AS TO THE ADMISSIBILITY OF
Application No. 20471/92
by KUSTANNUS OY VAPAA AJATTELIJA AB,
VAPAA-AJATTELIJAIN LIITTO - FRITÄNKARNAS
FÖRBUND r.y. and Kimmo SUNDSTRÖM
against Finland
The European Commission of Human Rights sitting in private on
15 April 1996, the following members being present:
MM. S. TRECHSEL, President
H. DANELIUS
C.L. ROZAKIS
A.S. GÖZÜBÜYÜK
J.-C. SOYER
Mrs. G.H. THUNE
MM. J.-C. GEUS
M.P. PELLONPÄÄ
M.A. NOWICKI
I. CABRAL BARRETO
B. CONFORTI
N. BRATZA
I. BÉKÉS
J. MUCHA
E. KONSTANTINOV
D. SVÁBY
A. PERENIC
C. BÎRSAN
K. HERNDL
Mr. H.C. KRÜGER, Secretary to the Commission
Having regard to Article 25 of the Convention for the Protection
of Human Rights and Fundamental Freedoms;
Having regard to the application introduced on 14 June 1992 by
KUSTANNUS OY VAPAA AJATTELIJA AB, VAPAA-AJATTELIJAIN LIITTO -
FRITÄNKARNAS FÖRBUND r.y. and Kimmo SUNDSTRÖM against Finland and
registered on 11 August 1992 under file No. 20471/92;
Having regard to the reports provided for in Rule 47 of the Rules
of Procedure of the Commission;
Having regard to the observations submitted by the respondent
Government on 17 March and 25 June 1995 as well as 15 February 1996 and
the observations in reply submitted by the applicant on 15 May 1995;
Having regard to the parties' oral submissions at the hearing on
15 April 1996;
Having deliberated;
Decides as follows:
THE FACTS
The first applicant (in English "Publishing Company Freethinker
Ltd.") is a limited liability company registered in Helsinki. The
second applicant ("The Freethinkers' Association") is the registered
umbrella association for the Finnish freethinkers. The third applicant
is a Finnish citizen, born in 1957 and resident in Helsinki. He is the
manager of the applicant company as well as a member of one of the
branches of the applicant association. All applicants are represented
by Mr. Martin Scheinin, a law professor at the University of Helsinki.
A. Particular circumstances of the case
The facts of the case, as submitted by the parties, may be
summarised as follows.
The applicant company is owned by the applicant association and
its local branches. The applicant association is its majority
shareholder. According to the applicants, the company was founded in
1982 with the primary aim of publishing and selling books reflecting
and promoting the aims of the freethinkers' movement. It was seen as
useful and practical to transfer the commercial activities of the
association to the company, although this arrangement did not affect
the respective tax burden of the two.
According to the company's statutes, its activities consist of:
"... the publishing of books, magazines, audiovisual
products, audio records and tapes as well as the importing,
exporting and selling of the above-mentioned products..."
(article 2; translation from Finnish).
The company statutes include a clause affording the applicant
association and its member associations a right to redeem at their
nominal price any shares sold to a non-shareholder.
According to the applicant association's statutes, it functions
as:
"... the contact link between - and umbrella organisation
for - the registered associations of freethinkers, atheists
and humanists [and as] the defender of [their] interests,
legal rights and culture.
The aim of the association is to promote a scientific view
of the world as well as to further the activity of its
member associations in their work ... towards the
separation of the two State Churches from the State and the
abolition of their position in public law.
In order to achieve its aim the association ... carries out
publishing activities in its field.
..." (article 2; translation from Finnish).
Finland recognises two State Churches, the Evangelical-Lutheran
Church and the Orthodox Church of Finland. Approximately 86 per cent
of the population belong to the Evangelical-Lutheran Church and about
1 per cent belong to the Orthodox Church of Finland. A physical person
who is not a member of any of the two State Churches is registered in
the civil population register, since the State Churches administer
their own population registers. None of the applicants are members of
any of the State Churches.
On 19 October 1989 the applicant company was ordered to pay
church tax (kirkollisvero, kyrkoskatt) for the year of 1988 in the
amount of 14,80 FIM (approximately the same in FF). The applicant
company paid the tax, but nevertheless lodged a rectification request
with the Tax Board (verolautakunta, skattenämnden) of Helsinki.
On 10 May 1990 the Convention and, inter alia, Protocol No. 1 to
the Convention entered into force with regard to Finland. On
23 May 1990 the Convention was incorporated into Finnish law (Act
no. 439/90).
On 10 March 1991 the applicant company was ordered to pay church
tax for 1989 in the amount of 7,60 FIM. All applicants appealed to the
County Administrative Court (lääninoikeus, länsrätten) of Helsinki.
On 26 March 1991 the Tax Board rectified the church tax collected
from the company for 1988. However, considering the minor amount
collected and in pursuance of the 1978 Decree on Tax Collection
(veronkantoasetus, skatteuppbördsförordning 903/78), the tax was not
reimbursed. The representative of the City of Helsinki appealed against
the decision.
