Information Note on the Court’s case-law No. 84
March 2006
Eko-Elda AVEE v. Greece - 10162/02
Judgment 9.3.2006 [Section I]
Article 1 of Protocol No. 1
Article 1 para. 1 of Protocol No. 1
Peaceful enjoyment of possessions
Refusal by tax authorities to pay the applicant company interest for late payment in respect of reimbursement of monies unduly paid by the latter in tax: violation
Facts: In 1987 the applicant, a joint stock company, made a payment on account to the tax authorities in respect of income tax due for the 1987 financial year. In return, the authorities paid the applicant a tax credit equivalent to 10% of the amount in question for having paid the full amount as a lump sum. The applicant company subsequently declared a substantial fall in income for the 1987 tax year, meaning that the tax authorities were obliged to repay the excess amount paid on account. In December 1991, as the authorities had not repaid the money, the applicant brought proceedings against the State before the administrative courts. On 12 November 1993, before the scheduled hearing in the case, the authorities repaid the excess amount. However, the administrative courts, taking the view that the applicable domestic law did not require the State to pay interest in cases where tax had been wrongly paid, rejected the applicant’s claim for statutory interest to compensate for the delay in repayment.
Law: Article 1 of Protocol No. 1 – Under domestic law, the State was required to repay any tax recognised by means of a final judicial decision to have been wrongly paid. In the instant case the authorities had repaid the amount wrongly paid five years after the request for repayment, thereby acknowledging that they owed the sum in question to the applicant company. The latter had therefore undeniably had a proprietary interest amounting to a “possession” for the purposes of Article 1 of Protocol No. 1. Accordingly, it remained to be determined whether the State’s refusal to pay interest to the applicant to compensate for the delay in payment was compatible with that provision. In that connection the Court’s case-law consistently linked the payment of default interest to delays in the repayment of credits by the authorities. With particular reference to the payment of taxes, the financial obligations arising out of the levying of tax or contributions could infringe the rights guaranteed in Article 1 of Protocol No. 1 if the conditions of repayment placed an excessive burden on the person concerned or fundamentally threatened his or her financial security. In the present case the tax wrongly paid had been repaid five years and five months after the claim for repayment had been lodged by the applicant. Accordingly, the refusal of the tax authorities to pay interest in respect of such a long period had upset the fair balance to be maintained between the general interest and the interests of the applicant company.
Conclusion: violation.
The Court awarded the applicant company specified sums for pecuniary damage and costs and expenses. It considered that the finding of a violation constituted in itself sufficient just satisfaction for non-pecuniary damage.
© Council of Europe/European Court of Human Rights
This summary by the Registry does not bind the Court.
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