Dette er et lengre dokument fra en rettssak i The European Court of Human Rights, Strasbourgh fra 2009 som setter en viktig ´precedent´ for en borgers rett til uhindret aa medbringe sin eiendom over landegrensene uten krav eller straff fra myndighetene i borgerens hjemland. Ref. Kildeskatten.
Article 34 of the
Convention for the Protection of Human Rights and Fundamental
Freedoms
1.“Every
natural or legal person is entitled to the peaceful enjoyment of his
possessions. No one shall be deprived of his possessions except in
the public interest and subject to the conditions provided for by law
and by the general principles of international law.
2.The preceding
provisions shall not, however, in any way impair the right of a State
to enforce such laws as it deems necessary to control the use of
property in accordance with the general interest or to secure the
payment of taxes or other contributions or penalties.”
Punkt 2. sier videre at hvor det er tvetydighet i loven og bestemmelsen kun gjelder for et begrenset antall borgere,skal den lov anvendes som er minst skadelig for borgeren.
Denne rettsavgjoerelsen blir da meget viktig for Norges innfoering av Kildeskatten,da spesielt for minstepensjonistene bosatt i utlandet.
------------------------
In the case of Shchokin v.
Ukraine
The European Court of Human Rights
(Fifth Section)sitting as a Chamber composed of:
Peer Lorenzen, President,
Karel
Jungwiert,
Rait Maruste,
Mark
Villiger,
Isabelle Berro-Lefèvre,
Mirjana
Lazarova Trajkovska,
Ganna Yudkivska,
judges,
and Claudia Westerdiek, Section
Registrar,
Having
delibknut-arild.hareide@stortinget.no erated in private on 21
September 2010,
Delivers the following judgment,
which was adopted on that date:
PROCEDURE
1. The
case originated in two applications (nos. 23759/03 and 37943/06)
against Ukraine lodged with the Court under Article 34 of the
Convention for the Protection of Human Rights and Fundamental
Freedoms (“the Convention”) by a Ukrainian national, Mr Yuriy
Shchokin (“the applicant”),
on 17 June 2003 and 6 September 2006 respectively.
2. The applicant was
represented by Mr A. Shumilov, a lawyer practising in Kyiv. The
Ukrainian Government (“the Government”) were represented by their
Agent, Mr Y. Zaytsev.
3. The
applicant alleged, in particular, that his property rights had been
violated by unlawful increases in his income tax liability by the
authorities.
4. On 15 January 2009
the President of the Fifth Section decided to give notice of the
applications to the Government. It was also decided to examine the
merits of the applications at the same time as their admissibility
(Article 29 § 1).
THE FACTS
I. THE CIRCUMSTANCES OF
THE CASE
5. The applicant was
born in 1971 and lives in Kharkiv.
A. Taxation of the
applicant’s income earned in 2001
6. In March 2002 the
applicant submitted to the Oktyabrskyy District Tax Inspectorate of
Kharkiv (the “Tax Inspectorate”) his 2001 income tax declaration.
The declaration specified the amount of income tax paid by the
applicant in 2001 and distinguished, in particular, two types of
income: (a) income earned at the applicant’s principal
place of business and (b) income earned outside his
principal place of business.
7. In respect of the
first type of income, the tax had been calculated under the
progressive tax-rate rule, as required by Article 7 § 1 of Cabinet
of Ministers Decree no. 13-92 “On citizens’ income tax” of 26
December 1992 (the “Income Tax Decree”).
8. In respect of the
second type of income, the tax had been calculated at the fixed 20%
rate, as required by Article 7 § 3 of the Income Tax Decree.
9. On 9 April 2002, on
the basis of the applicant’s declaration, the Tax Inspectorate
reassessed the amount of income tax due from the applicant and
requested him to pay the outstanding balance in the amount of
1,774.61 Ukrainian hryvnias (UAH). The amount payable had been
increased as a result of applying the progressive tax rate in respect
of the income earned by the applicant outside his principal place of
business. The recalculation had been effected in accordance with
Instruction no. 12 “On citizens’ income tax” issued by the
Principal Tax Inspectorate on 21 April 1993 (“the Instruction”).