On 20 October 1992 the County Administrative Court found that the
applicant company was liable to pay the church tax for 1988. All
applicants appealed to the Supreme Administrative Court (korkein
hallinto-oikeus, högsta förvaltningsdomstolen).
On 4 January 1992 the applicant company was ordered to pay church
tax for 1990 in the amount of 5,04 FIM. All applicants appealed to the
County Administrative Court which, on 29 April 1993, considered that
the applicant association and Mr. Sundström lacked legal standing as
appellants. It furthermore found that the company was liable to pay
church tax for the years 1989-90. All applicants appealed to the
Supreme Administrative Court.
According to the 1992 Act on Income Tax (tuloverolaki, inkomst-
skattelag 1535/92) which entered into force on 1 January 1993, legal
persons and associations became liable to pay 25 per cent in tax on
their income (later increased to 28 per cent). 0,84 per cent of these
tax revenues were to be passed on to the Evangelical-Lutheran and the
Orthodox parishes (0,76 and 0,08 per cent respectively). Part of the
remaining revenues was to be retained by the State and a further part
was to be passed on to the relevant municipality (section 124,
subsections 2 and 5).
On 15 November 1994 the applicant company was ordered to pay
income tax in the total amount of 457 FIM for 1993. Due to the 1992 Act
the amount which was to be passed on to the parishes was no longer
specified in the tax assessment. However, in pursuance of that Act the
part to be received by the Church amounted to 15,36 FIM. The company
requested a rectification of the tax assessment, arguing that the part
of the income tax which was to be passed on to the Church should not
have been imposed. On 8 December 1994 the applicant association was
ordered to pay income tax in the total amount of 556 FIM for 1993. Out
of that sum the tax to be passed on to the parishes under the 1992 Act
amounted to 18,71 FIM.
In two decisions of 30 December 1994 the Supreme Administrative
Court considered that the applicant association and Mr. Sundström
lacked legal standing to appeal against the levying of church tax on
the applicant company for the years 1988-90. The Court considered that
the church tax did not directly affect the association's or
Mr. Sundström's own taxation nor had any of them been shown to be
responsible for its payment.
The Supreme Administrative Court furthermore rejected the
applicant company's appeals. It noted that the company was not a
religious community, nor had it been argued that it was a public
utility organisation. In the tax returns submitted by the company it
had referred to its commercial activities which consisted of the
publishing and printing of books. The Court recalled that the 1919
Constitution Act (Suomen Hallitusmuoto, Regeringsform för Finland
94/19) only protected physical persons' freedom of religion. Rendering
legal persons liable to pay church tax could not be considered as
violating that freedom. Moreover, the levying of church tax on the
applicant company neither directly nor indirectly restricted the right
under Article 18 para. 1 of the International Covenant on Civil and
Political Rights to freedom of thought, conscience and religion. In any
case, as regards the church tax levied for the years 1988-89, the
Supreme Administrative Court noted that the domestic legislation
incorporating the European Convention on Human Rights ("the
Convention") into Finnish law had entered into force only on
23 May 1990. Finally, in regard to the church tax levied for 1990, the
Supreme Administrative Court found that the freedom of thought,
conscience and religion guaranteed by Article 9 para. 1 of the
Convention had not been restricted.
On 4 January 1995 the applicant association lodged a
rectification request with the Tax Board, arguing that no taxes should
have been imposed for 1993. In the alternative, it argued that the part
of the income tax which was to be passed on to the Church should not
have been imposed. The association stated, inter alia, as follows:
(translation from Finnish)
"... The association ... is ... a public utility
organisation ... . The sales income [at issue; about 2.200
FIM from the sale of urns] directly serves the
philosophical goal of the association. In this connection
it should be mentioned that, for tax reasons, the
responsibility for the further, much larger sale of
literature, was previously transferred to an entirely
separate limited liability company [i.e. the applicant
company] ..."
On 24 January 1995 the Tax Board rejected the applicant company's
rectification request concerning that part of the tax imposed for 1993
which was to be passed on to the Church. On the point of principle, the
Board referred to the Supreme Administrative Court's decisions of
30 December 1994.
In a decision of 16 February 1995 the Tax Board maintained that
the association's sale of urns should be regarded as a commercial
activity subject to taxation, since it had not been shown in what
manner the activity had been carried out nor how it had promoted the
association's goals. Considering the minor character of the activity,
the Tax Board nevertheless exempted the association from paying any of
the taxes imposed for 1993. The overall amount of wrongly levied tax
was later reimbursed to the applicant association.
On 13 September 1995 the applicant company was ordered to pay
income tax in the amount of 209 FIM for 1994. Out of that sum the tax
to be passed on to the parishes under the 1992 Act amounted to
17,56 FIM.
On request the applicant association has been granted annual
State subsidies as from 1973. For instance, for the years 1988-90 and
1993-94 it received a total of 650.000 FIM.
