Tax-Exempt Foundations

Death of Aldi Founder Renews Debate Over Fairness of Germany's Inheritance Taxes

Nortorf, Germany
Nortorf, a rural town in north Germany's Holstein district near Denmark, is the home of the Markus Stiftung, the charity of the deceased Aldi co-founder Theo Albrecht.
  • Why it matters

    Why it matters

    Current rules might make it easier for Germany’s wealthiest to dodge appropriate taxation.

  • Facts

    Facts

    • Some Social Democrats seek changes to increase inheritance tax revenues.
    • Foundations set up by the founders of Aldi have reignited the tax debate.
    • Most experts say the current model doesn’t make it possible to avoid taxes.
  • Audio

    Audio

  • Pdf

The recent death of Karl Albrecht, co-founder of the German discount grocery chain Aldi, has fired up the debate in the center-left Social Democratic Party (SPD) about the inheritance tax.

“Up to now, the rules have offered the super-rich, in particular, numerous loopholes to avoid appropriate taxation,” said the party’s Joachim Poss.

Thorsten Schäfer-Gümbel, deputy to SPD party chairman Sigmar Gabriel, told Handelsblatt: “We will insist that, in a reform of the inheritance tax, there be a close inspection of the present strategies involving foundations.” He fears foundations serve as a way to avoid inheritance taxes.

The most prosperous members of society cannot be allowed to leave the financing of social programs to employees, craftsmen and the middle class,” he said.

The background for their displeasure: Decades ago, Mr. Albrecht and his brother Theo brought their respective firms Aldi-Süd and Aldi-Nord under the umbrella of foundations.

No inheritance taxes from Aldi’s corporate assets were paid following their deaths.  Theo died four years ago and Karl passed away last month.

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