FOURTH SECTION
DECISION
Application no. 14875/12
P.S.
against Hungary
The European Court of Human Rights (Fourth Section), sitting on 27 June 2017 as a Committee composed of:
Paulo Pinto de Albuquerque, President,
Egidijus Kūris,
Iulia Motoc, judges,
and Andrea Tamietti, Deputy Section Registrar,
Having regard to the above application lodged on 9 March 2012,
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, Mr P.S., is a Hungarian national, who was born in 1960. The President of the Section granted the applicant’s request for his identity not to be disclosed to the public (Rule 47 § 4 of the Rules of Court). He was represented before the Court by Mr D. A. Karsai, a lawyer practising in Budapest. The Hungarian Government (“the Government”) were represented by Mr Z. Tallódi, Agent, Ministry of Justice.
2. The facts of the case, as submitted by the parties, may be summarised as follows.
3. The applicant was employed at a State-owned company. His employment was terminated by mutual agreement as of 29 October 2010.
4. Under the provisions of Act no. XC of 2010 (“the Act”), upon the termination of the applicant’s employment, a certain part of his severance payment was taxed at a 98% rate in the amount of 30,904,849 Hungarian forints (HUF) (approximately 103,000 euros (EUR)). The applicant’s employer deducted HUF 15,181,218 (EUR 50,600) from his severance payment as part of his special tax. The applicant himself was liable to pay the remaining part.
5. On 6 May 2011, in decision no. 37/2011 (V.10.) AB, the Constitutional Court annulled the provisions of the Act in respect of the five-year retroactive application of the 98% tax, relying on the right to human dignity. However, the reasoning of the decision underlined that only the taxation of revenues gathered before the 2010 tax year constituted a violation of the right to human dignity.
6. On 10 May 2011 the applicant submitted his personal income tax declaration, which arrived at the National Tax Authority on 13 May 2011. The declaration did not contain any reference to any special tax payment obligation.
7. On 9 May 2011 the Parliament again enacted the retroactive application of the 98% tax. The amendment to the Act was published in the Official Gazette on 13 May and entered into force on 14 May 2011. It provided that relevant revenues earned after 1 January 2010 were subject to special tax. Incomes received by private individuals between 1 January 2010 and 29 December 2010 were to be declared by means of self-assessment, in tax returns submitted to the National Tax Authority. The 98% special tax was payable by 20 May 2011.
8. The applicant did not rectify his tax declaration or pay the remaining tax amount by 20 May 2011. The National Tax Authority carried out an investigation on the applicant’s declaration. In its minutes delivered on 10 February 2012 the National Tax Authority established unpaid special tax in the amount of HUF 15,723,630 (EUR 52,400). Accordingly, on 15 May 2012 the National Tax Authority levied on the applicant additional personal income tax in the amount of HUF 15,723,630 (EUR 52,400), tax surcharges in the amount of HUF 3,144,726 (EUR 10,500) and late payment fine in the amount of HUF 1,624,407 (EUR 5,400).
9. Subsequently, the applicant paid the remaining part of the special tax and the surcharges imposed on him.
COMPLAINT
10. The applicant complained about the imposition of 98% tax on part of his remuneration due on termination of his employment. He relied on Article 1 of Protocol No. 1 to the Convention.
THE LAW
11. Invoking Article 1 of Protocol No. 1 to the Convention, the applicant complains that the imposition of the special tax amounted to an unjustified deprivation of property.
12. The Government argued that the applicant must have been aware of the fact that, under the amended legislation that had entered into force on 14 May 2011, he was to pay special tax until the given deadline. Therefore, the six-month time limit started on the day when the deadline for meeting the special tax obligation expired, that is, on 20 May 2011.
13. The applicant contested that argument. He argued that he had submitted his personal tax declaration on 10 May 2011, when the 98% tax had not been part of the Hungarian legal system. His tax declaration at the time of submitting was in compliance with the laws in force. The applicant was of the view that the new law was not applicable to him.
14. The Court recalls that the six-month time-limit under Article 35 § 1 of the Convention runs from the date of the final decision in the process of exhaustion of domestic remedies. Where it is clear from the outset, however, that no effective remedy is available to the applicant, the period runs from the date of the acts or measures complained of, or from the date of knowledge of that act or its effect on or prejudice to the applicant (see Dennis and Others v. the United Kingdom (dec.), no. 76573/01, 2 July 2002; and Varnava and Others v. Turkey [GC], nos. 16064/90 et al., § 157, ECHR 2009).
15. The Court considers that in the present case the six-month period started to run on 14 May 2011, when the amendment to the Act finalised the conditions of the impugned tax, and therefore the special tax became definitively payable and enforceable with regard to the applicant. The relevant amendment was published in the Official Gazette on 13 May 2011 (see paragraph 7 above); therefore the applicant must be regarded as having taken cognisance of it by 14 May 2011 at the latest (see Cselényi v Hungary (dec.) [Committee], no. 73341/12, 9 July 2013). However, the application was only submitted on 9 March 2012, that is, more than six months later.
16. It follows that the application must also be rejected for non‑compliance with the six-month time-limit, laid down in Article 35 § 1 of the Convention, and rejected, pursuant to Article 35 § 4 of the Convention.
For these reasons, the Court, unanimously,
Declares the application inadmissible.
Done in English and notified in writing on 20 July 2017.
Andrea TamiettiPaulo Pinto de Albuquerque
Deputy RegistrarPresident
Full & Egal Universal Law Academy