10. On 27 May 2002 the
applicant instituted proceedings in the Oktyabrskyy District Court of
Kharkiv (the “District Court”) against the Tax Inspectorate,
seeking to have the decision of 9 April 2002 invalidated. He claimed,
in particular, that the amount of tax payable in respect of his
income earned outside his principal place of business should have
been determined by reference to the special tax rate laid down in
Article 7 § 3 of the Income Tax Decree (having legal force as the
law of Parliament) whereas the Tax Inspectorate had recalculated and
increased that amount relying on the Instruction. However, the
Instruction was a by-law which, according to Article 67 of the
Constitution, could not change the applicable tax rates.
11. On 4 July 2002 the
District Court considered the applicant’s claim. It found that the
Income Tax Decree envisaged a special tax rate for income earned
outside the principal place of business. Despite the Instruction, the
Income Tax Decree did not provide for any recalculation of that type
of income on the basis of the progressive tax rate. It noted that
according to Article 67 of the Constitution the citizens were obliged
to pay taxes only in accordance with the procedure established by the
laws and not by the by-laws. In conclusion the District Court allowed
the applicant’s claim and quashed the decision of 9 April 2002. The
Tax Inspectorate appealed.
12. On 18 December 2002
the Kharkiv Regional Court of Appeal (the “Court of Appeal”)
quashed the judgment of 4 July 2002, stating that the Instruction had
been validly issued and purported to expand on the relevant
provisions of the Income Tax Decree. Accordingly, the Tax
Inspectorate had acted lawfully when applying the Instruction.
13. On 16 April 2003 the
Supreme Court upheld the Court of Appeal’s judgment, stating that
there had been no irregularities in the application of the law in the
case.
B. Taxation of the
applicant’s income earned in 2002
14. In March 2003 the
applicant submitted his 2002 income tax declaration to the Tax
Inspectorate. The amount of tax regarding the income the applicant
earned outside his principal place of business was calculated on the
basis of the fixed tax rate laid down in Article 7 § 3 of the Income
Tax Decree.
15. On 22 April 2003, on
the basis of the applicant’s declaration, the Tax Inspectorate
reassessed the amount of income tax due from the applicant and
requested him to pay the outstanding balance in the amount of
UAH 3,378.05. The amount payable had been increased as a result
of the application of the progressive tax rate in respect of the
income earned by the applicant outside his principal place of
business. The recalculation had been effected in accordance with the
Instruction.
16. On 23 July 2003 the
applicant instituted proceedings in the District Court against the
Tax Inspectorate, seeking to have the decision of 22 April 2003
invalidated. He claimed in particular that the increase in his income
tax liability had not been lawful because the Income Tax Decree
(having legal force as the law of Parliament) did not envisage the
progressive tax rate for the income earned by the applicant outside
his principal place of business. In addition, the Instruction,
referred to by the tax authorities, was a by-law which, according to
Article 67 of the Constitution, could not change the applicable tax
rates.
17. On 20 April 2005 the
District Court rejected the applicant’s claim, stating that the
amount of tax determined by the Tax Inspectorate had been based on
the Instruction and also on Presidential Decree no. 519/94 of
13 September 1994 “On increasing the amount of tax-free
monthly income and rates of progressive taxation of citizens’
income” (“the Presidential Decree”).
18. On 18 May 2005 the
applicant appealed against that judgment to the Court of Appeal,
alleging that Article 7.3 of the Income Tax Decree should have been
applied to the income earned outside the principal place of business.
19. On 30 June 2005 the
Court of Appeal upheld the judgment of 20 April 2005 after
finding that the recalculation of the applicant’s income tax had
been based specifically on the Presidential Decree.
20. On 25 July 2005 the
applicant appealed in cassation, repeating the arguments he had
advanced before the Court of Appeal.
21. On 19 April 2006,
following the applicant’s appeal in cassation, the Higher
Administrative Court upheld the judgment of 20 April 2005, noting in
particular that the Income Tax Decree provided only one scale of
progressive taxation, which therefore had to be applied to all the
income of the applicant, and concluded that the recalculation of the
tax had been carried out in accordance with the law. The special tax
rate provided in Article 7 § 3 of the Income Tax Decree
was not mentioned.
