AS TO THE ADMISSIBILITY OF

                      Application No. 26560/95

                      by Alfred MIKA

                      against Austria

     The European Commission of Human Rights (First Chamber) sitting

in private on 26 June 1996, the following members being present:

           Mr.   C.L. ROZAKIS, President

           Mrs.  J. LIDDY

           MM.   A.S. GÖZÜBÜYÜK

                 A. WEITZEL

                 M.P. PELLONPÄÄ

                 B. MARXER

                 G.B. REFFI

                 B. CONFORTI

                 N. BRATZA

                 I. BÉKÉS

                 G. RESS

                 A. PERENIC

                 C. BÎRSAN

                 K. HERNDL

           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 application introduced on 23 September 1994

by Alfred MIKA against Austria and registered on 17 February 1995 under

file No. 26560/95;

     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 applicant is an Austrian national, residing in Aistersheim.

In the proceedings before the Commission he is represented by Mr. L.J.

Kempf, a lawyer practising in Peuerbach.

A.   Particular circumstances of the case

     The facts of the case, as submitted by the applicant, may be

summarised as follows.

     The applicant is married and has six children. He is a

psychologist by profession.

      On 12 March 1993 the Upper Austria Finance Directorate

(Finanzlandesdirektion) dismissed the applicant's appeal relating to

his income tax assessments for the years 1986 to 1991.

     The Finance Directorate dismissed the applicant's request that

his maintenance payments to his wife and his six children be considered

as extraordinary expenses (außergewöhnliche Belastung) within the

meaning of S. 34 of the Income Tax Act (Einkommenssteuergesetz). It

noted that expenses were extraordinary, if they were higher than those

incurred by the majority of taxable persons of the same income, the

same financial circumstances and the same marital status. It further

noted that the Constitutional Court (Verfassungsgerichtshof) on

12 December 1991 had annulled the words "and the same marital status"

in S. 34 para. 2 of the Income Tax Act of 1972 and S. 34 para. 2 of the

Income Tax Act of 1988, as discriminating against parents with

maintenance obligations. However, the Court had emphasized that the

legislator was free to amend the law by changing the tariff, by

introducing tax-free amounts or by providing for transfer payments. It

followed that maintenance payments to children were not necessarily to

be qualified as extraordinary expenses. It followed further from the

Constitutional Court's judgment of 10 June 1992 that the arguments

adduced by the court in the first-mentioned judgment did not apply to

maintenance payments to spouses.

     On 17 May 1993 the applicant lodged a complaint with the

Constitutional Court. He submitted in particular that the Finance

Directorate had violated his right to equality before the law in that

it had refused to accept maintenance payments to his wife and children

as extraordinary expenses, which would lower the assessment basis. The

contested decision was based on an unconstitutional law, namely S. 34

para. 2 of the Income Tax Act 1972 and S. 34 para. 2 of the Income Tax

Act 1988, which continued to apply to his case despite the annulment

decision of the Constitutional Court. The applicant considered in

particular that income tax law was generally guided by the principle

of personal financial capacity. He maintained that the said provision

contained an exception from that principle, for which there was no

objective justification. He was discriminated against as, although his

financial capacity was lower, his income tax was assessed on the same

basis as the income tax of persons not having maintenance obligations.

     On 28 September 1993 the Constitutional Court refused to deal

with the applicant's complaint on the ground that it lacked sufficient

prospects of success. It referred to its constant case-law concerning

Article 140 para. 7 of the Federal Constitutional Act (Bundes-

Verfassungsgesetz) and, as regards maintenance payments to spouses, to

its decision of 10 June 1992. It referred the case to the

Administrative Court (Verwaltungsgerichtshof).

     On 14 December 1993 the Administrative Court rejected the

applicant's complaint as far as it related to the income tax

assessments for 1989 to 1991 on formal grounds.

