The Constitutional Court found No 187 / 2015 Coll.
The Constitutional Court found of 30 June 2015 sp. zn.
Valid
The Constitutional Tribunal found
Text versions:
03.08.2015
187
FIND
The Constitutional Court
On behalf of the Republic
On 30 June 2015, the Constitutional Court decided, under point Pl.
as follows:
The proposal to repeal the provisions of Section 250 of Act No. 280 / 2009 Coll., Tax Code, as amended, is rejected.
Reasons
Definition and recap of the proposal
1. On 24 November 2014, the Constitutional Court, pursuant to Article 95 (2) of the Constitution of the Czech Republic (hereinafter referred to as "the Constitution ') and the provisions of Section 64 (3) of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended, (hereinafter referred to as" the Law on the Constitutional Court'), received the application of the Municipal Court in Prague (hereinafter referred to as "the appellant ') to repeal the provisions of Section 250 of Act No. 280 / 2009 Coll., as amended, as amended (hereinafter referred to as" the Tax Code').
2. With the applicant, three actions by the applicant - Internet Mall, a. s. ("the plaintiff") against the defendant Financial Directorate for the City of Prague seeking the annulment of the decision of the former Financial Directorate for the City of Prague of 21 October 2011, No 12887 / 11-1500- 106054, No 12888 / 11-1500- 106054 and No 12889 / 11-1500- 106054, which rejected the applicant's appeal against the payment arrangements issued by the Financial Office for Prague of 7. In accordance with the provisions of § 250 paragraph 5 of Act No. 280 / 2009 Coll., Tax Code, the claimants were fined for late filing of the value added tax return for the tax period February 2011 of CZK 51 092, for the tax period March 2011 of CZK 217 812 and for the tax period April 2011 of CZK 16 998.
3. By order of 24 July 2014 No 11Af 76 / 2011-38, the applicant brought together all three applicants for joint hearing and decision under file number 11Af 76 / 2011. The applicant argued that, in the present case, the circumstances of fulfilling the legal conditions for imposing a fine were not properly assessed, and objected to the disproportionate hardness of imposing a fine. Although the tax rules explicitly foresee ex-EAW sanctions automatically in Section 250, in the applicant's view, the constitutional requirement of proportionality of the sanctions imposed cannot be waived, therefore the principles of administrative law and adequate administrative punishment should be applied. In this context, the applicant referred to the existing case law of the Supreme Administrative Court and the Constitutional Court on proportionality in imposing sanctions in the context of the basic principles of tax administration and the claimant states that the imposition of sanctions is incorrect as it is contrary to Article 11 (1) and (5) of the Charter of Fundamental Rights and Freedoms ("the Charter ').
4. The appellant contended by the action of the contested decisions with the principle of proportionality in the imposition of sanctions found to be justified in the light of the finding of the Constitutional Court of 10 March 2004 sp. pl. ÚS 12 / 03 (N 37 / 32 SbNU 367; 300 / 2004 Coll.), in which the Constitutional Court dealt with the question of the principle of proportionality in the imposition of fines under the provisions of Section 106 of Act No. 50 / 1976 Coll., on Territorial Planning and Construction Regulations (Construction Act), as amended by Act No. 83 / 1998 Coll. The Constitutional Court, in its cited finding, concluded that the imposition of a minimum fine in the law essentially pursues a legitimate objective, since in a far more clear way than would be the case only when the upper rate is set, it makes it possible to distinguish the seriousness or danger of those types of infringement. The further impact of this step is that it limits the scope for the administrative discretion of the competent authorities, which has its positive consequences, for example, by unifying, to a certain extent, the level of the imposition of penalties, or by limiting the scope for arbitrary or corrupt acts of the administrative authorities. It may thus appear to be a means of protecting against possible discrimination, but on the other hand, the gravity of the infringement is more or less flat-rate, leading to a restriction on the possibility of an administrative authority to take into account the specific circumstances of the case, the person responsible for the offence and its circumstances.
5. The appellant considers that the conclusions of the Constitutional Court on the application of the principle of proportionality in the imposition of the sanctions referred to in the judgment of the Court of First Instance in Case 12 / 03 PúS 12 / 03 can also be relied upon by the provisions of Section 250 of the Tax Code, since that provision completely excludes the taking into account by the administrative authority of the seriousness and the consequences of the infringement, which is that the tax body has filed a late tax return. In the appellant's view, the strictly fixed rate places the administrative authority in a role where it merely calculates the amount of the penalty without having to consider the circumstances of a particular case.
6. The appellant also pointed out that, in its view, in the contested provision, there is a penalty for late payment of the tax and there is no reason to rely on the amount of the tax. While in cases of late payment alone it can be accepted that the amount of penalty payments or interest depends on the amount of late payment (even if it is not a penalty), where a tax entity is sanctioned for late submission of a tax return, the amount of the penalty according to the amount of tax on tax returns is lacking rational reasons. This is particularly true in situations where the administration is prevented from reflecting the specific circumstances of a particular case.
7. The current regulation, according to the appellant's contention, means, first, an intervention in the fundamental law under Article 11 of the Charter, the method of calculation allowing interference in the property ratios of an individual with considerable intensity in cases where it is a tax entity which, as a result of its economic activity, has a high tax liability from which a full mechanical penalty is calculated for late filing of a tax return. First, the constitutional right of equality of entities in their rights under Article 1 of the Charter is also undermined by the current regulation. The same breach of the statutory obligation - i.e. late filing of a tax return - will result in various penalties, whereby a tax entity with a lower tax liability will be penalised by a lower fine than a higher tax liability entity without any rational reason to justify the difference in the penalty of the same infringement. In the appellant's view, the fact that the lowest and highest sanctions are laid down does not eliminate that interference in equality of rights.
8. The appellant is of the opinion that, on the basis of the above-mentioned finding of the Constitutional Court, sp. zn. Pl. ÚS 12 / 03, it is in a procedural situation in which it is not in a position to establish for certain reasons the applicant's plea as to the breach of the principle of proportionality, according to which the tax administrator should take into account the exceptional situation of a tax entity and its legitimate interests in the exercise of its powers so that its practice is not disproportionate to it. The contested provision of Paragraph 250 of the Tax Code leads to a restriction on the possibility of an administrative authority to take account of the specific circumstances of the case, the person of the offender and his circumstances. Therefore, the appellant, pursuant to the provisions of § 48 (1) (a) of the Administrative Rules of Procedure, suspended the procedure by order of 7 October 2014 No 11Af 76 / 2011-54 in order to submit an application to the Constitutional Court pursuant to Article 95 (2) of the Constitution.
