AS TO THE ADMISSIBILITY OF
Applications Nos. 37416/97, 37418/97, 37434/97
by Kappa Kanzlei und Bürobetriebs GmbH and others
against Austria
Applications Nos. 37829/97 - 37834/97, 37836/97,
37837/97, 37839/97 - 37841/97
by Viva Reiseveranstaltungs GmbH and others
against Austria
The European Commission of Human Rights (First Chamber) sitting
in private on 27 May 1998, the following members being present:
MM M.P. PELLONPÄÄ, President
N. BRATZA
E. BUSUTTIL
A. WEITZEL
C.L. ROZAKIS
Mrs J. LIDDY
MM L. LOUCAIDES
B. CONFORTI
I. BÉKÉS
G. RESS
A. PERENIC
C. BÎRSAN
K. HERNDL
M. VILA AMIGÓ
Mrs M. HION
Mr R. NICOLINI
Mrs M.F. BUQUICCHIO, Secretary to the Chamber
Having regard to Article 25 of the Convention for the Protection
of Human Rights and Fundamental Freedoms;
Having regard to the applications introduced on 23 July 1997 and
11 July 1997 respectively by Kappa Kanzlei und Bürobetriebs GmbH and
Others and Viva Reiseveranstaltungs GmbH and Others against Austria and
registered on 20 and 22 August 1997 and 19 September 1997 respectively
under file Nos. 37416/97, 37418/97, 37434/97, 37829/97 - 37834/97,
37836/97, 37837/97, 37839/97 - 37841/97;
Having regard to the report provided for in Rule 47 of the Rules
of Procedure of the Commission;
Having deliberated;
Decides as follows:
THE FACTS
The applicants are all limited companies (Gesellschaften mit
beschränkter Haftung) registered under Austrian law. The names and
places of business of the applicant companies are set out in the annex
to this decision. The applicant companies in Applications
Nos. 37416/97, 37418/97 and 37434/97 are represented by F. W. Rainer,
a lawyer practising on Vienna. The applicant companies in Applications
Nos. 37829/97, 37830/97, 37831/97, 37832/97, 37833/97, 37834/97,
37836/97, 37837/97, 37839/97, 37840/97 and 37841/97 are represented by
Mr F. Podovsovnik, a lawyer practising in Vienna.
The facts of the case as submitted by the applicants may be
summarised as follows.
A. Particular circumstances of the case
On 30 April 1996 the Federal Act on the Restructuring of Economy
(Strukturanpassungsgesetz, Federal Law Gazette No. 201/1996) was
enacted by which the Corporation Tax Act (Körperschaftssteuergesetz)
was amended. The legislature, inter alia, raised the minimum
corporation tax (to be paid irrespective of whether benefits had been
earned), as provided for in Section 24 para. 4 of the Corporation Tax
Act, from ATS 15.000 per year to ATS 50.000 per year.
Based on this amendment the Tax Offices issued tax orders against
the applicant companies ordering them to pay advances for their
corporation tax liability for 1996 corresponding to the minimum
corporation tax as specified in the 1996 version of Section 24 para. 4
of the Corporation Tax Act.
The applicant companies appealed against the tax orders claiming
that they were based on an unconstitutional Act. The appeals were
dismissed by the Regional Tax Authorities (Finanzlandesdirektionen).
Thereupon, the applicant companies, and some further 11.000
limited companies, introduced complaints with the Constitutional Court
(Verfassungsgerichtshof), complaining that the 1996 amendment of the
Corporation Tax Act was unconstitutional.
The Constitutional Court took up four of these complaints (not
those lodged by the applicant companies) and on 27 November 1996
introduced ex-officio proceedings for the review of the
constitutionality of Section 24 para. 4 of the Corporation Tax Act, as
amended in 1996. In these ex-officio proceedings the Constitutional
Court, on 23 January 1997, held an oral hearing.