C. Taxation of the
applicant’s income earned in 2003
22. In March 2004 the
applicant submitted his 2003 income tax declaration to the Tax
Inspectorate. The amount of tax regarding the income of the applicant
earned outside his principal place of business was calculated on the
basis of the fixed tax rate laid down in Article 7 § 3 of the Income
Tax Decree.
23. On 26 April 2004, on
the basis of the applicant’s declaration, the Tax Inspectorate
reassessed the amount of income tax due from the applicant and
requested him to pay the outstanding balance in the amount of
UAH 642.20. The amount payable had been increased as a result of
the application of the progressive tax rate in respect of the income
earned by the applicant outside his principal place of business. The
recalculation had been effected in accordance with the Instruction.
24. On 10 August 2004
the applicant instituted proceedings in the District Court against
the Tax Inspectorate, seeking to have the decision of 22 April
2003 invalidated. He claimed, in particular, that the increase in his
income tax liability had not been lawful, because the Income Tax
Decree (having legal force as the law of Parliament) did not envisage
the progressive tax rate for the income earned by the applicant
outside his principal place of business. At the same time the
Instruction, referred to by the tax authorities, was a by-law which,
according to Article 67 of the Constitution, could not change the
applicable tax rates.
25. On 21 July 2005 the
District Court rejected the applicant’s claim, stating that the
amount of tax determined by the Tax Inspectorate had been based on
the Instruction and also on the Presidential Decree.
26. On 17 August 2005
the applicant appealed against that judgment to the Court of Appeal,
alleging that Article 7.3 of the Income Tax Decree should have been
applied to the income earned outside the principal place of business.
27. On 25 October 2005
the Court of Appeal upheld the judgment of 21 July 2005 after
finding that the recalculation of the applicant’s income tax had
been based, in particular, on the Presidential Decree and the Income
Tax Decree. No reasons were offered for the disregard of the special
tax rate fixed in Article 7 § 3 of the Income Tax Decree.
28. On 9 March 2006,
following an appeal in cassation by the applicant, the Higher
Administrative Court upheld the judgment of 21 July 2005, noting that
the recalculation of the tax had been carried out in accordance with
the law.
II. RELEVANT DOMESTIC
LAW AND PRACTICE
A. Constitution of 20
April 1978 (in force until 28 June 1996)
29. According to Article
114-5 of the Constitution the President of Ukraine was empowered to
issue decrees in the field of economic reforms if the relevant
matters were not covered by the laws of Parliament.
B. Constitution of 28
June 1996
30. Article 67 of the
Constitution provides that everyone is obliged to pay taxes and
duties in accordance with the procedure and at the rates established
by the laws of Parliament.
C. The Laws nos.
2796-XII and 2813-XII of 18 and 21 November 1992 empowering of the
Cabinet of Ministers to issue Decrees
31. According to these
Laws, during the period between 24 November 1992 and 21 May 1993, the
Cabinet of Ministers had legislative powers in certain fields,
including the field of taxation. For this purpose, the Cabinet of
Ministers was empowered to issue Decrees which had the legal force as
the law of Parliament.
D. The Law “On the
procedure for payment of taxpayers’ liabilities to budgets and
state funds” of 21 December 2000
32. Section 4.4.1 of the
Law provides that if the norm of the law or another normative legal
act issued on the basis of the law, or if the norms of different laws
or normative legal acts offer ambiguous or multiple interpretations
of the rights and obligations of taxpayers and supervising
authorities, the decision taken shall be in favour of the taxpayer.
E. Cabinet of Ministers
Decree no. 13-92 “On citizens’ income tax” of 26 December 1992
(as worded at the material time)
33. Article 7 § 1 of
the Decree laid down a table of progressive taxation rates in respect
of income earned at the taxpayer’s principal place of business. The
table referred to the concept of an official minimum salary as a
basis for the determination of the progressive tax rate applicable in
the individual case.
34. Article 7 § 2 of
the Decree provided that the copyright awards, repeatedly paid to the
successors, were taxed at the double rates fixed in Article 7 § 1 of
the Decree which, however, could not exceed 70 percents.