     On 22 February 1994 the Administrative Court dismissed the

applicant's complaint as regards the income tax assessments for 1986

to 1988. The court found that the annulment of the words "and the same

marital status" in S. 34 para. 2 of the 1972 Income Tax Act 1972 by the

Constitutional Court's judgment of 12 December 1991, did not affect the

applicant's case as it was not the case in point within the meaning of

Article 140 para. 7 of the Federal Constitutional Act. As a result of

the Constitutional Court's annulment decision the provision could not

be challenged anew. The Finance Directorate had correctly applied S. 34

para. 2 of the 1972 Income Tax Act in the version applicable to the

assessment period. Maintenance payments which did not exceed the

payments made by the majority of taxable persons of the same income,

the same financial circumstances and the same marital status were not

to be considered as extraordinary expenses, the term "marital status"

referring not only to the question whether the taxable person was

single (divorced, widowed) or married but also to the number of

children he had to maintain. The applicant had failed to claim that he

had incurred any extraordinary costs, as for example expenses for a

boarding school or expenses on the ground of the illness of one of his

children. As regards the applicant's complaint that the said provision

was discriminatory, the Administrative Court found that its examination

did not fall within its competence.

     The decision was served on the applicant on 25 March 1994.

B.   Relevant domestic law and practice

1.   The 1972 and 1988 Income Tax Act

     S. 34 para. 2 of the Income Tax Act 1972 (Einkommenssteuergesetz)

in its former version, provided as follows:

     "Eine außergewöhnliche Belastung, die zu einer Ermäßigung der

Einkommenssteuer führt, liegt vor, wenn einem Steuerpflichtigen

zwangsläufig ... größere Aufwendungen als der Mehrzahl der

Steuerpflichtigen gleicher Einkommensverhältnisse, gleicher

Vermögensverhältnisse und gleichen Familienstandes erwachsen."

     "Extraordinary expenses, leading to a reduction of income tax,

are allowed, if a taxable person inevitably ... incurs higher

expenditure than the majority of taxable persons of the same income,

the same financial circumstances and the same marital status."

     S. 34 para. 2 of the 1988 Income Tax Act provided as follows:

     "Die Belastung ist außergewöhnlich, soweit sie höher ist als

jene, die der Mehrzahl der Steuerpflichtigen gleicher Einkommens-

verhältnisse, gleicher Vermögensverhältnisse und gleichen

Familienstandes erwächst."

     "Expenses are extraordinary, insofar as they are higher than

those incurred by the majority of taxable persons of the same income,

the same financial situation and the same marital status."

     According to S. 125 the 1988 Income Tax Act was to be applied for

the first time to the tax assessment for 1989.

2.   Decisions of the Constitutional Court

a.   In its decision of 12 December 1991 the Constitutional Court

annulled the wording "and the same marital status" in S. 34 para. 2 of

the 1972 Income Tax Act.

     In its reasoning the Constitutional Court referred to its

decision concerning the introduction of norm control proceedings

(Gesetzprüfungsverfahren). It had departed from the consideration that

the wording " and of the same marital status" referred not only to the

question whether the taxable person was single (divorced, widowed) or

married but also to the number of children he had to maintain. It

followed that maintenance payments to children were not to be

considered as extraordinary expenses, except in very particular

circumstances. The Court had then argued that the lack of a possibility

to claim maintenance payments to children as extraordinary expenses

seemed to be incompatible with the possibility under S. 34 para. 3 to

claim maintenance payments to a divorced spouse as extraordinary

expenses. Further, S. 34 para. 1 generally applied to expenses which

were inevitable and lowered the financial capacity (wirtschafliche

Leistungsfähigkeit). Given that maintenance payments fulfilled these

criteria, the Court had doubts whether there was an objective reason

justifying the fact that they could not qualify as extraordinary

expenses. Finally, despite the fact that parents received family

allowance and other benefits from the state, the 1972 Income Tax Act

appeared to be discriminatory by disregarding the reduced financial

capacity of persons with maintenance obligations.

     Having regard to the above considerations, the Constitutional

Court found that the wording "and the same marital status" led to the

exclusion of the deduction of maintenance payments as extraordinary

expenses and violated the principle of equality before the law, as it

discriminated against parents with maintenance obligations. It pointed

out in particular that income tax law was guided by the principle of

personal financial capacity. Any exception from this principle required

an objective justification. Even considering that people with

maintenance obligations received family allowance from the state, the

need to maintain their children reduced their financial capacity.

     Finally, the Constitutional Court emphasised that the legislator

was free to choose the means, when amending the law in order to achieve

conformity with the constitution. He could for instance change the

tariff or introduce tax-free amounts or provide for transfer payments.

However, within the existing system of income tax law, the annulment

of part of S. 34 para. 2 was the only possibility to avoid

discrimination against parents.