On 24 January 1997 the Constitutional Court found Section 24
para. 4 of the Corporation Tax Act as amended to be unconstitutional
and ordered that the previous version of this provision enter into
force again. Pursuant to Article 140 para. 7 of the Federal
Constitution the Constitutional Court further ordered that the 1996
version of Section 24 para. 4 should not only be inapplicable in the
four cases which it had taken up (Anlaßfälle) but that its
inapplicability should be extended to all cases in which a final
decision on the minimum corporation tax liability for 1996 had been
taken on the basis of the 1996 version of Section 24 para. 4 (this
included all the 11.000 cases pending before it). The Constitutional
Court declared that all cases concerning minimum corporation tax
pending before it were terminated without a formal decision being taken
on each individual claim raised (including claims for reimbursement of
procedural costs).
On the same day the Constitutional Court, by separate decisions,
quashed the tax orders in the four cases it had taken up and awarded
procedural costs. It appears, however, that the lawyer representing
these companies had participated in the hearing of 23 January 1997.
On 24 January 1997 the Constitutional Court also issued a press
release in which it gave a brief summary of the decision taken and its
reasons, explaining, inter alia, why it had extended the effect of the
annulment to all decisions on minimum corporation tax already taken by
the tax authorities. The Constitutional Court stated that it had felt
obliged to make extensive use of the powers conferred on it by
Section 140 para. 7 of the Federal Constitution (i.e. the power to
extend the effect of the annulment of a provision of law beyond the
case in issue) because a formal decision in all of the 11.000 cases
would have taken years and would have hindered the Constitutional Court
in dealing with other pending cases for many months. This specific
interest in protection by the law (Rechtsschutzinteresse) had to
prevail therefore over the interest that each of the 11.000 pending
applications be individually dealt with (including any claims for award
of procedural costs).
On 30 January 1997 the Federal Chancellor (Bundeskanzler)
published the operative part of the Constitutional Court's decision of
24 January 1997 in the Federal Law Gazette (Nr. 18/1997).
The effect of the Constitutional Court's decision and its
publication in the Federal Gazette was that in all cases in which
minimum corporation tax had been collected this sum had to be
reimbursed by the tax authorities or set off against other tax claims.
B. Relevant domestic law
1. Article 140 para. 7 of the Federal Constitution (Bundes-
Verfassungsgesetz) reads as follows:
"Ist ein Gesetz wegen Verfassungswidrigkeit aufgehoben worden
oder hat der Verfassungsgerichtshof gemäß Abs 4 ausgesprochen, daß ein
Gesetz verfassungswidrig war, so sind alle Gerichte und
Verwaltungsbehörden an den Spruch des Verfassungsgerichtshofes
gebunden. Auf die vor der Aufhebung verwirklichten Tatbestände mit
Ausnahme des Anlaßfalles ist jedoch das Gesetz weiterhin anzuwenden,
sofern der Verfassungsgerichtshof nicht in seinem aufhebenden
Erkenntnis anderes ausspricht. Hat der Verfassungsgerichtshof in
seinem aufhebenden Erkenntnis eine Frist gemäß Abs. 5 gesetzt, so ist
das Gesetz auf alle bis zum Ablauf dieser Frist verwirklichten
Tatbestände mit Ausnahme des Anlaßfalles anzuwenden."
"If an Act has been repealed on the basis that it is unconstitutional or if the Constitutional Court has held under paragraph 4 that an Act is unconstitutional, its decision shall be binding on all courts and administrative authorities. Except in relation to the case before the Court, repeal of an Act shall not have retrospective effect, unless specifically so provided in the judgment. If in its repeal decision the Court has set a time-limit under paragraph 5 [for a maximum of one year], the Act shall remain applicable to facts occurring until the expiry of the time-limit, except for facts related to the case before the Court." 2. Section 88 of the Constitutional Court Act (Verfassungs- gerichtshofgesetz), insofar as relevant, reads as follows: "Der Partei, die unterliegt ..., kann auf Antrag der Ersatz der Prozeßkosten auferlegt werden. ..." "A party which loses its case ..., may, upon request, be ordered to reimburse the procedural costs incurred by the other party. ..." 