B. Relevant domestic law and practice
According to the 1919 Constitution Act, the rights and
obligations of a Finnish citizen shall not depend on whether or not he
or she belongs to a certain religious community, if any (section 9, as
in force at the relevant time). According to the 1922 Act on Religious
Freedom (uskonnonvapauslaki, religionsfrihetslag 267/22), a person who
is not a member of either of the two State Churches shall not be
obliged to pay church tax (section 12).
According to the 1966 Act on the Official Buildings and Funds of
the Evangelical-Lutheran Parishes (laki evankelisluterilaisten
seurakuntien virkataloista ja rahastoista, lag om de evangelisk-
lutherska församlingarnas boställen och fonder 106/66) and the
interpretation thereof, all legal persons as well as other associations
(yhteisöt, samfund) liable to pay municipal taxes were to pay church
tax despite the fact that none of their members belonged to the
Evangelical-Lutheran Church. Only "persons" who were not members of an
Evangelical-Lutheran parish as well as other religious communities and
their parishes were exempted by law from paying tax to that Church
(section 13 and the Supreme Administrative Court's judgment no. 1970
II 501). With the entry into force of the 1992 Act on Income Tax the
1966 Act in practice lost its applicability.
The 1958 Taxation Act (verotuslaki, beskattningslag), as in force
at the material time, did not exclude the exemption of a tax imposed
on a person other than a physical one, provided, inter alia, that the
collection of the tax would, for a particular reason, be clearly
unreasonable (section 125, as amended by Act no. 608/82). In a judgment
of 1981 the Supreme Administrative Court held that also a person other
than a physical one could be exempted from paying church tax (no. 1981
II 123). On certain grounds the competent tax board could also rectify
a taxation (section 87 of the Taxation Act, as in force at the material
time).
According to the 1964 Church Act (kirkkolaki, kyrkolag 635/64),
a Church body could order that a person other than a physical one
should be exempted from church tax, provided that the exemption was
based on grounds applicable to exemption from State or municipal tax
(section 368, subsection 2, as amended by Act no. 1008/82). According
to the 1993 Church Act, the Church Council (kirkkoneuvosto, kyrko-
rådet) may exempt someone from church tax on the same grounds as those
on which that tax payer either has been or could be exempted from State
or municipal tax (section 3). The parishes' assets and income shall
only be used for the purpose of carrying out the duties of the parishes
(chapter 15, section 1).
According to the 1978 Decree on Tax Collection, a wrongly
collected tax amount which was smaller than 20 FIM could not be
reimbursed (section 9, subsection 2 and section 21, both as amended by
Decree no. 811/88). This amount was subsequently increased to 30 FIM
(Decree no. 224/93).
The 1989 Act on Associations (yhdistyslaki, föreningslag 503/89)
guarantees to anyone the freedom of association with others
for idealistic purposes provided these do not contravene law or morals
(section 1). The Act is, however, not applicable to an organisation
aiming at producing profit or any other direct economic benefit for its
members or if the purpose or the nature of its activities is mainly
economic (section 2).
COMPLAINTS
1. The applicants complain that the church tax levied on the
applicant company for the tax years 1988-1990 violated their right to
freedom of religion, having regard to the fact that none of them were
members of any of the State Churches at the relevant time. In their
submissions of 25 November 1994 the applicants also complain about the
levying of church tax on the applicant company for the tax year 1993.
Article 9 of the Convention is invoked.
In their submissions of 13 January 1995 the applicant association
and Mr. Sundström furthermore complained about the church tax levied
on the applicant association for 1993. This complaint was withdrawn on
15 May 1995.
In their submissions of 22 December 1995 the applicants also
complain about the levying of church tax on the applicant company for
1994.
2. The applicants furthermore complain that the court determination
of the applicant company's "civil rights" following its tax appeals
concerning the tax levied for the years 1988-90 was not concluded
"within a reasonable time". In particular, the proceedings concerning
the tax levied for 1988 were unduly prolonged due to the appeal lodged
by the representative of the City of Helsinki following the Helsinki
Tax Board's decision of 26 March 1991. Article 6 para. 1 of the
Convention is invoked.
3. Finally, the applicants complain that in view of the minor sums
at stake the church tax levied for the years 1988-90 could not have
been reimbursed to the applicant company even if the applicants'
appeals had been successful. In their submissions of 25 November 1994
the applicants extend this complaint to cover also the church tax
levied on the applicant company for 1993. Article 6 para. 1 of the
Convention is invoked.
In their submissions of 13 January 1995 the applicant association
and Mr. Sundström furthermore complained about the church tax levied
on the applicant association for 1993 which could not have been
reimbursed either. This complaint was withdrawn on 15 May 1995. In
their submissions of 22 December 1995 the applicants also extend this
complaint to cover the church tax levied on the applicant company for
1994.