Proceedings before the Constitutional Court
9. The Constitutional Court, pursuant to Articles 42 (4) and 69 of the Law on the Constitutional Court, sent the application in question for the annulment of the contested provision to the Chamber of Deputies, the Senate, the Government and the Ombudsman.
10. The Chamber of Deputies, through its President Jan Hamáček, in accordance with established practice, limited itself in its statement of 30 December 2014 to a description of the course of the legislative process which led to the adoption of a law whose provision is proposed for annulment. The Chamber of Deputies stated that the draft law and its subsequent amendments were approved by the two chambers of Parliament, the law was signed by the relevant constitutional authorities and duly declared. It is for the Constitutional Court to examine the question of the inconstitutionality of the contested provision and to decide on the application for its annulment.
11. The Senate stated in its observations of 18 December 2014 through its President Milan Štěv that the provision of Section 250 of the Tax Code was approved on 22 July 2009 as part of Act No. 280 / 2009 Coll. The contested provision of § 250 of the Act, like the whole Act, came into effect on 1 January 2011. The Senate Plenum discussed the bill contained in Senate Press No. 132 at its 9th meeting on 22 July 2009. On the basis of the provisions of Section 250, none of the senators spoke. Two Senators proposed to approve the bill in the general debate, as referred to by the Chamber of Deputies, and the Senate adopted it after the debate, when 62 votes against 4 in vote 22 in the presence of 71 Senators in favour of the motion (resolution 240).
12. Paragraph 250 of the Tax Code was amended in Part Two in Articles III, paragraphs 54 and 55 of Act No. 458 / 2011 Coll., on the amendment of the laws related to the establishment of one collection post and other changes to tax and insurance laws. This law was passed on to the Senate on 22 November 2011. The Senate Plenum discussed the bill contained in Senate Press No. 240 at its 14th meeting on 8 December 2011. 13 senators have spoken to the press, some repeatedly. After a detailed debate by the Senate plenary, only the amendments by the guarantee committee were adopted and then, in vote 36, in the presence of 66 senators, 64 votes to one, resolution 435, on the basis of which the bill was returned with the approved amendments to the Chamber of Deputies.
13. Furthermore, the provision of Section 250 of the Tax Code was amended in Part Twelve of Article XXI of the Senate Law Act No 344 / 2013 Coll., on the amendment of tax laws in connection with the recdification of private law and on the amendment of certain laws. The Senate received the draft legislative measure in its 9th term since the Government on 25 September 2013. The Senate Plenum discussed the draft legal measure contained in Senate Press No. 184 at its 14th meeting on 10 October 2013. 14 senators have spoken to the press, some of them repeatedly. The debate in the general debate was conducted in particular on the necessity of adopting amendments to the Code of Law relating to the recdification of the Civil Code. After a detailed debate, the Senate adopted amendments and identified with the government the reasons for the necessity of a legal measure. In vote 22 in the presence of 62 senators, 55 votes in favour, no one opposed, the Senate approved the government proposal for a legislative measure as amended by the amendments adopted (Resolution 352). Finally, the Senate stated that it was up to the Constitutional Court to examine the matter and decide whether the contested provision would stand in the context of the constitutional order of the Czech Republic.
14. The Government informed the Constitutional Court on 29 December 2014 that it had discussed at its meeting on 22 December 2014 "the proposal for the entry of the Government of the Czech Republic into the proceedings before the Constitutional Court under the Pl. ÚS 24 / 14" and adopted Resolution No 1089 authorising the Government to enter the proceedings and imposing on the Minister for Human Rights, Equal Opportunities and Legislation Mgr. Jiří Dienstbier, in cooperation with the First Deputy Prime Minister and the Minister of Finance, on the proposal.
15. On 15 January 2015, the Government submitted to the Constitutional Court a comprehensive statement stating that it did not share the appellant's view. The Constitutional Court considers it appropriate to state the following from the observations submitted by the Government:
16. Institute of Fine for Late Claim Tax
[1] The penalty for late claims is the penalty for filing a tax return, reporting or billing after a specified period or for not submitting them at all. The fine arises directly from the law (ex-IT) at a set amount derived from tax, tax deduction or tax loss which is the subject of a late or unsubmitted tax claim. In particular, the fine is incurred at 0,05% of the tax or tax deduction, or 0,01% of the tax loss. The fine is partly a time penalty, i.e. the amount of the fine increases over time depending on the length of the delay in making the tax claim, but in certain cases the fine has a minimum and maximum limit. The maximum limit shall also apply if the tax claim is not lodged at all, even after the deadline set. The tax administrator shall communicate the fine to the tax entity by means of a payment scale (by declaratory decision) and shall prescribe it in the tax records. The fine shall be payable within 30 days of the date of notification of this notice of payment against which an appeal may be lodged, the filing of which shall not have suspensory effect.
[2] By its nature of the fine, the Institute replaced the tax increase, which was provided for in the provision of § 68 of Act No. 337 / 1992 Coll., on the administration of taxes and charges, according to which the tax administrator could (but did not have to), if the tax return or report was not submitted on time, the tax levied was increased by up to 10%. In other ways (e.g. by setting a minimum or a maximum level) this penalty was not limited. Whether the tax increase was imposed by the tax administrator depended on its administrative discretion, i.e. this penalty was not imposed automatically.
[3] On the other hand, the legislator in the new tax legislation effective since 2011 has chosen the route of sanctions imposed by the former, that is to say, a solution in the form of sanctions for breach of the obligation in a predictable and forward-looking manner which excludes the choice of the determining authority and reduces corruption potential.
17. Illegal and harmful infringement of the obligation to claim tax
[4] The fundamental characteristics of the conduct, which is sanctioned by administrative punishment, are both its illegality and its harmful effects. According to Article 1 (3) of Act No. 280 / 2009 Coll., Tax Code, the tax return, report or bill submitted by the tax entity is "the basis for the correct determination and determination of tax '. The correct determination and determination of taxes is the objective of tax administration, together with ensuring their reimbursement (see Section 1 (2) of Act No. 280 / 2009 Coll., Tax Code). The explanatory memorandum to the tax rules states that" in this respect, the objective of tax administration follows the meaning of the very existence of taxes, which is to ensure the financing of the public needs of the company, even though this is not explicitly provided for in the law. It is therefore a matter of ensuring the participation of an individual (tax entity) in the costs necessary for the effective functioning of the state apparatus and the provision of public services. It is therefore a matter of implementing a law or a law-based public budget revenue'.