3. Section 24 para. 4 of the Corporation Tax Act, as amended by Federal Law of 30 April 1996 (Federal Law Gazette 201/1996), reads as follows: "Unbeschränkt steuerpflichtige Kapitalgesellschaften ... haben für jedes volle Kalendervierteljahr des Bestehens der unbeschränkte Steuerpflicht eine Mindeststeuer von 12 500 S zu entrichten. Die Mindeststeuer ist in dem Umfang, in dem sie die tatsächliche Körperschaftsteuerschuld übersteigt, wie eine Vorauszahlung im Sinne des § 45 Einkommensteuergesetzes 1988 im Ausmaß einer im Veranlagungsjahr oder in den folgenden Veranlagungszeiträumen enstehenden tatsächlichen Körperschaftsteuerschuld insoweit anzurechnen, als die tatsächliche Körperschaftsteuerschuld den sich nach dem ersten Satz für diesen Veranlagungszeitraum ergebenden Betrag übersteigt." "Registered companies which are subject to unlimited tax liability shall pay for every full quarterly period of unlimited tax liability a minimum tax of ATS 12 500. ... The minimum tax is regarded as a tax advance within the meaning of S. 45 of the Income Tax Act 1988, to the extent that it exceeds corporation tax liability actually due for the year. The exceeding amount may be carried forward and counted towards corporation tax liability in the following years, provided that in these years the actual corporation tax liability is higher than the minimum tax." COMPLAINTS The applicant companies complain that the Constitutional Court has not given a formal decision on their complaints. In particular the Constitutional Court has failed to award them procedural costs although they "won" their cases since the Constitutional Court quashed Section 24 para. 4 of the Corporation Tax Act as unconstitutional. They submit that the Constitutional Court therefore violated their right of access to a court as guaranteed by Article 6 para. 1 of the Convention and infringed their right to property as guaranteed by Article 1 of Protocol No. 1. Furthermore, the applicant companies, relying on Article 14 of the Convention, complain that the Constitutional Court discriminated against them in that it awarded costs to the applicant companies in the four cases which it had taken up for decision while it did not award costs in their cases. Lastly the applicant companies also invoke Article 13 of the Convention. THE LAW 1. The Commission, having regard to the similar nature of the issues raised, considers it appropriate to order the joinder of the present applications under Rule 35 of its Rules of Procedure. 2. The applicant companies complain that the Constitutional Court violated their right of access to a court as guaranteed by Article 6 para. 1 (Art. 6-1) of the Convention in that it failed to hand down a formal decision on their complaints and, in particular, to award them procedural costs. Article 6 para. 1 (Art. 6-1) of the Convention, insofar as relevant to the present case, reads as follows: "In the determination of his civil rights and obligations ... everyone is entitled to a fair and public hearing ... by an independent and impartial tribunal established by law." The Commission recalls that in the Robins case the Court has found that a decision of a court concerning procedural costs also involves the determination of civil rights and obligations within the meaning of Article 6 para. 1 (Art. 6-1) of the Convention, provided that the underlying litigation also concerns the determination of civil rights and obligations within the meaning of the same provision (Eur. Court HR, Robins v. the United Kingdom judgment of 1 September 1997, Reports 1997-V no. 49 para. 29). In the present case the subject matter of the proceedings which the applicant companies brought before the Constitutional Court was the constitutionality of provisions of the Corporation Tax Act which imposed on the applicant companies an increased minimum tax liability. The Constitutional Court determined this question without, however, giving formal decisions because as a consequence of its decision of 24 January 1997 the applicant companies were no longer subject to that increased liability and were entitled to claim back tax advances already paid. The claim for procedural costs raised by the applicant companies - and no other claim could be of relevance any longer - thus related to tax assessment proceedings. However, according to the Commission's case-law Article 6 para. 1 (Art. 6-1) of the Convention does not apply to disputes concerning the assessment of taxes and of other contributions (No. 8531/79, Dec. 10.3.81, D.R. 23, p. 203; No. 9908/82, Dec. 4.5.83, D.R. 32, p. 266). Accordingly, Article 6 para. 1 (Art. 6-1) of the Convention is not applicable to the proceedings at issue. It follows that this part of the application must be rejected as incompatible ratione materiae with the provisions of the Convention in accordance with Article 27 para. 2 (Art. 27-2) of the Convention. 