PROCEEDINGS BEFORE THE COMMISSION
The application was introduced on 14 June 1992 and registered on
13 August 1992.
On 30 November 1994 the Commission (First Chamber) decided to
communicate the application in its then form to the respondent
Government, pursuant to Rule 48 para. 2 (b) of the Rules of Procedure.
On 17 January 1995 the Commission decided to communicate also the
further aspects of the application raised by the applicants on
13 January 1995.
The Government's written observations were submitted on
17 March 1995 after an extension of the time-limit fixed for that
purpose. The applicants replied on 15 May 1995. Additional observations
were submitted by the Government on 25 June 1995.
On 16 January 1996 the plenary Commission ordered the transfer
of the application to itself pursuant to Article 20 para. 4 of the
Convention. On 22 January 1996 it decided to communicate also the
further aspects of the application raised by the applicants on
22 December 1995. It furthermore decided to invite the parties to a
hearing on the admissibility and merits of the application.
The Government's additional observations were submitted on
15 February 1996. At the Commission's hearing which was held on
15 April 1996 the parties were represented as follows:
The Government
Mr. Holger Rotkirch Ambassador, Director General for Legal
Affairs, Ministry for Foreign Affairs,
Legal Department, Agent
Mr. Arto Kosonen Head of Unit, Ministry for Foreign
Affairs, Legal Department, Co-Agent
Mr. Timo Viherkenttä Director of Business Taxation,
Ministry of Finance, Tax Department,
Adviser
Mr. Matti Halttunen Director, National Church Board,
Adviser
The applicants
Mr. Martin Scheinin Dr. iuris, Professor of Law,
University of Helsinki
Ms. Johanna Ojala Lawyer, Adviser
THE LAW
1. The company's obligation to pay church taxes or other taxes
reserved for Church activities
The applicants complain under Article 9 (Art. 9) of the
Convention that the church tax levied on the applicant company for the
years 1988-90 and 1993-94 violated their right to freedom of religion,
having regard to the fact that none of them were members of any of the
State Churches at the relevant time.
Article 9 (Art. 9) of the Convention reads as follows:
"1. Everyone has the right to freedom of thought,
conscience and religion; this right includes freedom to
change his religion or belief and freedom, either alone or
in community with others and in public or in private, to
manifest his religion or belief, in worship, teaching,
practice and observance.
2. Freedom to manifest one's religion or beliefs shall be
subject only to such limitations as are prescribed by law
and are necessary in a democratic society in the interests
of public safety, for the protection of public order,
health or morals, or for the protection of the rights and
freedoms of others."
The Government first submit that none of the applicants can claim
to be a "victim" within the meaning of Article 25 para. 1 (Art. 25-1)
of the Convention of a violation of Article 9 (Art. 9) on account of
the tax levied on the applicant company. Admittedly, the applicant
association can be considered to have religious and philosophical
goals. However, the applicant company is neither a religious or
philosophical community nor a non-profitmaking body. For instance, in
its tax rectification request of 4 January 1995 the applicant
association admitted that the company aims at generating profit for its
shareholders. Moreover, in its decisions of 30 December 1994 the
Supreme Administrative Court found that the company was functioning on
a commercial basis. At any rate, the religious freedom as guaranteed
by Article 9 (Art. 9) is, as held by the Court, primarily a matter of
individual conscience (Eur. Court H.R., Kokkinakis v. Greece judgment
of 25 May 1993, Series A no. 260-A, p. 17, para. 31). In the
Government's view Article 9 (Art. 9) cannot therefore be invoked by a
company functioning on a commercial basis such as the present applicant
company.
The Government furthermore stress that the company statutes do
not limit its commercial activities to publishing, importing and
exporting material promoting the freethinkers' movement. Moreover, if
the company's commercial activities allegedly promoting the movement
were of secondary importance, as asserted by the applicants, these
activities could legally have been pursued by the applicant
association.
The Government add that none of the company's shareholders are
responsible for its tax debts or any other obligations. Finally, the
tax levied on the applicant company did not affect the taxation of the
applicant association or Mr. Sundström, since neither of them could be
held responsible for the payment of that tax. In the alternative,
the Government argue that the conditions for admissibility prescribed
by Article 26 (Art. 26) of the Convention have not been met in regard
to the church tax imposed for the tax years 1988-90. The applicants did
not request an exemption from that tax, although domestic practice
would seem to show that the nature of the company's activities could
have been of relevance to the assessment of whether to grant such an
exemption. The applicants thus failed to exhaust a domestic remedy
which could not be considered ineffective for the purposes of Article
26 (Art. 26).
Turning to Article 9 (Art. 9) of the Convention in isolation, the
Government argue that the complaint is incompatible ratione materiae
with the provisions of the Convention as far as relating to the income
tax levied on the applicant company for the years 1993-94. Following
the entry into force of the 1992 Income Tax Act the tax levied on legal
persons and associations was no longer earmarked for any specific
purpose. There was thus no direct link between the taxation of the
applicant company and the State's contributions to religious
communities and activities. The applicants could not derive from
Article 9 (Art. 9) any right to refuse to abide by neutral and general
tax laws.
