AS TO THE ADMISSIBILITY
Application No. 11692/85
by Gunnar SÖDERBERG BYGGNADS AB
against Sweden
The European Commission of Human Rights sitting in private on
5 October 1987, the following members being present:
MM. C.A. NØRGAARD, President
M.A. TRIANTAFYLLIDES
E. BUSUTTIL
A.S. GÖZÜBÜYÜK
A. WEITZEL
H.G. SCHERMERS
H. DANELIUS
G. BATLINER
J. CAMPINOS
H. VANDENBERGHE
Mrs. G.H. THUNE
Sir Basil HALL
MM. F. MARTINEZ
C.L. ROZAKIS
Mrs. J. LIDDY
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 12 March 1984
by Gunnar SÖDERBERG BYGGNADS AB against Sweden and registered
on 8 August 1985 under file No. 11692/85;
Having regard to the report provided for in Rule 40 of the
Rules of Procedure of the Commission;
Having deliberated;
Decides as follows:
THE FACTS
The facts of the case, as submitted by the applicant company,
may be summarised as follows:
The applicant is a joint stock company with a minor enterprise
in the building contractor branch in the Stockholm area. It is
represented before the Commission by Mr. Göran Ravnsborg, a lecturer
of law at the University of Lund.
In a tax audit report drawn up by the County Administrative
Board (länsstyrelsen) of Stockholm it was observed that the applicant
company had employed staff of two sub-contracting companies, but
that the sub-contracting companies had not fulfilled their obligations
to pay tax and social security fees (arbetsgivaravgifter) for its staff
during 1979 and 1980. As a result, the National Social Insurance
Board (riksförsäkringsverket) raised the question whether the
applicant company should be regarded as the actual employer of the
staff of the sub-contracting companies and, as such, responsible for
the payment of the social security fees regarding such staff.
By decision of 12 March 1982 the National Social Insurance
Board decided that the applicant company was responsible for the
payment of social security fees for the staff of the sub-contracting
companies for the years of 1979 and 1980 and it accordingly increased
the fee which the applicant company had to pay by 329.089 SEK.
Since the decision was immediately enforceable, the applicant
company asked for a stay of its enforcement. The request was refused,
the final decision being taken by the Supreme Administrative Court
(regeringsrätten) on 22 July 1982.
On 18 June and 18 August 1982 the applicant company paid the
sum due.
The applicant company appealed against the decision of the
National Social Insurance Board to the Administrave Court of Appeal
(kammarrätten) in Stockholm. In a judgment of 24 March 1983 the
Administrative Court of Appeal quashed the decision of the National
Social Insurance Board.
On 15 June 1983 the National Social Insurance Board paid back
the sum of 358.740 SEK which included 29.651 SEK as interest (9%).
The interest had been incorrectly calculated and was subsequently
increased by 2.708 SEK to which was added further interest of 94 SEK.
The National Social Insurance Board appealed against this
judgment to the Supreme Administrative Court which rejected the appeal
on 4 October 1985.
A further result of the original audit report was that the
local tax authority decided to charge the applicant company with
personal preliminary taxes for employees amounting to 354.487 SEK. The
company was granted an extension of time to make the payment.
Subsequently, on 20 October 1983 the tax authority revoked its claim.
Accordingly, no additional preliminary taxes were paid by the company.
However, the company had to reserve the amount in its book-keeping.
The audit report also resulted in a decision by the County
Administrative Board (länsstyrelsen) of Stockholm of 22 December 1981
to impose additional value added tax (VAT) of 118.844 SEK. The amount
was offset against claims that the applicant company had as a result
of excess VAT paid for a later period.
Upon appeal from the applicant company, the County
Administrative Court (länsrätten) of Stockholm decided on 12 October
1983 to revoke the decision of the County Administrative Board, and
the additional VAT was repaid on 18 November 1983. The repayment of
VAT did not include interest for the period July 1981 - November 1983.
The representative of the State appealed against the judgment
of the County Administrative Court. The appeal was rejected by the
Administrative Court of Appeal of Stockholm on 10 May 1985.