[5] The adjustment of the fine for late tax claims is, inter alia, a consequence of the fact that tax administration is generally based on the principle that the tax entity has an obligation and burden of claim regarding its tax obligations. The duty of the claim lies in the duty to make a tax claim and to state the facts relevant to tax administration. The burden of the claim will be borne by the tax entity if the tax administrator becomes aware of the alleged facts, i.e. the tax entity will not only mention the necessary data in the tax claim, but also submit the tax claim to the tax administrator. Therefore, compliance with the claim obligation is essential to bear the burden of the claim. The explanatory memorandum to § 1 (3) of Act No. 280 / 2009 Coll., the Tax Code states: "The tax entity thus cooperates with the tax administrator in determining the tax liability, in particular by correctly stating the amount of tax which it is also obliged to pay. The tax administrator shall then submit this claim to a review which results in the acceptance of the claimed amount and a declaratory determination of the tax or a change in the claimed amount so that the resulting tax corresponds to the tax liability imposed by the law. 'Submission of the relevant tax claim properly and in a timely manner is therefore a key condition for the tax administration to be able to carry out or achieve its objective. Although the procedural arrangements for tax administration contain procedures that allow for the correct identification and determination of the tax even without synergies with the tax entity (typically if it is not possible to establish the tax on the basis of evidence, it is determined by the tax administrator on the basis of the aids provided for in § 98 of Act No. 280 / 2009 Coll., Tax Code), these are subsidiary procedures which are essentially starting only if the tax entity fails to fulfil its duty to claim the tax.
[6] The fine for the late claim of the tax pursues the failure to fulfil the very obligation of the tax claim imposed by the tax rules or other tax laws. This fulfills the element of illegality in the sanctioned conduct of the tax entity. On the contrary, if a tax entity fulfils the tax claim obligation, it is not decisive whether the tax was claimed correctly or whether the tax claimed subsequently has been paid (in these cases penalties in the form of periodic penalty payments or interest on late payments may be imposed on the fulfilment of other statutory conditions). Infringement of the obligation to claim a tax must necessarily be sanctioned by law, as otherwise the statutory obligation to claim a tax would be an imperfect standard. Moreover, the very existence of a penalty for breach of the obligation to properly claim the tax will not be contradicted by the appellant.
[7] As regards the harmful nature of the sanctioned conduct, this is the case where a breach of the statutory obligation leads to a threat to a certain public interest. In the present case, in view of the above, the fact that the tax claim is the basis for the correct determination and determination of the tax, it can be said that failure to fulfil the tax claim obligation should generally be regarded as a threat to the determination and determination of the tax itself and consequently to its remuneration, i.e. there is a threat to the objective of tax administration as such. Indeed, failure to fulfil the obligation to claim a tax is a normal formal manifestation of conduct which has the material character of concealing the facts relevant to tax administration, whether intentionally or negligently. The situation in which the tax administrator is forced to establish and establish a tax without any interaction with the tax entity is generally undesirable, despite cases such as the result of intentional tax evasion efforts.
[8] In the light of the above, a causal link can be established between the failure to fulfil the tax claim obligation and the consequence that the tax is not found, determined and paid, or that these steps are significantly hampered. According to the explanatory memorandum to the Tax Code, "the tax administration is also the result of cooperation between other persons, in particular tax entities, which, by carrying out their duties, substantially influence the success of the exercise of the tax law (tax liability, burden of proof) '.
[9] The second harmful consequence of non-compliance with the tax claim is the potential emergence of administrative costs associated with it. On the one hand, the tax administrator must detect this error (which may not be a simple matter in all cases), and then initiate a procedure to remove the undesirable situation (issuing a call under Section 145 of the Tax Code).
[10] In that context, the appellant is based on the assumption that the breach of the tax liability is formally always the same delicacy, regardless of the subject matter of the claim (late submission of the tax return is regarded as "an identical breach of the statutory obligation ', regardless of how high the tax liability which is the subject of the claim). That is not really the case. The duty of the tax claim is not" merely "a formal notification obligation or a less significant administrative requirement, but it is - as mentioned above - an essential element of tax administration on which the finding, determination and payment of the tax and thus the achievement of the tax administration objective are largely dependent. Proper cooperation between tax entities in claiming their tax liability is an essential element necessary for the functioning of the tax system. It is therefore logical that the consequence of the failure to fulfil the obligation to claim a tax in the form of a burden or a ban on the determination, determination and payment of a tax is by itself the seriousness and scope of its impact on legality, the proper exercise of public authority as well as on public budgets to a large extent dependent on the subject of the claim itself, namely the tax claimed above. It is evident that the non-submission of a tax return for higher tax liabilities in other similar cases has more serious consequences than the non-submission of a tax return for lower tax liabilities. Therefore, the imposition of a fine on the late claim of a tax on the amount of tax which is the subject of a late or no-filed tax claim was a rational measure by the legislator, which, inter alia, reflects the harmful (danger) nature of the criminal conduct.
[11] The same conclusion applies in the case of tax deductions, as the objective of tax administration is to establish correctly and determine the tax, regardless of whether the tax is positive or negative from the State's point of view. In both cases, it is of public interest that the rights and obligations of tax administration be built for sure at the statutory moment, the more the higher the cash performance.
[12] The appellant also takes account of the above fact that the amount of the fine for late claims is derived not only from the amount of tax, tax deduction or tax losses which are the subject of the claim but also includes a time element where the total amount of the fine increases with the length of the period during which the obligation to claim the tax is not fulfilled. Referring the amount of the fine to both the amount of the tax which is the subject of the claim and since the failure to fulfil the obligation to claim the tax is a logical consequence of the consistency of the two elements, the damage to which is increased over time and to the extent.
[13] The appellant's view that the formal identical conduct (failure to comply with the obligation of the claim) should be followed by the same penalty, regardless of the amount of tax, tax deduction or tax losses which are the subject of the claim, should therefore be rejected, with reference to the general principle of administrative and criminal law, according to which the seriousness of the offence committed is derived, inter alia, from the seriousness (actually or potentially) of the consequence. This consequence is then often quantified directly or indirectly in the assets or other values concerned and thus largely presupposes decisions by a public authority in a particular case. Contrary to a number of related circumstances that may affect the outcome of the assessment of a particular case (including the appellant's stressed consideration of the offender), the severity of the consequence in a number of cases is incorporated directly into the substance of the administrative offence or offence itself (typically in the case of qualified facts) or is derived from the dividing line between different types of offences. In practice, although these are formally identical negotiations (e.g. an offence of theft carried out in otherwise similar circumstances) in individual cases, the material value which has been affected by the sanctioned conduct is crucial to assess the seriousness of the conduct (and to determine the amount of the penalty). This also applies to non-compliance with the tax claim, the gravity of which corresponds in particular to the amount of the tax, the determination, determination and reimbursement of which have been made more difficult or impossible by failure to fulfil the obligation. If the appellant claims otherwise, it can be likened to "whether the perpetrator has stolen 1 crown or 1 million crowns, it is still a theft," using the above example of theft.
