federation and the Lander in a ratio of 35 per cent to 65 per cent.
4. The ratio of appointment of the income and corporation taxes paragraph 3. Should be modified by a Federal law requiring the consent of the Bundesrat whenever the development of the relation of revenues to expenditures in the Federation differs from that in the Lander and whenever the budgetary needs of the Federation or those of the Lander exceed the estimated revenues by a margin substantial enough to call for a corresponding adjustment of the ratio of apportionment in favor of either the Federation or the Lander. Any such adjustment shall be based on the following principles:
1. The Federation and the Lander shall each bear the expenditures resulting from the administration of their respective tasks; Article 120 paragraph (1) shall not be affected;
2. There shall be equality of rank between the claim of the Federation and the claim of the Lander to have their respective necessary expenditures covered from ordinary revenues;
3. The requirements of the Federation and of the Lander in respect of budget coverage shall be coordinated in such a way that a fair equalization is achieved, any overburdening of taxpayers precluded, and uniformity of living standards in the Federal territory ensured.
4. The ratio of apportionment may be modified for the first time with effect from I April 1958 and subsequently at intervals of not less than two years after the entry into force of any law determining such ratio; provided that this stipulation shall not affect any notification of such ratio effected in accordance with paragraph 5.
5. If a Federal law Imposes additional expenditures on, or withdraws revenues from the Lander, the ratio of apportionment of the income and corporation taxes shall be modified m favor of the Lander, provided that conditions as envisaged in paragraph (4) have developed. If the additional burden placed upon the Lander is limited to a period of short duration, such burden may be compensated by grants from the Federation under a Federal law requiring the consent of the Bundesrat and which shall lay down the principles for assessing the amounts of such grants and for distributing the them among the Lander.
6. Receipts from taxes on real estate and businesses shall accrue to the communes. In case there are no communes in a Land the receipts shall accrue to the Land. In accordance with Land legislation, taxes on real estate and businesses may be used to ascertain assessments and surtaxes. The receipts of the Lander from income tax and corporation tax shall accrue to the communes and associations of communes in a percentage to be determined by Land legislation. Furthermore, the Land legislation shall determine whether and how much of the receipts of the Land taxes shall accrue to the communes, associations of communes
7. If the Federation establishes special institutions in the Lander or communes, association of communes which cause immediate higher expenditures or lower receipts to those Lander or communes, associations of communes, the Federation shall grant the necessary financial equalization, if and insofar it is anticipated that the Lander or communes, associations of communes are unable to bear these special burdens. Compensation by a third party and financial advantages which accrue to these Lander or communes: associations of communes as a consequence of these institutions shall be considered in such equalization.
8. For the purposes of the present Article, revenues and expenditures of communes, associations of communes shall be deemed to be Land revenues and expenditures.

Article 107: Financial equalization
1. Revenue from Land taxes and the Land share of revenue from income and corporation taxes shall accrue to the individual Lander to the extent that such taxes are collected by revenue authorities within their respective local territories. A federal statute requiring the consent of the Bundesrat may provide in detail for the delimitation as well as the manner and scope of allotment of local revenue from corporation and wage taxes. such statute may also provide for the delimitation and allotment of local revenue from other taxes. The Land share of revenue from the turnover tax shall accrue to the individual Lander on a per capita basis; a federal statute requiring the consent of the Bundesrat may provide for supplementary shares not exceeding one quarter of a Land share to be granted to Lander whose per capita revenue from Land taxes and from the income and corporation taxes is below the average of all the Lander combined.
2. Such statute shall ensure a reasonable equalization between financially strong and financially weak Lander, due account being taken of the financial capacity and financial requirements of communes or associations of communes. Such statute shall specify the conditions governing equalization claims of Lander entitled to equalization payments and equalization liabilities of Lander owing equalization payments as well as the criteria for determining the amounts of equalization payments. Such statute may also provide for grants to be made by the Federation from federal funds to financially weak Lander in order to complement the coverage of their general financial requirements

Article 108: Revenue administration
1. Customs, fiscal monopolies, the excise taxes subject to federal legislation, including the import turnover tax, and charges imposed within the framework of the European Communities shall be administered by federal revenue authorities. The organization of these authorities shall be regulated by Federal law. The heads of the authorities at intermediate level shall be appointed after consultation of the Land governments.
2. All other taxes shall be administered by Land revenue authorities. The organization of these authorities and the uniform training of their civil servants may be regulated by a federal statute requiring the consent of the Bundesrat. The heads of authorities at the intermediate level shall be appointed in agreement with the Federal Government.
3. To the extent that taxes accruing wholly or in part to the Federation are administered by Land revenue authorities, those authorities shall act as agents of the Federation. Federal Minister of Finance, however, being substituted for the Federal Government.
4. In respect of the administration of taxes, a federal statute requiring the consent of the Bundesrat may provide for collaboration between federal and Land revenue authorities, or in the case of taxes under paragraph 1 of this Article for their administration by Land revenue authorities, or i the case of other taxes for their administration by federal revenue authorities, where and to the extend that the execution of revenue statutes is substantially improved or facilitated thereby. As regards taxes the revenue from which accrues exclusively to communes or associations of communes, their administration may wholly or in part be transferred by the Lander from the appropriate Land revenue authorities to communes or associations of communes.
5. The procedure to be applied by federal revenue authorities shall be laid down by federal legislation. The procedure to be applied by Land revenue authorities or, as envisaged in the second sentence of paragraph 4 of this Article, by communes or associations of communes may be laid down by federal statute requiring the consent of the Bundesrat.
6. The jurisdiction of revenue courts shall be uniformly regulated by federal legislation.
7. The Federal Government may issue appropriate general administrative rules which, to the extent that administration is entrusted to Land revenue authorities or communes or associations of communes, shall require the consent of the Bundesrat.

