Lexploria

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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KAPPA KANZLEI UND BÜROBETRIEBS GmbH AND OTHERS AND VIVA REISEVERANSTALTUNGS GmbH AND OTHERS v. AUSTRIA

KAPPA KANZLEI UND BÜROBETRIEBS GmbH AND OTHERS AND VIVA REISEVERANSTALTUNGS GmbH AND OTHERS v. AUSTRIA

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