3. The applicant companies further complain that the Constitutional Court's failure to formally decide their cases and to award, in this context, procedural costs infringed their right to property as guaranteed by Article 1 of Protocol No. 1 (P1-1). Article 1 of Protocol No. 1 (P1-1) 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." The Commission recalls that Article 1 of Protocol No. 1 (P1-1) guarantees the right of property. It aims at securing the peaceful enjoyment of existing possessions. A future income constitutes a "possession" only if it has been earned or where an enforceable claim exists (see Eur. Court HR, Marckx v. Belgium judgment of 13 June 1979, Series A no. 31, p. 23, para. 50; van der Mussele v. Belgium judgment 23 November 1983, Series A no. 70, p. 23, para. 48; No. 10438/83, Dec. 3.10.84, D.R. 41, p. 226; No. 11628/85, Dec. 9.5.86, D.R. 47, p. 270). The applicant companies' claim for reimbursement of procedural costs, which may arise once proceedings are terminated successfully has not become an enforceable one because no proceedings at all were instituted on the applicants' complaint. However, these complaints have produced a positive result for the applicant companies, even in the absence of a formal decision by the Constitutional Court, because, as a result of the Constitutional Court's decision of 24 January 1997, they received back the (increased) minimum corporation tax paid by them. In this respect the Commission also observes that the applicant companies have not substantiated that they suffered prejudice by actually incurring expenses vis-á-vis their lawyers who represented them. The Commission therefore finds that there is nothing to suggest that the applicants' right to peaceful enjoyment of possession has in any way been affected by the Constitutional Court's failure to open proceedings on their complaints. Accordingly the applicants' complaint fall outside the scope of Article 1 of Protocol No. 1 (P1-1) and also this part of the application must therefore be rejected as incompatible ratione materiae with the provisions of the Convention in accordance with Article 27 para. 2 (Art. 27-2) of the Convention. 4. The applicant companies, relying on Article 14 (Art. 14) of the Convention, complain that the Constitutional Court discriminated against them in that it awarded costs to the complainant companies in the cases which it had taken up for decision while it did not award any costs in their cases. Article 14 (Art. 14) of the Convention reads as follows: "The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status." The Commission recalls that Article 14 (Art. 14) complements the other substantive provisions of the Convention and the Protocols. It has no independent existence since it has effect solely in relation to "the enjoyment of the rights and freedoms" safeguarded by those provisions. Although the application of Article 14 (Art. 14) does not presuppose a breach of those provisions - and to this extent it is autonomous - there can be no room for its application unless the facts at issue fall within the ambit of one or more of the latter (Eur. Court HR, Marckx v. Belgium judgment, loc. cit.; Karlheinz Schmidt v. Germany judgment of 18 July 1994, p. 32, para. 22). The Commission, having found that Article 6 (Art. 6) of the Convention and Article 1 of Protocol No. 1 (P1-1) prove to be inapplicable to the applicant companies' claim for reimbursement of costs, finds that Article 14 (Art. 14) of the Convention cannot be combined with them on the point now being considered. Accordingly, Article 14 (Art. 14) of the Convention does not apply to the present case. It follows that also this part of the application must be rejected as incompatible ratione materiae with the provisions of the Convention in accordance with Article 27 para. 2 (Art. 27-2) of the Convention. 5. Lastly the applicant companies complain under Article 13 (Art. 13) of the Convention that they had no effective remedy at their disposal to complain about the Constitutional Court's failure to award procedural costs in each of their cases. However the Commission has found above that the applicant companies' complaints under Article 6 para. 1 (Art. 6-1), Article 1 of Protocol No. 1 (P1-1) and Article 1 of Protocol No. 1 in conjunction with Article 14 (P1-1+14) of the Convention are inadmissible as the provisions of the Convention and of Protocol No. 1 relied on do not apply. In these circumstances the Commission cannot find that the applicant companies have made out an arguable claim of a violation of these provisions with respect to Article 13 (Art. 13) of the Convention (cf. Eur. Court HR, Powell and Rayner v. the United Kingdom judgment of 21 February 1990, Series A no. 172, p. 14, para. 31). It follows that this part of the application is manifestly ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the Convention. For these reasons, the Commission DECIDES TO JOIN APPLICATIONS Nos. 37416/87, 37418/87, 37434/87, 37829/87, 37830/87, 37831/87, 37832/87, 37833/87, 37834/87, 37836/87, 37837/87, 37839/87, 37840/87 and 37841/97; by a majority, DECLARES THE APPLICATIONS INADMISSIBLE. M.F. BUQUICCHIO M.P. PELLONPÄÄ Secretary President to the First Chamber of the First Chamber
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