In the final alternative, the Government submit that the
complaint as a whole is manifestly ill-founded, since there was no lack
of respect for the right of any of the applicants to freedom of
religion. The company's objections to paying the tax at issue cannot
be considered as an exercise of its religious freedom. The Government
furthermore recall that the Commission has not objected to a State
Church system as such (Darby v. Sweden, Comm. Report 9.5.89, para. 45,
Eur. Court H.R., Series A no. 187, pp. 17-18). In Finland various tax
revenues cover 75 per cent of the parishes' expenses. The parishes are
responsible for carrying out many tasks which benefit the Finnish
society as a whole, including persons who do not belong to a State
Church. They are, for instance, responsible for the burial of
practically every deceased (98 per cent). They maintain most
cemeteries, keep population registers and maintain historically
valuable buildings. Finally, in cooperation with volunteers the
parishes also provide welfare services to any needy person, including
non-members of a State Church.
In this connection the Government also recall that under
Article 1 of Protocol No. 1 (P1-1) the Contracting States are entitled
to enforce such laws as they deem necessary to control the use of
property to secure the payment of taxes. A wide margin of appreciation
is afforded to the States in this respect. It follows that the Finnish
State must be free to make use of tax income for purposes which the
applicants may object to. The fact that non-believers are also required
to participate in covering Church expenses is not uncommon in member
States of the Council of Europe. Finally, the Government stress that
the sums which the applicant company had to contribute to the Church
were insignificant. In any case, during the years of relevance to the
complaint the applicant association received 650.000 FIM in State
subsidies.
The applicants contend that they may all claim to be victims
within the meaning of Article 25 (Art. 25) of the Convention, since the
church tax levied on the applicant company violated their respective
right to freedom of religion within the meaning of Article 9 para. 1
(Art. 9-1). Finnish law does not require that a limited liability
company should be established and run for the purpose of making a
profit or that it should otherwise be of a commercial character. A
corporate body may therefore also serve religious or philosophical
purposes. Although the applicant company carries out certain modest
economic activities, it does not aim at producing profit but at having
the Church separated from the State. It was a form of organisation
chosen for practical reasons, its aim being to further the ideals of
the freethinkers by acting as an integral part of its Finnish movement.
The company's real aim is shown, in particular, by the fact that its
shares cannot be freely acquired by anyone outside the freethinkers'
movement and thus do not have any market value. As a result the shares
cannot become the object of commercial interests. The applicants stress
that the company neither was nor could have been established in order
to avoid church tax.
Whilst accepting that the rights under Article 9 (Art. 9) are in
principle of a personal nature, the applicants argue that these rights
can be effectively enjoyed only in community with others. Excluding the
applicant company from its entitlement to freedom of religion on
account of its corporate character would exclude the applicants from
protection afforded to them by Article 9 (Art. 9) merely because they
chose to transfer some of their activities to that company. This would
be an excessively formalistic approach.
The applicants add that the applicant association is undisputedly
working for certain philosophical goals. It also constitutes the
applicant company's majority shareholder and had a direct interest in
the outcome of the taxation proceedings concerning the company.
As regards Article 26 (Art. 26) of the Convention, the applicants
contend that they have exhausted the domestic remedies at their
disposal. There existed no absolute right to an exemption from the tax
imposed on the company and under no circumstances could an exemption
have been granted merely in respect of the church tax. The remedy
referred to by the Government was therefore not an effective one for
the purposes of Article 26 (Art. 26).
As regards Article 9 (Art. 9) of the Convention in isolation, all
applicants contend that their "negative freedom of religion" has been
violated on account of the church tax levied on the applicant company.
Although the non-believers in Finland largely outnumber the members of
the second State Church, only other religious denominations and their
parishes are exempted from paying church tax. Moreover, this tax is not
used for the benefit of non-members of a State Church. The tax revenues
are not earmarked for the purpose of funding the activities which the
Church claims it is carrying out as a matter of duty to society, for
instance maintaining the cemeteries and the population registration.
The tax is only a means of obtaining income to the Church. Even
assuming that the church tax compensated the Church for services
provided by it, legal persons and associations liable to pay such tax
do not make use of those services and cannot be members of the Church.
The applicants further contend that the Church does not carry out
functions which cannot otherwise be obtained. For instance, the
freethinkers' cemeteries accept any deceased person. None of these
cemeteries receive any State subsidies. In addition, the Church does
not need the church tax in order to maintain its own cemeteries. In no
parish can a non-member of the Church be buried at the same price as
a member thereof.
The applicants furthermore point out that on top of the church
tax revenues the Church also obtains State subsidies directly out of
the State's general tax fund. These subsidies go to religious work in
general and cover, for instance, the bishops' salaries and
administrative costs. Church schools and publications as well as the
upkeep and renovation of Church buildings are also being subsidised by
the State.
The applicants underline that it does not follow from the 1992
tax reform that all income tax revenues stay in the State's general tax
fund, since part of the tax must still be passed on to the Church.