18. The circumstances of a particular case
[14] As regards the circumstances of the particular case following which the application was made to the Constitutional Court, it should be noted that it was in short a situation in which the tax authority submitted tax returns to the tax administrator electronically but not in some of the ways in which the tax rules provide for permissible forms of submission in Section 71 (1). In such cases, Act No. 280 / 2009 Coll., Tax Code, according to § 71 (3), is aware of the possibility of additional confirmation or repetition of the submission in any of the legal ways within 5 days, in which case the effects of the original submission are maintained. If the administration is not repeated or confirmed in this manner, it shall be viewed as if it had not been administered at all. However, the tax entity did not make use of the possibility of additional confirmation or re-submission and then submitted the tax returns belatedly to the tax administrator.
[15] That situation cannot be considered as a reason for establishing any minor seriousness of the infringement of the tax claim. The requirement to comply with the legal method of making submissions is the basis for any effective exercise of public authority and to ensure that all submissions against public authorities are truly an authentic expression of the will of the parties making them. This principle applies to all procedural rules within the framework of the legal order (administrative order, civil order, etc.). The possibility of maintaining the effects of the submission in the case of its confirmation or repetition pursuant to § 71 (3) of Act No. 280 / 2009 Coll., Tax Code, is also a general rule known both from the procedural arrangements used by the administrative authorities in general and the courts (see § 37 (4) of the Administrative Code or § 42 (2) of the Civil Code). At the same time, this is a form of benevolence towards the donors who have the possibility of remedying the inadequacy of the original submission. However, it is certainly not possible for a tax entity to make a submission in a way which is not known to the law and, at the same time, did not make use of the possibility of redress under Article 71 (3) of Act No 280 / 2009 Coll., the tax rules, to be considered as "mitigating circumstances' in the present case. Such a procedure would lead to the relativism of the regulation of filing not only in tax matters and to the weakening of respect for the need to fulfil fundamental legal obligations. At the same time, the validity of the principle" law belongs to the vigilant "would be weakened.
19. Alleged infringement of the right to own property and the principle of proportionality
[16] It can be accepted that sanctions for administrative offences and, therefore, for payment offenses should not be of a liquidation nature, i.e. should not constitute a disproportionate impact on the individual's property situation and therefore a breach of the right to own property pursuant to Article 11 (1) of the Charter. The law should therefore take into account the proportionality criterion (proportionality) when setting the parametric amount of the penalty.
[17] One of the legislative ways to suppress the winding-up nature of a penalty is to use the institution of moderation above the penalty on the basis of taking into account the specific circumstances of the sanctioned entity, that is to say, using the discrepancy in the decision of the administrative body imposing the penalty. This method is typical of administrative offences in a narrow sense. On the contrary, the absence of discrepancy in storage is typical of so-called payment offences. These offenses arise ex ante and are usually determined by a percentage (e.g. interest on late payments, periodic penalty payments).
[18] It cannot be borne in mind that the absence of a discrepancy in the determination of the amount of the penalty would automatically imply the liquidation nature of the penalty in question, or interference with the property ratios of an individual with unacceptable intensity. In such a case, ad absurdum would be liquidating virtually all penalties for payment offenders.
[19] The reasons why the legislature opted for an ex-ante penalty option based on a percentage of a given base, or a minimum or maximum fixed limit, are the following: (i) predictability and the underlying legal certainty; (ii) avoidance by the public authority; (iii) reduction of the risk of corruption; (iv) administrative management; (v) speed of management. The penalties imposed on tax administration are distinguished from other administrative offences by, inter alia, being imposed by the nature of the case in multiple times the number of cases which are repeated over a period of more currency. Therefore, the element of administrative manageability, which is closely linked to the need to ensure adequate steering speed, is significantly more relevant in the case of payment offenders than in the case of administrative offenders in general. In such cases, the creation of an ex ante penalty allows, inter alia, to involve a higher level of automation of their imposition with the tax administrator, without which the administration of such penalties is difficult to implement.
[20] Whether, in the case of a particular penalty, the option of imposing it by law or, on the contrary, using a discrepancy is largely a matter of legislative policy. "While there is no general rule for legislators, it should always be taken into account when deciding whether or not discretions may be necessary to take into account whether the risk associated with the necessary level of legal uncertainty resulting from the possibility of discretionary action is sufficiently balanced with the needs of administrative rationality and the ability of public administration to function. In doing so, the solution should be made on the basis of factual, rational considerations, at least taking into account the way in which the practice has worked. '(Mates, P. Place of discretion in administrative punishment. Legal perspectives No 22 / 2014, Prague, Publishing House C. H. Beck, s. r. o., p. 772).
[21] In the case of sanctions (payment offenses) which are normally provided for by the tax legislation, these are not firm sanctions in the true sense, but are penalties provided for by a certain percentage of the amount of cash transactions which are affected by the infringement in a particular case. Thus, in individual cases, the amount of the fine will be different, to a large extent depending on the intensity of the infringement, for which the extent of the cash performance covered by the infringement is crucial. This scope also reflects to a large extent the individual economic circumstances of the sanctioned entity that determine the extent of the cash performance, as the amount of tax liability (i.e. the tax to be claimed) is generally directly proportional to the economic activities of the tax entity or its assets.
[22] Thus, although the penalties for administrative misconduct in tax administration are generally not set in such a way as to give an individual review of the circumstances of the sanctioned entity in each individual case, the overall system setting of their construction includes a built-in "self-moderation" mechanism, where the amount of the penalty (i.e. in this case the percentage) is determined by the legislator directly in the law, taking into account the seriousness of the infringement and, to a large extent, the individual economic circumstances of the sanctioned entity.
[23] It is clear from the above that it is not possible to identify with the claim made in the proposal that, in extreme cases, there may be disproportionate interference in the property ratios of an individual when imposing a fine under Section 250 of the Tax Code. On the contrary, the fact that it is "measured by the same meter" contributes to a fair setting of the tax administration sanctions system.