35. Article 7 § 3 of
the Decree established a fixed 20% tax rate in respect of income
earned by the taxpayer outside his or her principal place of
business.
36. Article 23 of the
Decree provided that the Principal Tax Inspectorate would issue an
instruction on the application of the Decree.
F. Presidential Decree
no. 519/94 “On increasing the amount of tax-free monthly income and
rates of progressive taxation of citizens’ income” of 13
September 1994 (in force at the material time)
37. The Decree
introduced a new table of progressive taxation rates in respect of
taxpayers’ income. The table referred to the concept of tax-free
monthly income as a basis for the determination of the progressive
tax rate applicable in the individual case. The Decree specified that
the rates of progressive taxation, established in it, had to be
applied as of 1 October 1994 in respect of the salaries and the other
income of the citizens.
G. Principal Tax
Inspectorate Instruction No. 12 “On citizens’ income tax” of 21
April 1993 (as worded at the material time)
38. Paragraph 7.1 of the
Instruction laid down a table of progressive taxation rates in
respect of income earned by a taxpayer at his or her principal place
of business.
39. Paragraph 7.3
provided that the local tax inspectorates were to recalculate income
earned outside the principal place of business, according to the
table of progressive taxation rates set out in paragraph 7.1 of the
Instruction.
H. Information letter of
the State Tax Administration of 20 November 2002
40. By this letter the
State Tax Administration provided official interpretation of certain
issues concerning tax legislation. It specified, among other things,
that the copyright awards repeatedly paid to the successors were to
be taxed in accordance with Article 7 § 2 of the Income Tax Decree.
THE LAW
I. JOINDER
OF THE APPLICATIONS
41. Pursuant to Rule 42
§ 1 of the Rules of Court, the Court decides to join the
applications, given their common factual and legal background.
II. ALLEGED VIOLATION OF
ARTICLE 1 OF PROTOCOL NO. 1
42. The
applicant complained of a violation of his property rights, alleging
that when the tax authorities recalculated and increased the amount
of his income tax, they had not acted in accordance with the law. He
relied on Article 1 of Protocol No. 1, which reads as follows:
“Every
natural or legal person is entitled to the peaceful enjoyment of his
possessions. No one shall be deprived of his possessions except in
the public interest and subject to the conditions provided for by law
and by the general principles of international law.
The preceding
provisions shall not, however, in any way impair the right of a State
to enforce such laws as it deems necessary to control the use of
property in accordance with the general interest or to secure the
payment of taxes or other contributions or penalties.”
A. Admissibility
43. The Government did
not submit any comments as to the admissibility of the complaint.
44. The Court notes that
this complaint is not manifestly ill-founded within the meaning of
Article 35 § 3 of the Convention. It further notes that it is not
inadmissible on any other grounds. It must therefore be declared
admissible.
B. Merits
1. The parties’
submissions
45. The applicant
insisted that the tax authorities had unlawfully increased his income
tax liability. He argued that the authorities had disregarded Article
7 § 3 of the Income Tax Decree establishing a special 20% tax rate
in respect of the income earned outside the principal place of
business. Moreover, when so doing, the authorities relied on the
Instruction which, by virtue of Article 67 of the Constitution of 28
June 1996, could not change the applicable rates of tax and the
procedures for their payment.
46. The applicant
further contended that the increased tax liability imposed an
excessive financial burden on him and could not be considered
proportionate for the purposes of Article 1 of Protocol No. 1.
47. The Government
admitted that those measures constituted an interference with the
applicant’s property rights. They maintained however that the
interference was lawful. In particular, the Instruction had been
validly adopted and was foreseeable in its application. In their
opinion the Instruction could be viewed as “law” for the purpose
of the Convention. Moreover, the application of progressive taxation
to all types of the applicant’s income was supported by the
Presidential Decree and the Income Tax Decree.
48. The Government
further submitted that those measures were compatible with the
proportionality requirement provided by Article 1 of Protocol
No. 1 and did not impose an excessive burden on the applicant.
2. The Court’s
assessment
49. It is not in dispute
between the parties that the increase of the applicant’s tax
liability by the authorities constituted an interference with his
property rights within the meaning of Article 1 of Protocol No. 1.
