FOURTH SECTION
DECISION
Application no. 25264/14
Klára Anna FODORNÉ TÓTH
against Hungary
The European Court of Human Rights (Fourth Section), sitting on 9 October 2018 as a Committee composed of:
Paulo Pinto de Albuquerque, President,
Egidijus Kūris,
Iulia Antoanella Motoc, judges,
and Andrea Tamietti, Deputy Section Registrar,
Having regard to the above application lodged on 19 March 2014,
Having regard to the observations submitted by the respondent Government and the observations in reply submitted by the applicant,
Having deliberated, decides as follows:
THE FACTS
1. The applicant, Ms Klára Anna Fodorné Tóth, is a Hungarian national, who was born in 1972 and lives in Szigetszentmiklós.
2. The Hungarian Government (“the Government”) were represented by Mr Z. Tallódi, Agent, Ministry of Justice.
3. The facts of the case, as submitted by the parties, may be summarised as follows.
4. The applicant was employed as a civil servant at the National Treasury. Her service was terminated as of 28 September 2013. Part of her severance payment was taxed at 98% rate in the amount of HUF 2,027,987 (approximately EUR 6,700).
5. Due to subsequent amendments of the relevant legislation, the tax rates applicable to the applicant’s severance payment changed retroactively. Accordingly, the National Tax Authority found that the relevant part of the applicant’s severance payment should have been subject to a flat-rate public charge of 25% in the amount of HUF 517,344 (approximately EUR 1,700). Therefore, the applicant was reimbursed HUF 1,510,643 (approximately EUR 5,000) by the National Tax Authority. The resultant overall tax burden was thus 25%.
COMPLAINT
6. The applicant complained that the imposition of 98% tax on part of her remuneration due on termination of her employment had amounted to a deprivation of property in breach of Article 1 of Protocol No. 1 to the Convention.
THE LAW
7. The applicant complained about the levying of the special tax on part of her severance payment. She relied on Article 1 of Protocol No. 1, which provides 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.”
8. The Government contested that argument. They argued that following the introduction of the flat-rate public charge and the subsequent reimbursement (see paragraph 5 above), the criteria for finding a violation of Article 1 of Protocol No. 1 were not met in the applicant’s case. The Government further requested the Court to declare the application inadmissible for abuse of the right of application because the applicant failed to inform the Court of the change of the tax regime and the resultant reimbursement.
9. The Court considers that it is not necessary to examine the Government’s argument on abuse of the right of individual petition, the present application being in any event inadmissible for the following reasons.
10. The Court recalls that in the area of social and economic legislation including in the area of taxation as a means of such policies States enjoy a wide margin of appreciation, which in the interests of social justice and economic well-being may legitimately lead them, in the Court’s view, to adjust, cap or even reduce the amount of severance normally payable to the qualifying population. However, any such measures must be implemented in a non-discriminatory manner and comply with the requirements of proportionality (see N.K.M. v. Hungary, no. 66529/11, § 65, 14 May 2013).
11. In the present case, when considering the proportionality between the means employed and the aim sought, it is to be noted that after the applicant had been reimbursed, the overall tax burden imposed on her was 25%, which cannot be considered disproportionate (see, a contrario, N.K.M. v. Hungary, cited above, §§ 66-76; see also, M.A. v. Hungary (dec.), no. 36642/14, § 34, 28 November 2017). The interference did not, therefore, impose an excessive individual burden on the applicant.
12. It follows that the application is manifestly ill-founded and must be rejected in accordance with Article 35 §§ 3 (a) and 4 of the Convention.
For these reasons, the Court, unanimously,
Declares the application inadmissible.
Done in English and notified in writing on 8 November 2018.
Andrea TamiettiPaulo Pinto de Albuquerque
Deputy RegistrarPresident
Full & Egal Universal Law Academy