20. The case law on the principle of proportionality of sanctions
[24] As regards the proposal cited in the case-law of the Constitutional Court, its conclusions on the case are only partially applicable. The Constitutional Court's finding, sp. zn. Pl. ÚS 12 / 03 cannot be applied without further action, for the following reason. In the case covered by this finding, this was a fixed lower limit of the fine which the competent administrative authority (or had to) could impose in the event of a breach of the obligations laid down, the possibility of moderation being given only in the form of an increase in the fine imposed. The nature of the case thus constituted a type of different penalty than that which is contested in the proposal. The same applies, for example, to the previous similar finding of the Constitutional Court of 13 August 2002 sp. zn.
[25] The Constitutional Court's finding of 25 October 2011 sp. zn. The arguments put forward by the Constitutional Court in this finding are rather indicative of the fact that, in specific cases, severe penalties by means of administrative punishment without the possibility of moderation cannot be regarded as a manifestation of excessive hardness. That finding literally states: "Constitutional rules do not require the legislature, when setting the penalty rate by law, to abandon the lower limit of the area of sanctions. The type of severity (damage) of the criminal conduct of a given species may generally be so high that it does not allow even in an individual case to determine the zero value of the penalty notice. The assessment of the lower limit of the penalty rate is essentially a matter for the legislator. The constitutional rules do not contain any directive on the lower limit issue - but the order for proportionality between the type of seriousness of the criminal conduct and the level of the penalty rate must be followed. 'The Constitutional Court also noted that by excluding discrepancy in administrative decisions," secondary positive results can also be achieved - that is, the limitation of the interpretative desire of police and administrative authorities in the practical application of regulations and the restriction of corruption in the imposition of sanctions'.
[26] Finally, reference should be made to the finding of the Constitutional Court of 15 October 2013 sp. zn. The Constitutional Court rejected the application for annulment of the penalty in question, which it justified, inter alia, by "failing to take account of the fact that the contested legal standard respects the requirement for differentiation of sanctions already by relying on the amount of the excess tax. From this point of view, it can be concluded with regard to the above-mentioned penalty that, as a result, it reflects the amount of funds moving in the trade in mineral oils, alcohol, beer, wine and intermediate products and tobacco products, which corresponds to the amount of tax which the tax entity is obliged to grant and pay... '. It follows from the above that the penalty derived from the amount of the tax liability to which the sanctioned misconduct relates generally contains a certain element of differentiation, which is able to make up to some extent for the absence of discretion in the event of an ex-penalty.
[27] The above findings of the Constitutional Court must be accepted in general. In the light of the above, it should be noted that the material form of the fine under Section 250 of the Tax Code is based on generally established legal principles and requirements of the company and is thus not contrary to them. In fact, the comparison of this fine with some of the fines which did not stand in the constitutional test carried out in those findings by the Constitutional Court is not to a large extent relevant, or the findings cited by the Constitutional Court are in fact indicative of the constitutional conformity of the penalties provided for in Article 250 of the Tax Code.
[28] Moreover, the requirement to differentiate between discretionary sanctions is not and cannot be absolute, nor has the Constitutional Court formulated such a requirement. In the case of some "traditional" sanctions, differentiation is not technically possible either (e.g. for some sanctions under Act No. 40 / 2009 Coll., Penal Code, as amended - "forfeiture of property" and "forfeiture of replacement value," or "loss of honorary titles," "loss of military rank" or "expulsion").
21. Elements of moderation and proportionality in the applicable fine adjustment
[29] However, it follows from the above that the existence of a fine resulting from the ex-IRS is not and priori contradictory to the principle of proportionality, which also applies to the fine for late claims, it should be stressed that the principle of proportionality plays an important role in adjusting the fine. Thus, the legislature gradually incorporated a relatively large number of moderation elements into the adjustment of this fine to ensure the proportionality of the penalty while maintaining the above-described positives of its formation directly from the law. Some of these elements can only be found uniquely in the case of a late claim fine compared to other penalties for payment offences. On a specific level, these are the following moderation elements, which generally pursue the aim of mitigating the penalty in cases where a specific error shows less harmful effects:
• "self-moderation" mechanism in percentage setting of the amount of the fine in proportion to the amount of tax to be claimed, i.e. a mechanism to some extent taking into account the economic circumstances of the tax entity (see above),
• the fact that the fine does not arise if the delay with the submission of the tax claim has not been longer than 5 working days - in this way there is a tolerance for bagging exceeding the deadline for establishing the tax, whose damage is relatively low;
• adjustment of the "grubbing-up 'amount of the fine, i.e. setting the maximum amount that the fine can achieve in a particular case (no more than 5% of the tax, tax deduction or tax loss, or no more than 0,5% of the total amount of tax which the tax payer was obliged to provide in the report or bill; at the same time, the fine must not exceed CZK 300,000) - this ensures that the resulting amount of the fine cannot be too high (non-portional) in comparison to the amount of the tax, both in terms of relative (percentage ceiling) and absolute (maximum amount),
• a stricter tax claim regime, which has not been made at all, compared with a late submission (Section 250 (4) of the Tax Code),
• the fact that the fine resulting from the late submission of the tax claim is not prescribed and the tax entity does not have an obligation to pay it if it reaches an amount of less than CZK 200 (Section 250 (3) of the Tax Code) - in this way again there is a tolerance for bagging errors, while reflecting the principle of economy and process economics;
• reduction of the amount of the fine by half for the fulfilment of the legal conditions (Section 250 (7) of the Tax Code) - this form of moderation has been introduced since 2014, starting in the event that the tax entity fulfils its obligation to lodge a tax claim within 30 days of the time limit for its submission and no other delay has been detected by the tax administrator at the time of the payment notice,
• a special rule for the fine for late assertion of tax on income tax on dependent activities (Section 38o of Act No. 586 / 1992 Coll., on income taxes, as amended) - this form of moderation has been introduced since 2015; is that if part of the income tax base on dependent activities on which the tax payer deducts the tax advance is more than 50% of the total tax base, the fine for the late claim of the tax on the personal income tax return shall be reduced to a tenth; In this way, the existence of an objective hardness of legislation was removed, where the fine for the breach of the tax liability by the tax entity was derived from the total amount of the income tax on individuals, although a greater part of that tax had already been paid by the taxable person on income from dependent activities, and thus materially, the tax entity had infringed the claim only in respect of tax on its income other than that of dependent activities (the removal of this hardness was, inter alia, requested by the Ombudsman in the past).
[30] The common feature of the above mentioned moderation elements is that they are demanding. If the conditions foreseen in the Act are met, the tax administrator will automatically take up moderation without having to ask for them to be taken into account. This makes them predictable and, at the same time, creates an incentive to remedy those tax entities that violate the tax claim.
[31] Another way of influencing the effects of the penalty on the tax entity, taking into account the individual situation, is the use of the possibility of the institution to delay or distribute the payment into instalments (cf. Section 156 et seq.). If the statutory conditions are fulfilled, the tax administrator may, at the request of the tax authority or by authority, allow the payment of the tax to be delayed or, where appropriate, to be split into instalments.