The Court is accordingly called upon to determine whether this
interference was justified in accordance with the requirements of
that provision.
50. The first and most
important requirement of Article 1 of Protocol No. 1 is that any
interference by a public authority with the peaceful enjoyment of
possessions should be lawful: the second sentence of the first
paragraph authorises a deprivation of possessions only “subject to
the conditions provided for by law” and the second paragraph
recognises that the States have the right to control the use of
property by enforcing “laws”. Moreover, the rule of law, one of
the fundamental principles of a democratic society, is inherent in
all the Articles of the Convention. It follows that the issue of
whether a fair balance has been struck between the demands of the
general interest of the community and the requirements of the
protection of the individual’s fundamental rights becomes relevant
only once it has been established that the interference in question
satisfied the requirement of lawfulness and was not arbitrary (see
Iatridis v. Greece [GC], no. 31107/96, § 58, ECHR 1999-II).
51. When speaking of
“law”, Article 1 of Protocol No. 1 alludes to the same concept to
be found elsewhere in the Convention (see Špaček s.r.o. v. the
Czech Republic, no. 26449/95, § 54, 9 November 1999). This
concept requires firstly that the measures should have a basis in
domestic law. It also refers to the quality of the law in question,
requiring that it be accessible to the persons concerned, precise and
foreseeable in its application (see Beyeler v. Italy [GC], no.
33202/96, § 109, ECHR 2000-I).
52. The Court admits
that it is primarily for the national authorities to interpret and
apply domestic law. However, the Court is required to verify whether
the way in which the domestic law is interpreted and applied produces
consequences that are consistent with the principles of the
Convention, as interpreted in the light of the Court’s case-law
(see Scordino v. Italy (no. 1) [GC], no. 36813/97, §§
190 and 191, ECHR 2006-V).
53. Turning to the
present case, the Court notes that the Income Tax Decree, which had
the legal force of the law of Parliament, explicitly established a
20% fixed tax rate for income earned outside a principal place of
business. Nevertheless, the tax authorities and the courts ignored
that rule and applied a progressive tax rate with respect to that
type of income, thereby increasing the applicant’s overall income
tax liability. They relied on the Instruction of the Principal Tax
Inspectorate as authority to do so. Subsequently, they also relied on
the Income Tax Decree and the Presidential Decree.
54. As long as the
domestic courts relied on the Income Tax Decree to justify the
increase in the applicant’s income tax liability, the Court fails
to comprehend the reasons on which the existence of Article 7 § 3 of
that legal act was disregarded. The domestic courts were silent on
this issue despite the fact that the applicant raised it in each set
of the domestic proceedings. Reference by the courts to the
Instruction is not helpful since, by virtue of Article 23 of the
Income Tax Decree, the Instruction could deal only with issues of the
application of the Income Tax Decree and could not establish any
rules conflicting with that legal act.
55. The Court further
notes that the domestic courts also relied on the Presidential Decree
which introduced a new table of progressive taxation and was stated
to cover any income earned by a citizen. However, none of the
paragraphs of Article 7 of the Income Tax Decree had been set aside.
The question remained therefore how those legal acts correlated with
each other. In this regard the Court notes that the Income Tax Decree
had a legal force of the law of Parliament and provided special rules
for the taxation of specific types of citizens’ income. It is
remarkable that, in contrast to the rates fixed in the Presidential
Decree, the tax authorities continued to apply, for example, the
special rule of Article 7 § 2 of the Income Tax Decree (see
paragraph 40 above). In these circumstances it is unclear why the
Presidential Decree had to be understood as prevailing over Article 7
§ 3 of the Income Tax Decree.
56. Even assuming that
the interpretation by the domestic authorities was plausible, the
Court is not satisfied with the overall state of domestic law,
existing at the relevant time, on the matter in question. It notes
that the relevant legal acts had been manifestly inconsistent with
each other. As a result, the domestic authorities applied, on their
own discretion, the opposite approaches as to the correlation of
those legal acts. In the Court’s opinion the lack of the required
clarity and precision of the domestic law, offering divergent
interpretations on such an important fiscal issue, upset the
requirement of the “quality of law” under the Convention and did
not provide adequate protection against arbitrary interference by the
public authorities with the applicant’s property rights.