     The Constitutional Court found that it was not necessary to set

a time-limit for the annulment to enter into force, as the annulled

provision continued to apply to circumstances which occurred before the

annulment decision, with the exclusion of the case in point

(Anlaßfall). Further, the applicability of the law was limited by

S. 125 of the 1988 Income Tax Act, according to which the said Act

applied as from 1989.

b.   In a further decision of 12 December 1991 the Constitutional

Court annulled the wording "and the same marital status" in S. 34

para. 2 of the 1988 Income Tax Act. It referred to the reasoning of its

judgment concerning S. 34 para. 2 of the 1972 Income Tax Act.

     According to the decision the annulled provision should continue

to apply until the entry into force of an eventual amendment. Should

no amendment be made, the unconstitutional provision was to become

ineffective on 31 December 1992.

c.   The Constitutional Court's decision of 10 June 1992 also relates

to the question whether maintenance payments to children and to a

spouse could qualify as extraordinary expenses within the meaning of

S. 34 para. 2 of the 1988 Income Tax Act. The Court recalled its

annulment decision of 12 December 1991. Further it referred to its

constant case-law concerning Article 140 para. 7 of the Federal

Constitutional Act, according to which cases which were already pending

before it at the time of the oral hearing, or in absence of a hearing

at the beginning of the private deliberations in the relevant norm

control proceedings, are to be treated like the case in point, i.e. the

case which gave rise to the introduction of the norm control

proceedings.

     The Constitutional Court noted that the private deliberations in

the norm control proceedings had taken place on 12 December 1991 and

that the complaint had been received before that date. Thus, it had to

be treated like the case in point and the contested tax decision had

to be set aside. However, as regards maintenance payments to spouses,

the Constitutional Court noted that the reasoning of its above-

mentioned annulment decision could not be applied to maintenance

payments to spouses. It argued in particular that the spouses's right

to maintenance depended on how the spouses organised their life, e.g.

on whether one of them stayed at home to take care of the children.

COMPLAINTS

1.   The applicant complains under Article 1 of Protocol No. 1 that

he was taxed on the basis of S. 34 para. 2 of the Income Tax Act 1972.

He submits that part of this provision had been annulled by the

Constitutional Court as being discriminatory, but continued to be in

force and could not be challenged by him.

2.   Further, the applicant complains under Article 13 of the

Convention that he did not have an effective remedy to challenge his

taxation on the basis of an unconstitutional law.

3.   The applicant complains under Article 14 of the Convention that

he was discriminated against by the Austrian authorities' decisions.

Firstly, he submits that the Constitutional Court only exempted a

particular group of cases from the further application of the annulled

provision, namely those in which an appeal was pending. Secondly he

submits that S. 34 para. 2 of the 1972 and 1988 Income Tax Act was

discriminatory in that it did not accept maintenance payments as

extraordinary expenses, which would lower the assessment basis. Thus,

the principle of personal financial capacity which otherwise guides

income tax law was infringed and taxable persons with obligations to

pay maintenance were discriminated against in comparison with persons

of the same income not having such obligations.

THE LAW

1.   The applicant complains under Article 1 of Protocol No. 1 (P1-1)

that he was taxed on the basis of S. 34 para. 2 of the 1972 Income Tax

Act. He submits that part of this provision had been annulled by the

Constitutional Court as being discriminatory, but continued to be in

force and could not be challenged by him.

     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 observes that the second paragraph of Article 1

of Protocol No. 1 (P1-1) expressly leaves unimpaired the State's right

to enforce such laws as it deems necessary to secure the payment of

taxes. Therefore, the duty to pay taxes falls within its field of

application (Eur. Court H.R., Darby judgment of 23 October 1990, Series

A no. 187, p. 12, para. 30).

     The Commission recalls that the principle of legal certainty,

inherent in the Convention, may dispense States from reopening legal

acts or situations which antedate judgments of the European Court of

Human Rights declaring domestic legislation incompatible with the

Convention. The same principle applies where a Constitutional Court

annuls legislation as unconstitutional (cf. No. 22651/93, Dec.

18.10.95, D.R. 83-A p.14)

      The applicant complains about his taxation under the 1972 Income

Tax Act, i.e. the tax assessment for 1986 to 1988. The Commission notes

that S. 34 para. 2 of the 1972 Income Tax Act was in force during the

relevant assessment period, as the Constitutional Court's annulment

decision was only given on 12 December 1991. The Court ruled that the

annulled provision should continue to apply to circumstances which

occurred before the annulment decision, only the case in point being

excluded. Further, it found that it was not necessary to set a time-

limit for the annulment to enter into force, as the applicability of

the law was limited by the 1988 Income Tax Act, which applied for the

first time to the tax assessment for 1989.