22. Alleged infringement of the principle of equality
[32] The fact that the fine for the late claim is based on the amount of the tax which is the subject of the claim also shows that it is a breach of the equality of tax entities in relation to how high their tax liability is. On the question of understanding of equality, for example, reference can be made to the finding of the Constitutional Court of 9 March 2004 sp. zn. Pl. ÚS 38 / 02 (N 36 / 32 SbNU 345; 299 / 2004 Sb.), according to which: "The Constitutional Court does not see equality as absolute but as relative (and moreover accessorial in relation to other fundamental rights and freedoms) '. As mentioned above, individual cases of infringement of the tax claim differ by their seriousness or consequences for achieving the objective of tax administration, in particular depending on the tax liability being the subject of the claim. It is not true that the fine derived from the tax claimed above discriminates against a part of the entities, since, above all, it is the tax claimed above that constitutes a serious error. These are not cases of similar characteristics such that the same amount of penalty should be applied. The Constitutional Court's finding of 15 October 2013 sp. zn. Thus, constitutional order also admits a statutory inequality if there are constitutionally acceptable reasons for doing so."
[33] From the point of view of ensuring equal and non-discriminatory access to tax entities, it is precisely the construction of a fine for late claims of tax as an ex-tax fine. This solution, by excluding the discrepancy, allows for the elimination of libel in the decision-making activities of the tax administrator, prevents possible corruption and makes the fine predictable and forward-determined (i.e. the fine fulfils the principle of legitimate expectations by tax entities). Thus, the adjustment of the fine strengthens the relative equality element of tax entities in a number of aspects, which is also contributed by the amount of legally guaranteed moderation elements, allowing the selected specific circumstances of individual infringements.
23. Impact of Deregation
[34] As regards the quantity of cases which would be affected by the possible derogation of the contested provision, pursuant to the provisions of § 71 (4) of Act No 182 / 1993 Coll., on the Constitutional Court, in general, the rights and obligations arising from legal relations arising before the repeal of the law of the Constitutional Court remain unaffected. According to paragraph 2 of the same paragraph, final decisions made on the basis of a legislative act which has been repealed shall generally remain unaffected; However, the rights and obligations under such decisions may not be exercised. Derogation of the legal provision should not be carried out with the effect of ex tunc while respecting these rules, as it would then be an expression of unacceptable genuine retroactivity.
[35] In the light of the above, the impact on a particular tax case would include (i) cases in which there has not been a final decision on the obligation to pay a fine for a late claim of tax, or that decision is subject to exceptional remedies and supervisory measures, or judicial review, as the case may be, and (ii) cases where a final decision has already been taken on the obligation to pay the fine but has not yet been paid.
[36] For the first group, the deregulation would be manifested in the impossibility of paying a fine, or in the illegality of a previously unjust decision to pay a fine. In the case of the second group, deregulation would mean the inenforceability of a decision on the obligation to pay a fine which has not yet been paid (in whole or in part). This would not only be the case where the delay in the payment of the fine is due to the inactivity of the tax administrator. The effects would also be reflected in cases where the execution procedure (typically wage cuts) takes place, or in cases of delay with payment of the fine. Ironically, the effect of the deregulation would have been positive for those who did not comply with the obligation to pay the fine properly and on time.
[37] The immediate financial consequences of the abolition of the levy on late tax claims cannot be accurately quantified for either of these groups of cases, but it can be estimated that this impact cannot be considered essential.
[38] The consequences of the abolition of the fine can be described as far more serious as the late assertion of a futuro tax. In particular, such abolition would lead to a deterioration of discipline in the long term in the fulfilment of the tax liability and to an increase in cases where this obligation is not fulfilled. This would be reflected in an undesirable increase in administration linked to the detection of cases where the tax was not claimed and subsequent redress. As a result, the objective of tax administration in the form of the correct identification and determination of the tax and its remuneration would be weakened in the long term. The abolition of the fine in question would also give a negative signal in relation to the general requirement that everyone fulfil their legal obligations properly and in a timely manner, as well as the weakening of the principle of "the law belongs to the vigilante '. Last but not least, the abolition of a fine for late tax claims would have a negative precedent for other sanctions under the entire legal order, which are imposed directly by law, and therefore a breach of legal certainty regarding the existing construction of most payment offenders.
[39] Derogation of the law or its provision by the Constitutional Court may be considered materially as a legislative step of its kind. Any amendment or repeal of legislation is by nature a certain interference in the legal certainty of the addressees of the legal regulation and in the stability of the rule of law, which is also the case for the derogation carried out by the Constitutional Court. In this case too, it is therefore necessary, among other things, to carry out a form of assessment of the legitimacy and intensity of the interest in amending the legislation by way of the deregulation of its provisions. In doing so, deregulation should be the last possible option to remedy any shortcomings of legislation, which should be applied only if it cannot be achieved otherwise, in particular through a constitutional interpretation of the provision.
24. Summary and conclusion
[40] Paragraph 250 of the Tax Code provides for a fine for late tax claims, which, in particular, is an incentive for early submission of tax claims without which effective tax administration is not possible. The appellant considers that the provision of Paragraph 250 of the Tax Code is contrary to the principle of proportionality in the imposition of sanctions, since the imposition of a fine by law results in the limitation of the possibility of the tax administrator taking into account the specific circumstances of the case, the person of the offender and his circumstances.
[41] The appellant's view must be rejected. The imposition of sanctions by law cannot generally be regarded as unconstitutional, especially where the amount of the penalty is established on a percentage basis, as is the case with the fine in question. The appellant erroneously considers that the late claim of the tax always shows the same seriousness, regardless of the amount of tax involved in the claim. Penalties arising directly from the law at a pre-determined level show predictability and the legal certainty involved, the avoidance by the public authority of the likes, the reduction in the risk of corruption, and the provision of administrative manageability and speed of management. The relevance of these grounds, and therefore the general admissibility of the fines provided for by the law, which the Constitutional Court has previously acknowledged. In addition, in the case of a fine for late claims, the law provides for a number of mitigating elements which, even when setting a fine by law, differentiate it according to the seriousness of the case (the fine does not arise in bagging cases, it is reduced to half under certain conditions, etc.).