57. In this regard the
Court cannot overlook the requirement of section 4.4.1 of the
Law “On the procedure for payment of taxpayers’ liabilities to
budgets and state purpose funds” of 21 December 2000 which provided
that if domestic legislation offered ambiguous or multiple
interpretations of the rights and obligations of the taxpayers the
domestic authorities were obliged to take the approach which was more
favourable to the taxpayer. However, in the present case the
authorities opted for the less favourable interpretation of the
domestic law which resulted in the increase in the applicant’s
income tax liability.
58. The
foregoing considerations are sufficient to enable the Court to
conclude that the interference with the applicant’s property rights
was not lawful for the purpose of Article 1 of Protocol No. 1. It
holds for this reason that there has been a violation of that
provision.
III. OTHER ALLEGED
VIOLATIONS OF THE CONVENTION
59. The applicant
complained under Article 6 of the Convention that the proceedings in
his case had been unfair.
60. Having considered
the applicant’s submissions in the light of all the material in its
possession, the Court finds that, in so far as the matters complained
of are within its competence (see
Ferrazzini v. Italy
[GC], no. 44759/98,
§§ 29-31, ECHR 2001-VII), they do not disclose any
appearance of a violation of the rights and freedoms set out in the
Convention.
61. It follows that this
part of the application must be declared inadmissible pursuant to
Article 35 §§ 3 and 4 of the Convention.
IV. APPLICATION OF
ARTICLE 41 OF THE CONVENTION
62. Article
41 of the Convention provides:
“If the
Court finds that there has been a violation of the Convention or the
Protocols thereto, and if the internal law of the High Contracting
Party concerned allows only partial reparation to be made, the Court
shall, if necessary, afford just satisfaction to the injured party.”
A. Damage
63. The applicant
claimed 20,000 euros (EUR) in respect of non-pecuniary damage.
64. The Government
considered that this claim was unsubstantiated.
65. The Court considers that the applicant suffered
non-pecuniary damage which cannot be compensated by the mere finding
of a violation of his Convention right. Making its assessment on an
equitable basis, the Court awards the applicant the sum of EUR 1,200
in respect of non-pecuniary damage.
B. Costs and expenses
66. The applicant also
claimed UAH 80,000 or EUR 8,000 for the costs and expenses incurred
before the Court.
67. The Government
contested those amounts.
68. According to the
Court’s case-law, an applicant is entitled to the reimbursement of
costs and expenses only in so far as it has been shown that these
have been actually and necessarily incurred and are reasonable as to
quantum. In the present case, regard being had to the information in
its possession, the Court awards EUR 1,500 in respect of costs and
expenses.
C. Default interest
69. The Court considers
it appropriate that the default interest should be based on the
marginal lending rate of the European Central Bank, to which should
be added three percentage points.
FOR THESE
REASONS, THE COURT UNANIMOUSLY:
1. Decides
to join the applications;
2. Declares
the complaint under Article 1 of Protocol No. 1 admissible and the
remainder of the applications inadmissible;
3. Holds
that there has been a violation of Article 1 of Protocol No. 1;
4. Holds
(a) that
the respondent State is to pay the applicant, within three months of
the date on which the judgment becomes final in accordance with
Article 44 § 2 of the Convention, EUR 1,200 (one thousand
two hundred euros) in respect of non-pecuniary damage and EUR 1,500
(one thousand and five hundred euros) in respect of costs and
expenses, plus any tax that may be chargeable to the applicant, to be
converted into the national currency of the respondent State at the
rate applicable on the date of settlement;
(b) that
from the expiry of the above-mentioned three months until settlement
simple interest shall be payable on the above amount at a rate equal
to the marginal lending rate of the European Central Bank during the
default period plus three percentage points;
5. Dismisses the
remainder of the applicant’s claim for just satisfaction.
Done in English, and notified in
writing on 14 October 2010, pursuant to Rule 77 §§ 2 and 3 of the
Rules of Court.
Claudia Westerdiek Peer
Lorenzen
Registrar President
SHCHOKIN v. UKRAINE JUDGMENT
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