Information Note on the Court’s case-law 213

December 2017

P. Plaisier B.V. and Others v. the Netherlands (dec.) - 46184/16, 47789/16 and 19958/17

Decision 14.11.2017 [Section III]

Article 1 of Protocol No. 1

Article 1 para. 2 of Protocol No. 1

Secure the payment of taxes

Levy of tax surcharge on employers in response to sovereign debt crisis: inadmissible

Article 14

Discrimination

Levy of high-wages tax surcharge on employers in response to sovereign debt crisis: inadmissible

Facts – In 2012, against the backdrop of the sovereign debt crisis in Europe, the Netherlands Parliament introduced a high-wages tax surcharge to help ensure compliance with the State’s European Union obligations on budget deficit. The surcharge was intended as a temporary measure for 2013 (although it was in fact renewed once in 2014) and was levied only on employers who had paid employees wages in excess of EUR 150,000 pre-tax during the previous tax year (2012).

The three applicant companies were liable to the surcharge. In the Convention proceedings, they complained under Article 1 of Protocol No. 1 that they had been subjected to a tax that had retrospective effects, and that the surcharge had been imposed without regard for possible individual hardship, had been targeted at an unaccountably small group of employers and was disproportionate in relation to the tax revenue actually raised. They also complained under Article 14 o f the Convention that the surcharge had been applied arbitrarily to only a small proportion of taxpayers.

Law – Article 1 of Protocol No. 1: The sole issue before the Court was the proportionality of the measure. There could be no doubt that the Netherlands was entitled in principle to take far-reaching measures to bring the economy back into line with its intern ational obligations, as indeed were the other Member States whose measures had been the object of applications to the Court. That entitlement was however subject to the proviso that no “individual and excessive burden” be imposed on any person.

Taking into account the States’ margin of appreciation in taxation matters, the Court considered that the measure taken had not upset the balance which had to be struck between the demands of the public interest and the protection of the applicant companies’ rights. In particular:

(i) Retrospective tax legislation was not as such prohibited by Article 1 of Protocol No. 1. Provided there were specific and compelling reasons, the public interest could override the interest of the individual in knowing his or her tax li abilities in advance. The considerations that had guided the Netherlands legislature in the applicant companies’ case were not “merely budgetary”: in common with other Member States of the EU, the Netherlands had been concerned to meet its obligations unde r EU law without delay, in circumstances aggravated by a financial and economic crisis of a magnitude seldom seen in peacetime.

(ii) Although one of the applicant companies (Feyenoord Rotterdam N.V.) had submitted that the surcharge had endangered its sta nding as a professional club football employer, the domestic court had considered the implications of the measure on the company’s overall financial situation in detail before rejecting that submission. It could not therefore be said that an individual ass essment had been excluded.

(iii) Although only a relatively small proportion of taxpayers were affected by the surcharge, that legislative choice had not been devoid of reasonable foundation given the temporary nature of the measure and the expected incre ased difficulty of attracting new businesses if other options, such as bringing in an additional tax bracket, were followed.

(iv) The Court could not accept that the surcharge had affected so few taxpayers that its impact on the State budget was minimal and that other measures would have resulted in more meaningful revenue. In that connection, it reiterated that, provided that the legislature chose a method that could be regarded as reasonable and suited to achieving the legitimate aim being pursued, it w as not for the Court to say whether the legislation represented the best solution for dealing with the problem or whether the legislative discretion should have been exercised in another way.

Conclusion : inadmissible (manifestly ill-founded).

Article 14 of the Convention in conjunction with Article 1 of Protocol No. 1: This complaint, in essence, coincided with the complaint that the surcharge affected only a very small group of employers. As such, it had already been adequately addressed under Article 1 of Protocol No. 1 taken alone.

Conclusion : inadmissible (manifestly ill-founded).

(See also Koufaki and Adedy v. Greece (dec.), 57665/12 and 57657/12, 7 May 2013, Information Note 163 ; Mam atas and Others v. Greece , 63066/14 et al., 21 July 2016, Information Note 198 ; and the other cases mentioned in the Factsheet on Austerity measures )

© Council of Europe/European Court of Human Rights This summary by the Registry does not bind the Court.

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