Tax million dispute: Wilhelmshaven vs. East Frisia over wind farm money!

Tax million dispute: Wilhelmshaven vs. East Frisia over wind farm money!

A heated dispute over offshore tax money is raging in Lower Saxony, and the focus is on Wilhelmshaven. From 2026, the city will be named as the central collector of trade tax for wind farms in the North Sea. This brings potential revenue of around 110 million euros, of which 65 million euros are to be distributed to other municipalities. This has caused a lot of excitement for some, especially in the neighboring East Frisian municipalities such as Wittmund, Emden, Aurich and Norden, who feel ignored. However, there is guidance in the recent resolutions of the Lower Saxony state government, which pushed forward the changes to the trade tax ordinance. This is intended to ensure that the municipalities in Lower Saxony benefit from the income and not just the cities in which the operators of the wind farms are based.

“I feel disadvantaged,” Mayor Florian Eiben (SPD) from the north is quoted as saying, emphasizing that his municipality accounts for 60 percent of the offshore output in Lower Saxony. This is a significant number, especially since the East Frisian municipalities bear a disproportionate burden for the development of wind power, while Wilhelmshaven enjoys a massive financial advantage. Bundestag member Johann Saathoff (SPD) supports the municipalities' demands for a fairer distribution of trade tax revenue and criticizes the planned regulations. Legal clarification is also not ruled out, as the CDU in Esens is considering taking steps against it.

The background to the new regulation

Why exactly is this argument breaking out? In December 2024, the Federal Finance Court decided in favor of the city of Oldenburg that trade tax is clearly municipal revenue. This means that Wilhelmshaven has the right to collect trade tax for the offshore wind farms. This is happening against the backdrop of a protracted legal dispute over tax collection in unincorporated areas where many wind farms are located. The new regulation not only secures income for Wilhelmshaven, but also ensures that part of the money flows to other municipalities in Lower Saxony through the municipal financial equalization. On average, 36 million euros could remain in Wilhelmshaven to reduce the municipal budget deficits, according to Mayor Carsten Feist.

However, the additional income is not available for new, great projects. Rather, they are intended to help plug the financial holes that have opened up due to past budget bottlenecks. This is a clear indication that many cities in Lower Saxony are under high financial pressure and urgently need additional sources of income.

Regional reactions and possible models

Opinions about the planned changes are divided. While Wilhelmshaven acts as an “energy hub” and takes on important functions for the energy transition via network connections and substations, those affected from East Frisia feel treated unfairly. Industry associations such as the BWO support their demands and criticize the plans as “insufficient generalizations”. A model from Schleswig-Holstein, which provides for a balanced distribution of offshore tax revenues, is viewed as exemplary and could possibly also be helpful for Lower Saxony.

Overall, it remains to be hoped that a solution will be found in the interests of all those involved, which will not only do justice to the municipalities in Wilhelmshaven but also to the East Frisian cities. Because everyone has contributed their part to the transition towards more sustainable energy production - we have to pull together.

Further information on the background and current developments can be found under the following links: NWZonline, NDR, Lower Saxony State Chancellery.