[42] The solution chosen by the legislature in the case of the fine in question is not contrary to the prohibition of amicable or to the principle of equality and is in accordance with the basic principles of tax law expressed also in the case-law of the Constitutional Court, according to which "the constitutional principle of division of power (Article 2 (1) of the Constitution), as well as the constitutional definition of legislative power (Article 15 (1) of the Constitution) for legislators, there is a wide scope for decisions on the subject matter, extent and extent of taxes, fees and financial penalties' [see the find of 18 August 2004 sp.
[43] For the above reasons, the Government considers that the requirement to abolish Paragraph 250 of the Tax Code cannot be accepted.
25. The Ombudsman informed the Constitutional Court by letter dated 10 December 2014 that she would not use her right to intervene.
26. The Constitutional Court forwarded the observations received on the application to the appellant who did not submit a reply to them.
Conditions for the applicant's active legitimacy
27. The Constitutional Court first dealt with the applicant's active legitimacy to file an application for annulment of the contested provision. The subject matter of a formal discussion of such a proposal shall be the fulfilment of Article 95 (2) The Constitution, in the sense that it must be a law to be applied in the resolution of the case, i.e. the law or its provision which is proposed for annulment, is to be applied directly by the appellant in the resolution of a particular dispute. The Constitutional Court found this condition fulfilled as the appellant decides on the action against decisions of the Finance Directorate for the City of Prague of 21 October 2011 No 12887 / 11-1500- 106054, No 12888 / 11-1500- 106054 and No 12889 / 11-1500- 106054, which applied the contested tax rule.
Constitutional conformity of the legislative process of adopting the contested provision
28. The Constitutional Court is required, in accordance with the provisions of § 68 (2) of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended by Act No. 48 / 2002 Coll., in the procedure for the control of standards, to assess whether the contested law (its individual provision) has been adopted and issued within the limits of the Constitution established competence and by the constitutionally prescribed procedure.
29. It follows from the statement of the constitutional complaint received by the Constitutional Court by the Chamber of Deputies that Law No 280 / 2009 Coll. was discussed in the Chamber of Deputies as Press No. 685 (Government proposal) at first reading on 29 April 2009 and was ordered to the Budget and Control Committee. The Committee on Budgets discussed the draft law on 3 June 2009 (resolution contained in print No 685 / 1). The Audit Committee discussed the draft law on 27 May 2009 (resolution contained in print No 685 / 2). The second reading of the draft law took place on 12 June 2009 and the amendments were processed as printing No 685 / 3. The third reading of the draft law took place on 17 June 2009, the draft law was approved by the Chamber of Deputies as amended.
30. Act No. 280 / 2009 Coll. of the Senate was referred by the Chamber of Deputies as draft law on 7 July 2009 and the provision of § 250 was approved on 22 July 2009. The President of the Republic signed the Act on 11 August 2009 and the Act was published on 3 September 2009 in the Collection of Laws in the amount of 87 under the number 280 / 2009 Coll.
31. Paragraph 250 of the Tax Code was amended in Part Two in Article III, paragraphs 54 and 55 of Act No. 458 / 2011 Coll. The bill was passed by the Chamber of Deputies on 9 November 2011, the Senate discussed the proposal at the 14th Senate meeting on 8 December 2011 and returned it to the Chamber of Deputies with amendments. The Chamber of Deputies adopted the Act at its 32nd meeting on 20 December 2011. The President of the Republic signed the Act on 27 December 2011 and the Act was published on 30 December 2011 in the Collection of Laws in the amount 158 under the number 458 / 2011 Coll.
32. Furthermore, the provision of Section 250 of the Tax Code was amended in Part Twelve of Article XXI of the Senate Law Act No 344 / 2013 Coll. The Government referred the draft legislative measure to the Senate on 25 September 2009. The Senate approved the legal measure on 10 October 2013 and returned the press to the Chamber of Deputies on 16 October 2013 to complete the legislative process. The President of the Republic signed the legal measure on 17 October 2013 and was published on 5 November 2013 in the Collection of Laws in the amount of 134 under the number 344 / 2013 Coll. The Chamber of Deputies approved the legal measure at its meeting on 27 November 2013. The resolution of the Chamber of Deputies was published on 29 November 2013 in the Collection of Laws in the amount of 150 under the number 382 / 2013 Coll.
33. The Constitutional Court has verified that the law and its subsequent amendments were adopted by a constitutional procedure, signed by the relevant constitutional authorities and duly declared.
Text of the contested provision
34. The contested provision of Paragraph 250 of the Tax Code originally amended until 31 December 2012 was as follows:
"Fines for late claims
(1) There is an obligation on a tax entity to pay a fine if it does not submit a tax return or an additional tax return, although it has had that obligation, or if it does so after a specified time limit, and this delay is more than 5 working days,
(a) 0,05% of the tax fixed for each subsequent day of delay, but not more than 5% of the tax fixed,
(b) 0,05% of the tax deduction fixed for each subsequent day of delay, but not more than 5% of the tax deduction fixed; or
(c) 0,01% of the tax loss determined for each subsequent day of delay, but not more than 5% of the tax loss determined.
(2) The tax payers are obliged to pay the fine if they do not report, bill, subsequent report or additional bill, although they had this obligation, or if they do so after the prescribed time limit, and this delay is more than 5 working days, equal to 0,05% of the total amount of tax which they were required to report or account for each subsequent day of delay, but not more than 0,5% of the total amount of tax which they were obliged to report or account.
(3) If the amount calculated in accordance with paragraph 1 or 2 is less than CZK 500, the amount of the fine for late claims shall be CZK 500.
(4) The maximum amount calculated in accordance with paragraph 1 or 2 must not exceed CZK 300,000.
(5) The tax administrator shall decide on the obligation to pay the fine by means of payment and shall prescribe it in the tax records at the same time. The fine shall be payable within 30 days of the date of notification of the payment notice. ';
35. Act No. 458 / 2011 Coll. amended with effect from 1 January 2013 the provision of Paragraph 250 (3) by:
"(3) The fine for late claims of a tax resulting from late submission of a sound tax claim or additional tax claim shall not be imposed and shall not be payable to the tax authority if the amount calculated in accordance with paragraph 1 or 2 is less than CZK 200. '
A new paragraph 4 was inserted after paragraph 3:
"(4) Where a tax entity does not submit a sound tax claim or additional tax claim, even though it had this obligation, and does not do so subsequently for the duration of such claim, the specified upper limit shall be used in the calculation of the amount referred to in paragraph 1 or 2; the amount of the fine for late claims in this case is at least 500 CZK. '
Paragraphs 4 and 5 have been renumbered paragraphs 5 and 6.