According to the Church legislation, a parish must use its assets and
income exclusively in order to carry out its ecclesiastical duties.
Legal persons and associations liable to pay income tax are thus still
financing religious activities of the Church. How these revenues are
spent is outside the State's control.
Finally, the applicants point out that the State subsidies to the
applicant association have been granted on a discretionary basis. These
subsidies emanated from the State's general tax fund and cannot be
characterised as tax revenues collected for the purposes of supporting
the freethinkers' movement. They must therefore be distinguished from
the taxes levied on the applicant company which have directly served
the interests of the Church.
a) The church taxes imposed for 1988-89
The Commission recalls that in accordance with the generally
recognised rules of international law the Convention only governs, for
each Contracting Party, facts subsequent to its entry into force with
regard to that Party (see, e.g., No. 9453/81, Dec. 13.12.82, D.R. 31
pp. 204, 208). It entered into force with regard to Finland on
10 May 1990.
In the present case the tax assessment concerning, inter alia,
the church tax to be levied for the tax year 1988 was made already in
1989. It is true that the tax to be levied for the tax year 1989 was
assessed in 1991, i.e. after the entry into force and the incorporation
of the Convention. Both of these tax assessments were nevertheless
based on an interpretation of the relevant tax legislation as in force
in respect of those two tax years.
The Government have not objected to admissibility by arguing that
the Commission would lack competence ratione temporis to deal with the
present complaint. The Commission considers, however, that it must
decide the question concerning its competence of its own motion and
regardless of the parties' position. This is so at least in the present
case, where it has not been alleged that the taxation at issue created
a continuing situation connecting the period before the date of the
entry into force of the Convention with the period thereafter (cf. Eur.
Court H.R., Papamichalopoulos and Others v. Greece judgment of
24 June 1993, Series A no. 260-B, p. 69, para. 40).
The Commission has repeatedly held that, where the facts consist
of a series of legal proceedings, the date of entry into force of the
Convention in respect of the Contracting State in question has the
effect of dividing the period into two, the earlier part escaping the
Commission's jurisdiction ratione temporis, whereas a complaint
relating to the later part cannot be rejected on this ground (see,
e.g., No. 8261/78, Dec. 11.10.79, D.R. 18 p. 150, confirmed in
No. 11306/84, Dec. 16.10.86, D.R. 50 p. 162). On the other hand, where
a court gives judgment after the entry into force of the Convention,
the Commission is competent to ensure that the proceedings leading up
to this judgment were in conformity with the Convention, as the
proceedings before a court are embodied in its final decision which
thus incorporates any defect by which they may have been affected
(ibid.).
The present complaint does not relate to the taxation proceedings
as such but to their substantive outcome and effects on the applicants.
In these circumstances the Commission considers that it is not
competent ratione temporis to examine it, insofar as it pertains to the
church taxes imposed for 1988-89 (cf., e.g., Eur. Court H.R.,
Stamoulakatos v. Greece judgment of 26 October 1993, Series A no. 271,
pp. 13-14, paras. 29-33). A different finding would amount to giving
the Convention retroactive effect which it does not have.
It follows that this aspect of the complaint is incompatible
ratione temporis with the provisions of the Convention within the
meaning of Article 27 para. 2 (Art. 27-2).
b) The taxes imposed for 1990 and 1993-94
(i) The Commission has next considered if and to what extent the
various applicants may claim status as "victims" within the meaning of
Article 25 para. 1 (Art. 25-1) of the Convention on account of the
taxes imposed on the company for 1990 and 1993-94 and either directly
or indirectly reserved for Church activities. Under this provision the
Commission may receive petitions from any person, non-governmental
organisation or group of individuals claiming to be the "victim" of a
violation by one of the High Contracting Parties of the rights set
forth in this Convention. The term "victim" denotes the person directly
affected by the act or omission at issue (see, e.g., Eur. Court H.R.,
Eckle judgment of 15 July 1982, Series A no. 51, p. 30, para. 66).
In the present case the taxes at issue were levied exclusively
on the applicant company and appeals against the taxation could only
be brought by the applicant company itself. It is true that the
applicant association is the company's majority shareholder. The
Commission nevertheless finds that neither the association nor the
third applicant was decisively affected by the imposition of the taxes
on the company, also having regard to the minor amounts at stake.
In these circumstances the Commission considers that the
applicant association and Mr. Sundström cannot claim to be "victims"
within the meaning of Article 25 (Art. 25) of a violation of their
rights under Article 9. It follows that, insofar as the complaint has
been lodged by those applicants and insofar as it pertains to the taxes
imposed on the company for 1990 and 1993-94 which were either directly
or indirectly reserved for Church activities, it must be rejected as
being incompatible ratione personae with the provisions of the
Convention within the meaning of Article 27 para. 2 (Art. 27-2).
