Communicated on 5 July 2018

FIRST SECTION

Application no. 50598/13 IOFIL AE against Greece lodged on 2 August 2013

SUBJECT MATTER OF THE CASE

The application concerns the imposition of tax on the applicant company for selling and rebuying shares of a subsidiary company.

The applicant is a limited liability company which owned shares of a subsidiary company that was listed in the stock market. Domestic law at the time provided that the shares ’ value presented in the balance sheet was the price for which they had been bought. In November 1999 the applicant company sold shares of the subsidiary company to members of its Management Board and rebought them the next day. According to the applicant company, it performed the above-mentioned typical transaction so as to be able to comply with its obligation under Law no. 2190/1920 to present in its annual balance sheets the real situation ( πραγματική εικόνα ) of its assets, having regard to the fact that the shares ’ value had been significantly increased form the date of their acquisition. Pursuant to Article 38 § 1 of Law no. 2238/1994, such transactions were exempted from tax under the condition that they were presented in a special reserve account.

On 9 November 2000 the applicant company submitted a tax declaration but due to an accountant ’ s error, the above-mentioned transaction was registered in an account concerning profits from sale of shares, which was subject to tax, and not to the special reserve account concerning increase in value by stock selling and rebuying of shares, which was exempted from tax. The applicant company submitted a corrected tax declaration, which however was not accepted by the Tax Authorities and the tax was imposed on the transaction. It amounted to two-thirds of the annual tax the applicant company had to pay. The applicant company lodged an application for annulment of the imposition of tax, which was initially granted but eventually dismissed by the domestic courts.

QUESTIONS tO THE PARTIES

1. Has there been an interference with the applicant company ’ s peaceful enjoyment of possessions, within the meaning of Article 1 of Protocol No. 1 to the Convention, on account of the imposition of tax on the transactions concerning selling and rebuying the next day shares of a subsidiary company?

2. If so, was that interference lawful and in the public interest? In particular, having regard to the domestic provisions concerning, on the one hand, the presentation of the shares in the balance sheet in the price they were bought and, on the other hand, the applicant company ’ s obligation to present in its annual balance sheets the real situation of its assets as well as Article 38 of Law no. 2238/1994, were the relevant provisions of domestic law sufficiently accessible, precise and foreseeable (see Beyeler v. Italy [GC], no. 33202/96, § 109, ECHR 2000 ‑ I)?

3. In the affirmative, did the interference strike a “fair balance” between any public interest pursued and the applicant company ’ s proprietary interest? Did it impose an excessive individual burden on the applicant company (see Immobiliare Saffi v. Italy , [GC], no. 22774/93, § 59, ECHR 1999-V)?