     The Commission finds that the continued application of S. 34

para. 2 of the 1972 Income Tax Act served the interest of legal

certainty. In these circumstances, there is no appearance of a

violation of 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. 27-2) of the

Convention.

2.   Further, the applicant complains under Article 13 (Art. 13) of

the Convention that he did not have an effective remedy to challenge

his taxation on the basis of an unconstitutional law.

     Article 13 (Art. 13) reads as follows:

     "Everyone whose rights and freedoms as set forth in this

     Convention are violated shall have an effective remedy before a

     national authority notwithstanding that the violation has been

     committed by persons acting in an official capacity."

     The Commission recalls that Article 13 (Art. 13) does not go so

far as to guarantee a remedy allowing a Contracting State's laws as

such to be challenged before a national authority on the ground of

being contrary to the Convention or equivalent domestic norms (Eur.

Court H.R., James and Others judgment of 21 February 1986, Series A no.

98. p. 47, para. 85; Lithgow and Others judgment of 8 July 1986, Series

A no. 102, p. 74, para. 206).

     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.

3.   The applicant complains under Article 14 (Art. 14) of the

Convention that he was discriminated against by the Austrian

authorities' decisions. Firstly, he submits that the Constitutional

Court only exempted a particular group of cases from the further

application of the annulled provision, namely those in which an appeal

was pending. Secondly, he submits that S. 34 of both the 1972 and 1988

Income Tax Act was discriminatory in that it did not accept maintenance

payments as extraordinary expenses, which lowered the assessment basis.

     Article 14 (Art. 14) 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 notes that this complaint relates to the 1972 as

well as the 1988 Income Tax Act. The latter served as a basis for the

applicant's income tax assessments for 1989 to 1991. The Administrative

Court, on 14 December 1993, rejected the applicant's complaint relating

to these tax assessments on formal grounds. However, the Commission is

not called upon to decide whether the applicant complied with the

requirements of Article 26 (Art. 26) of the Convention, as the

complaint is in any case inadmissible.

     The Commission recalls that a treatment is discriminatory, if it

has no objective and reasonable justification, that is, if it does not

pursue a legitimate aim or if there is no reasonable relationship of

proportionality between the means employed and the aim sought to be

realised. In this respect the Contracting States enjoy a certain margin

of appreciation in assessing whether and to what extent differences in

otherwise similar situations justify a different treatment in law

(Eur. Court H.R. Lithgow and Others judgment, loc, cit., p. 66 et seq.,

para. 177).

     The Commission further recalls that the prohibition against

discrimination is also applicable in relation to taxation (Eur. Court

H.R., Darby judgment, loc. cit.).

     The Commission notes that the Austrian Constitutional Court is

empowered to annul a provision as being unconstitutional, but that it

is left to the legislator to amend the law. In the present case, the

Constitutional Court in its decision relating to the 1988 Income Tax

Act provided that the annulled provision should continue to apply until

the entry into force of an amendment, but not beyond 31 December 1992.

In its decision relating to the 1972 Income Tax Act, it did not set a

time-limit, as the applicability of the law was limited by the entry

into force of the 1988 Income Tax Act. The court ruled that the

annulled provision should continue to apply to circumstances which

occurred before the annulment decision, with the exclusion of the case

in point. According to the Constitutional Court's constant case-law,

cases in which an appeal was pending before it at a certain stage of

the norm control proceedings, were to be treated in the same way as the

case in point.

     The Commission recalls its above considerations relating to the

principle of legal certainty. It finds that in the present case the

Constitutional Court created an interim regulation of general

application, which was neither arbitrary nor based on any criteria of

personal status incompatible with Article 14 (Art. 14) of the

Convention (cf. No. 15464/89, A.P. v. Austria, Dec. 8.10.1991,

unpublished).

     It follows that this part of the application is also manifestly

ill-founded within the meaning of Article 27 para. 2 (Art. 27-2) of the

Convention.

     For these reasons, the Commission, unanimously,

     DECLARES THE APPLICATION INADMISSIBLE.

Secretary to the First Chamber       President of the First Chamber

     (M.F. BUQUICCHIO)                        (C.L. ROZAKIS)