Published on 15 June 2026
FIRST SECTION
Application no. 18022/24
Anita POLJAK
against Croatia
lodged on 19 June 2024
communicated on 26 May 2026
SUBJECT MATTER OF THE CASE
The application concerns administrative tax proceedings in which the authorities ordered the applicant to pay income tax and pension insurance contributions on substantial sums of money she had received on her bank accounts during 2015, 2016 and 2017 from a private person and several companies based abroad.
During the proceedings the applicant argued that the money in question had been transferred to her by her extra-marital spouse (izvanbračni drug), personally and through his companies, for the purpose of establishing their family life in Croatia, and that under the relevant domestic law money transfers between extra-marital spouses were not subject to taxation. In 2022 she also obtained a final civil court judgment confirming that the extra‑marital union in question had been ongoing since 2013 and submitted it in the tax proceedings. The administrative courts, however, held that the payments had not constituted transfers between extra-marital spouses. They noted, among other things, that the applicant had for the first time invoked the extra-marital union in her objection to the tax report, which had been issued after an audit which she had persistently tried to avoid. They held that the civil court judgment attesting to her extra-marital union had been obtained solely for the purpose of avoiding paying taxes.
The applicant lodged a constitutional complaint which the Constitutional Court dismissed as unfounded by a decision of 6 February 2024, served on the applicant on 19 February 2024.
Before the Court, the applicant complains that it was unlawful for the administrative courts to disregard the final civil court judgment confirming the existence of her extra-marital union. She argues that the latter was directly contrary to their duty under the Constitution and the Courts Act to respect a final court judgment, and to the Administrative Disputes Act under which the administrative courts could rule on a preliminary question only if another competent court had not already resolved the matter. Ordering her to pay taxes on money transfers between her and her extra-marital spouse thus breached her right to respect for private life protected by Article 8 of the Convention, discriminated her in comparison to married couples and other extra-marital couples whose mutual money transfers are not susceptible to taxation, in breach of Article 14 of the Convention in conjunction with Article 1 of Protocol No. 1 thereto, and violated her property rights guaranteed by Article 1 of Protocol No. 1.
QUESTIONS TO THE PARTIES
1. Was the interference with the applicant’s right to the peaceful enjoyment of her possessions, in the form of the decision by the domestic authorities ordering her to pay taxes and pension insurance contributions, lawful as required by Article 1 of Protocol No. 1 to the Convention?
Having regard to the wide margin of appreciation enjoyed by States in the tax sphere, where there is suspicion of tax avoidance or abuse, are the authorities allowed to look beyond a formal legal recognition of a relationship and assess whether it was artificially created to avoid paying taxes (see, mutatis mutandis,“Bulves” AD v. Bulgaria, no. 3991/03, § 70, 22 January 2009; and OAO Neftyanaya Kompaniya Yukos v. Russia, no. 14902/04, §§ 588-599, 20 September 2011)?
If so, was the authorities’ finding of bad faith on the part of the applicant based on a thorough assessment of all the relevant circumstances, including the applicant’s overall conduct? Was their conclusion that the payments received by the applicant had not constituted transfers between extra-marital spouses arbitrary or manifestly unreasonable?
If the interference was lawful, did it pursue a legitimate aim and was it proportionate to the legitimate aim pursued?
2. Was the applicant discriminated against, in breach of Article 14 of the Convention, taken in conjunction with Article 1 of Protocol No. 1?
In particular, was she treated differently from persons placed in analogous situations? If so, did that difference of treatment have an objective and reasonable justification, that is, did it pursue a legitimate aim and was there a reasonable relationship of proportionality between the means employed and the aim sought to be realised (see OAO Neftyanaya Kompaniya Yukos, cited above, § 613)?
3. Did the domestic authorities’ decisions rendered in the tax proceedings, allegedly disregarding the final civil court judgment confirming the existence of the applicant’s extra-marital union, breach the applicant’s right to respect for her private life, guaranteed by Article 8 of the Convention?