(ii) Insofar as the applicant company was ordered to pay the taxes
imposed for 1990 and 1993-94 and either directly or indirectly reserved
for Church activities, the Commission recalls that under Article 26
(Art. 26) it may only deal with an application after all domestic
remedies have been exhausted, according to the generally recognised
rules of international law. An applicant must thus make use of remedies
which are effective and adequate. To be effective, a remedy must be
capable of remedying directly the impugned state of affairs (see, e.g.,
No. 13251/87, Dec. 6.3.91, D.R. 68 pp. 137 et seq., at pp. 163-164).
The burden of proving the existence of available and sufficient
remedies lies upon the State (see, e.g., Eur. Court H.R., Deweer
judgment of 27 February 1980, Series A no. 35, p. 15, para. 26). An
extraordinary remedy which is dependent on the discretionary power of
a public authority cannot be considered an effective remedy for the
purposes of Article 26 (Art. 26) (No. 14545/89, Dec. 9.10.90, D.R. 66
pp. 238 et seq., at p. 245).
In the present case the Government have argued that the applicant
company should have requested exemption from the taxes imposed for the
tax years 1988-90 and reserved for Church activities. Insofar as the
company's complaint pertains to 1988-89 the Commission has already
found it to be inadmissible for the reasons set out in point a) above.
As far as the complaint concerns the tax imposed for 1990, the
Commission finds no substantiation of the Government's argument that
an exemption request could have afforded the company any reasonable
prospects of success. This remedy was rather of an extraordinary
character. The Commission does not therefore find that the remedy
referred to by the Government was effective for the purposes of
Article 26 (Art. 26). It follows that the Government's objection must
be rejected.
(iii) Turning to the substance of the complaint, the Commission
recalls that the first limb of Article 9 para. 1 (Art. 9-1) guarantees
to "everyone" a general right to freedom of thought, conscience and
religion which cannot be restricted (see, e.g., Darby v. Sweden, Comm.
Report 9.5.89, para. 44, Eur. Court H.R., Series A no. 187, p. 17). The
freedom enshrined in Article 9 (Art. 9) is one of the foundations of
a "democratic society" within the meaning of the Convention and is,
among other characteristics, a precious asset for atheists, agnostics,
sceptics and the unconcerned (see the above-mentioned Kokkinakis
judgment, p. 17, para. 31).
The Commission has repeatedly held that a church body or an
association with religious and philosophical objects is capable of
possessing and exercising the right to freedom of religion, since an
application by such a body is in reality lodged on behalf of its
members (see No. 7805/77, Dec. 5.5.79, D.R. 16 pp. 68 et seq., at
p. 70; No. 8118/77, Dec. 19.3.81, D.R. 25 pp. 105 et seq., at p. 117;
No. 12587/86, Dec. 14.7.87, D.R. 53 pp. 241 et seq., at p. 246). By
contrast, the Commission has held that a limited liability company,
given the fact that it concerns a profit-making corporate body, can
neither enjoy nor rely on the rights referred to in Article 9 para. 1
(Art. 9-1) (see No. 7865/77, Dec. 27.2.79, D.R. 16 p. 85; cf. No.
11921/86, Dec. 12.10.88, D.R. 57 pp. 81 et seq., at p. 88).
In the present case the Government have argued that the applicant
company is neither a religious nor a philosophical community but a
limited liability company which aims at generating profit for its
shareholders. Domestic law did not prevent the freethinkers from
exercising their allegedly minor commercial activities in the name of
the applicant association. The applicant company, for its part, has
contended that it was created principally in order to publish and sell
books promoting the aims of the freethinkers and not in order to
produce profit. It may therefore enjoy freedom of religion within the
meaning of Article 9 (Art. 9). A finding to the contrary would
effectively limit the freethinkers' possibility of organising
themselves with a view to manifesting their beliefs.
The Commission recalls that pursuant to the second limb of
Article 9 para. 1 (Art. 9-1) the general right to freedom of religion
includes, inter alia, freedom to manifest a religion or "belief" either
alone or "in community with others" whether in public or in private.
The Commission would therefore not exclude that the applicant
association is in principle capable of possessing and exercising rights
under Article 9 para. 1 (Art. 9-1). However, the complaint now before
the Commission merely concerns the obligation of the applicant company
to pay taxes reserved for Church activities. The company form may have
been a deliberate choice on the part of the applicant association and
its branches for the pursuance of part of the freethinkers' activities.
Nevertheless, for the purposes of domestic law this applicant was
registered as a corporate body with limited liability. As such it is
in principle required by domestic law to pay tax as any other corporate
body, regardless of the underlying purpose of its activities on account
of its links with the applicant association and its branches and
irrespective of the final receiver of the tax revenues collected from
it. Finally, it has not been shown that the applicant association would
have been prevented from pursuing the company's commercial activities
in its own name.