Article 109:Budget management in the Federation and the Lander
1. The Federation and the Lander shall be autonomous and independent of each other in their budget management.
2. The Federation and the Lander shall have due regard in their budget management to the requirements of overall economic equilibrium.
3. Through federal legislation requiring the consent of the Bundesrat, principles applicable to both the Federation and the Lander may be established governing budgetary law, responsiveness of budget management to economic trends, and financial planning to cover several years ahead.
4. With a view to averting disturbances of the overall economic equilibrium, federal legislation requiring the consent of the Bundesrat may be enacted providing for:
1. maximum amounts, terms and timing of loans to be raised by territorial entities Gebietskörperschaften or special purpose associations Zweckverbände and
2. an obligation on the part of the Federation and the Lander to maintain interest-free deposits at the Deutsche Bundesbank (reserves for counterbalancing economic trends) Authorizations to issue the relevant ordinances may be conferred on Federal Government only. Such ordinances shall require the consent the Bundesrat. They shall be repealed insofar as the Bundestag may demand; details shall be regulated by federal legislation.

Article 110: Budget and budget law of the Federation
1. All revenues and expenditures of the Federation shall be included in the budget; in respect of federal enterprises and special assets, allocations thereto or remittances therefrom need be included. The budget shall be balanced as regards revenue and expenditure.
2. The budget shall be laid down in a statute covering one year or several fiscal years separately before the beginning of the first of those fiscal years. Provision may be made for parts of the budget to apply to periods of different duration, but divided into fiscal years.
3. Bills within the meaning of the first sentence of paragraph 2 of this Article as well as bills to amend the budget statute and the budget be submitted simultaneously to the Bundesrat and to the Bundestag; the Bundesrat shall be entitled to state its position on such bills within weeks or, in the case of amending bills, within three weeks.
4. The budget statute may contain only such provisions as apply to revenues and expenditures of the Federation and to the period for which the budget statute is being enacted. The budget statute may stipulate these provisions shall cease to apply only upon the promulgation of the next budget statute or, in the event of an authorization pursuant to Article 115, at a later date.

Article 111: Interim budget management
1. If, by the end of a fiscal year, the budget for the following year has not been established by a law, the Federal Government may, until such law comes into force, make all payments which are necessary:
a. to maintain institutions existing by law and to carry out measures authorized by law;
b. to meet legal obligations of the Federation;
c. to continue building projects, procurements and other services or to continue the grant of subsidies for these purposes, provided amounts have already been authorized in the budget of a previous year.
2. Insofar as revenues provided by special legislation and derived from taxes, levies, or other sources, or the working capital reserves, do not cover the expenditures set forth in paragraph 1, the Federal Government may borrow the funds necessary for the conduct of current operations to a maximum of one quarter of the total amount of the previous budget.

Article 112: Expenditures in excess of budgetary estimates
Expenditures in excess of budgetary appropriations and extra budgetary expenditures shall require the consent of the Federal Minister of Finance. Such consent may be given only in the case of an unforeseen and compelling necessity. Details may be regulated by federal legislation.

Article 113: Consent of the Federal Government to increases in expenditures or decreases in revenue
1. Statutes increasing the budget expenditures proposed by the Federal Government or involving or likely in future to cause new expenditures shall require the consent of the Federal Government. This shall also apply to statutes involving or likely in future to cause decreases in revenue. The Federal Government may demand that the Bundestag postpone vote on such bills. In this case the Federal Government shall state its position to the Bundestag within six weeks.
2. Within four weeks after the Bundestag has adopted such a bill, Federal Government may demand that it votes on that bill again.
3. Where the bill has become a statute pursuant to Article 78, the Federal Government may withhold its consent only within six weeks and only after having initiated the procedure provided for in the third and fourth sentences of paragraph 1 or in paragraph 2 of the present Article. Upon the expiry of this period such consent shall be deemed to have been given.

Article 114: Rendering and auditing of accounts
1. The Federal Minister of Finance shall, on behalf of the Federal Government, submit annually to the Bundestag and to the Bundesrat their approval an account, covering the preceding fiscal year, of revenues and expenditures as well as of property and debt.
2. The Federal Audit Office, the members of which shall enjoy judicial independence, shall audit the account and examine the management the budget and the conduct of business as to economy and correctness. The Federal Audit Office shall submit an annual report directly to Federal Government as well as to the Bundestag and to the Bundesrat In all other respects the powers of the Federal Audit Office shall regulated by federal legislation.

Article 115: Procurement of credit
1. The borrowing of funds and the assumption of pledges, guarantee or other commitments, as a result of which expenditure may be incurred in future fiscal years, shall require federal legislative authorization indicating, or permitting computation of, the maximum amount involved. Revenue obtained by borrowing shall not exceed the total expenditures for investments provided for in the budget; exceptions shall be permissible only to avert a disturbance of the overall economic equilibrium. Details shall be regulated by federal legislation.
2. In respect of special assets of the Federation, exceptions to the provisions of paragraph 1 of this Article may be authorized by federal legislation.