The applicant company appealed against the decision not to pay
interest on the excess payment of VAT. The appeal was rejected by
the Administrative Court of Appeal of Stockholm on 10 May 1985. The
applicant company appealed to the Supreme Administrative Court which,
on 7 January 1986, refused leave to appeal.
While the appeals were pending, the company was forced to pay
the social security fees concerned and the VAT. The company was
thereby allegedly emptied of most of its working capital. It became a
bad payer and lost goodwill. In consequence of this it sustained
heavy losses.
Although the company's appeal was successful, it could not
under Swedish law be compensated for any losses it had suffered, nor
for its legal costs.
COMPLAINTS
The applicant company complains that the decision by the
National Social Insurance Board was illegal and to be considered as a
confiscation of the company's liquid funds. It also complains of the
decision to charge additional VAT. The company claims full
compensation for all costs and losses it has sustained as a result of
these decisions. It alleges a violation of Article 1 of Protocol
No. 1. The applicant company also alleges violations of Article 6
para. 1 and Article 14 of the Convention.
THE LAW
1. The applicant company invokes Article 1 of Protocol No. 1 (P1-1) and
claims compensation for the losses it has suffered and for its legal
costs.
Article 1 of Protocol No. 1 (P1-1) provides:
"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 the applicant company was
successful in its appeal to the Administrative Court of Appeal and
that it was thus eventually not obliged to pay the additional social
security fees. It was equally successful concerning the charge of
additional VAT, since the County Administrative Court accepted the
appeal. The applicant company claims that, in addition, it has a
right to compensation for losses and legal costs resulting from the
decisions.
The Commission first observes that the Convention, including
Article 1 of Protocol No. 1 (P1-1), does not as such guarantee a right
to recover costs of proceedings.
The question which remains is whether Article 1 of Protocol No. 1
(P1-1) company had to pay social security fees in the amount of 329.089 SEK
during a period of almost one year and VAT of 118.844 SEK for more than two
years and reserve in its books a further amount of 354.487 SEK for possible tax
charges, given the alleged results thereof of inter alia lost working capital
and loss of goodwill. The Commission considers that the fact that the fees
imposed were payable while the proceedings concerning the appeals to the
Administrative Courts were pending does not as such raise any issue under
Article 1 (Art. 1). The Commission moreover observes that the applicant
company was reimbursed the fees it paid and that it also received an interest
of 9% on the amount paid for social security fees.
It is true that no interest was recovered on the VAT. However,
paragraph 2 of Article 1 of Protocol No. 1 (P1-1-1) authorises the State to
enforce such laws as it deems necessary to secure payment of taxes and
other contributions, such as social security fees and VAT.
In conclusion the Commission finds no indication of a
violation of the applicant company's rights under Article 1 of
Protocol No. 1 (P1-1).
It follows that this part of the application is manifestly ill-founded
within the meaning of Article 27 para. 2 (Art. 27-1) of the Convention.
2. The applicant company also complains of a violation of Article
6 para. 1 (Art. 6-1) of the Convention.
The Commission has consistently held that Article 6 para. 1 (Art. 6-1)
of the Convention does not govern proceedings relating to tax assessments (No.
9908/82, Dec. 4.5.83, D.R. 32 p. 266). It considers that Article 6 (Art. 6)
also does not apply to proceedings concerning the alleged responsibility of a
company for taxes of subcontracting companies' employees, nor to proceedings
concerning the fixing of social security fees of the nature at issue in this
case.
It follows that this part of the application is incompatible
ratione materiae with the provisions of the Convention within the
meaning of Article 27 para. 2 (Art. 27-2) of the Convention.
3. The applicant company finally complains of a violation of Article 14
(Art. 14) of the Convention in conjunction with Article 6 para. 1 and Article 1
of Protocol No. 1 (Art. 6-1, P1-1).
The Commission finds no separate issue in this respect.
For these reasons, the Commission
DECLARES THE APPLICATION INADMISSIBLE
Secretary to the Commission President of the Commission
(H.C. KRÜGER) (C.A. NØRGAARD)