The Commission therefore concludes that in the circumstances of
the present case the applicant company cannot rely on the rights
referred to in Article 9 para. 1 (Art. 9-1). It follows that, insofar
as the complaint has been lodged by the applicant company and insofar
as it pertains to the taxes imposed on the company for 1990 and 1993-94
which were either directly or indirectly reserved for Church
activities, it must be rejected as being manifestly ill-founded within
the meaning of Article 27 para. 2 (Art. 27-2) of the Convention.
2. The length of the proceedings
The applicants furthermore complain that the applicant company's
appeals against the church tax levied for the tax years 1988-90 were
not determined by a court "within a reasonable time". They invoke
Article 6 para. 1 (Art. 6-1) of the Convention which reads, as far as
relevant, as follows:
"In the determination of his civil rights and obligations
..., everyone is entitled to a fair ... hearing within a
reasonable time by [a] ... tribunal established by law."
The Government submit that Article 6 para. 1 (Art. 6-1) is not
applicable to tax assessments.
The applicants contend that Article 6 para. 1 (Art. 6-1) is
applicable, relying on the Court's judgments in Salesi v. Italy (Eur.
Court H.R., Series A no. 257-E, judgment of 26 February 1993) and
Schuler-Zgraggen v. Switzerland (Eur. Court H.R., Series A no. 263,
judgment of 24 June 1993). They submit that the Finnish tax legislation
applied in the case concerns the legally recognised "rights" of tax
payers. These rights are of a pecuniary nature and the tax assessments
may furthermore be challenged before administrative courts. The
proceedings at issue determined the company's "civil rights" within the
meaning of Article 6 para. 1 (Art. 6-1).
For the reasons elaborated below, the Commission need not
determine whether and, if so, to what extent it would be competent
ratione temporis to examine this complaint. Nor does it need to examine
whether the applicant association and Mr. Sundström may claim to be
victims within the meaning of Article 25 (Art. 25) of the Convention
of a violation of Article 6 para. 1 (Art. 6-1) on account of the facts
underlying the present complaint.
The Commission recalls that Article 6 para. 1 (Art. 6-1) is not
applicable to taxation proceedings as such, since these do not
determine any civil rights or obligations (see No. 11189/84, Dec.
11.12.86, D.R. 50 pp. 121-141, at p. 140, with further references; cf.
also Eur. Court H.R., Schouten and Meldrum judgment of 9 December 1994,
Series A no. 304, pp. 20-21, para. 50).
It follows that this complaint must be rejected as being
incompatible ratione materiae with the provisions of the Convention
within the meaning of Article 27 para. 2 (Art. 27-2).
3. The non-reimbursement rule
The applicants finally complain that in view of the minor amounts
at stake the church tax levied on the applicant company could not have
been reimbursed to it, even if the applicants' appeals had been
successful. They again invoke Article 6 para. 1 (Art. 6-1) of the
Convention.
For the reasons below, the Commission need not determine whether
and, if so, to what extent it would be competent ratione temporis to
examine this complaint. Nor does it need to examine whether the
applicant association and Mr. Sundström may claim to be victims within
the meaning of Article 25 (Art. 25) of the Convention of a violation
of the Convention or any of its Protocols on account of the facts
underlying the present complaint.
The Commission considers that this complaint falls to be examined
under Article 1 of Protocol No. 1 (P1-1) to the Convention 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."
Assuming that the above provision is applicable, the Commission
observes that in view of the minor amounts at stake the applicant
company would have been unable to obtain a reimbursement of wrongly
levied tax even if an appeal had been successful. This situation could
be considered as resulting in a deprivation of the company's
possessions within the meaning of the second sentence of the first
paragraph of Article 1 (Art. 1-1). Such a deprivation would not only
have to pursue a legitimate aim in the public interest, but there would
also have to be a reasonable relationship of proportionality between
the means employed and the aim sought to be realised. The required
balance of public and private interests would not be found, if the
company had had to bear an individual and excessive burden (cf., e.g.,
Eur. Court H.R., Lithgow judgment of 8 July 1986, Series A no. 102, p.
50, para. 120).
In the Commission's opinion the non-reimbursement rule challenged
by the applicants must be assumed to aim at avoiding disproportionate
administrative costs. This is a legitimate aim in the public interest.
Moreover, it has not been shown that the fact that any wrongly levied
tax could not be reimbursed has burdened the applicant company
excessively. In these circumstances there is no appearance of any
improper balancing of interests. The non-reimbursement is, moreover,
based on section 9 of the 1978 Decree on Tax Collection and is thus
subject to general conditions provided for by law. Accordingly, the
Commission finds no appearance that the applicant company's lack of a
possibility of obtaining a reimbursement of any wrongly levied tax is
in violation of Article 1 of Protocol No. 1 (P1-1).
It follows that this aspect of the complaint must also be
rejected as being manifestly ill-founded within the meaning of
Article 27 para. 2 (Art. 27-2) of the Convention.
For these reasons, the Commission, by a majority,
DECLARES THE APPLICATION INADMISSIBLE.
Secretary to the Commission President of the Commission
(H.C. KRÜGER) (S. TRECHSEL)
Full & Egal Universal Law Academy