36. The statutory measure of the Senate No. 344 / 2013 Coll. was supplemented by paragraph 7 of Section 250 of Part Twelve of Article XXI of Article 116, with effect from 1 January 2014:
"(7) The amount of the fine for the late claim of the tax shall be half if:
(a) the tax entity shall submit a proper tax claim or additional tax claim within 30 days of the futile expiry of the period for its submission; and
(b) in a given calendar year, no other delay has been identified with the tax authority at the time of issue of the payment notice in the submission of a sound tax claim or an additional tax claim. "
37. The contested provision of Paragraph 250 of the Tax Code, in force on the date of adoption of this finding, which the appellant proposes to abolish, reads as follows:
"(1) A tax entity shall be obliged to pay a fine if it does not submit a tax return or an additional tax return, although it has had such an obligation, or if it does so after a specified period, and this delay is more than five working days, amounting to:
(a) 0,05% of the tax fixed for each subsequent day of delay, but not more than 5% of the tax fixed,
(b) 0,05% of the tax deduction fixed for each subsequent day of delay, but not more than 5% of the tax deduction fixed; or
(c) 0,01% of the tax loss determined for each subsequent day of delay, but not more than 5% of the tax loss determined.
(2) The tax payers are obliged to pay the fine if they do not report, bill, subsequent report or additional bill, although they had this obligation, or if they do so after the prescribed time limit, and this delay is more than 5 working days, equal to 0,05% of the total amount of tax which they were required to report or account for each subsequent day of delay, but not more than 0,5% of the total amount of tax which they were obliged to report or account.
(3) The fine for late claims of a tax resulting from late submission of a sound tax claim or additional tax claim shall not be imposed and shall not be payable to the tax authority if the amount calculated in accordance with paragraph 1 or 2 is less than CZK 200.
(4) Where a tax entity does not submit a sound tax claim or additional tax claim, even though it had this obligation, and does not do so subsequently for the duration of such claim, the specified upper limit shall be used in the calculation of the amount referred to in paragraph 1 or 2; the amount of the fine for late claims in this case is at least 500 CZK.
(5) The maximum amount calculated in accordance with paragraph 1 or 2 must not exceed CZK 300,000.
(6) The tax administrator shall decide on the obligation to pay the fine by means of payment and shall prescribe it in the tax records at the same time. The fine shall be payable within 30 days of the date of notification of the payment notice.
(7) The amount of the fine for the late claim of the tax shall be half if:
(a) the tax entity shall submit a proper tax claim or additional tax claim within 30 days of the futile expiry of the period for its submission; and
(b) in a given calendar year, no other delay has been identified with the tax authority at the time of issue of the payment notice in the submission of a sound tax claim or an additional tax claim. "
Abandonment of oral proceedings
38. The Constitutional Court noted that oral proceedings could not lead to a significant step forward in clarifying the case than those resulting from written acts of the parties. In the light of the provisions of § 44 of Act No. 182 / 1993 Coll., on the Constitutional Court, as amended, including Act No. 404 / 2012 Coll., there is no need to ask the parties on their position on this issue, so it was possible to decide without the oral hearing.
Background to the review of the contested provision
39. The appellant seeks the annulment of the provisions of Section 250 of Act No. 280 / 2009 Coll., as amended, as it considers that the contested provision limits the scope for the administrative discretion of the competent authority in imposing a fine, the seriousness of the illegality of the conduct is flat-rate and it is not possible to take into account the circumstances of each case in accordance with the principle of proportionality in the imposition of penalties. Therefore, in the view of the appellant, the conclusions of the Constitutional Court, as expressed in the decision of sp. zn. The contested provision, according to the appellant's contention, also infringes the constitutional right of equality of entities as set out in Article 1 of the Charter and that provision interferes with the property ratios of an individual with considerable intensity by violating the fundamental right to the protection of property enshrined in Article 11 of the Charter.
40. The contested provision imposes an obligation on a taxable person to pay a fine if he does not submit a tax return or an additional tax return if he has had such an obligation and has not complied with it within the prescribed time limit and the delay is more than five days.
41. Article 1 (1) The Czech Republic is a democratic legal state based on respect for the rights and freedoms of man and citizen. On the basis of the principle of the rule of law, the basic rules governing the functioning of State power, including the principle of proportionality. This principle is based on the premise that intervention in fundamental rights or freedoms, even if not provided for in their constitutional arrangements, may occur in the event of a collision between them or in the event of a collision with another constitutionally protected value which is not the nature of the fundamental right and freedom (public good) [cf. the finding of the Constitutional Court of 9 October 1996 sp. zl. ÚS 15 / 96 (N 99 / 6 SbNU 213; 280 / 1996 Coll.)]. In the case of taxes, it is therefore an assessment of the limitation of the fundamental right to property guaranteed by Article 11 (1) of the Charter on grounds of public interest to the implementation of the State budget and of Article 11 (5) of the Charter, for purposes related to the fulfilment of the functions of the State.
42. The Constitutional Court of the CSFR, in a decision of 8 October 1992, sp. zn. Pl. ÚS 22 / 92 (Found No 11 of the Reports of the resolutions and findings of the Constitutional Court of the CSFR, commented on the constitutionality of the legislation on taxes, fees and other similar statutory benefits. Praha: Linde Praha, a. s., 2011, p. 49), which set out the aspects of the review of tax equality or tax proportionality. The Constitutional Court examined the constitutionality of the legal regulation of the tax, the fee, or other similar statutory compulsory benefits, of 9 March 2004 sp. zn. Pl.
43. In order to apply an appropriate methodology for the examination of the constitutionality of the statutory regulation of the tax, the levy, or other similar statutory compulsory benefits, as well as the financial penalties, the Constitutional Court stated in its decision of 18 August 2004 sp. zn. In particular, the Constitutional Court noted in that decision that "the constitutional review of the tax, the levy and the pecuniary penalties, in addition to the maximum exclusion of extreme disproportionality, also included an assessment of compliance with the courts arising from the constitutional principle of equality, both non-accesorial (Article 1 of the Charter), i.e. the requirement to exclude arbitrage in the distinction between entities and rights, as well as an action in the scope of Article 3 (1) of the Charter '.
44. The purpose and purpose of the fine in question cannot be ignored. The Constitutional Court has previously stated that it cannot, by its judgment on the appropriateness of public policies, replace the judgment of the democratically elected legislator, who has wide discretion in the field of public policies and also bears political responsibility for the possible failure of the chosen solution. In other words, the legislator may also take irrational action in tax matters, which is not yet a reason to intervene by the Constitutional Court. It will only intervene if ownership is restricted to the intensity of the so-called choking effect, or if there is a breach of the principle of equality in its accesoric (here following other fundamental rights) or non-accesoric form.
45. The Constitutional Court further verified how the issue of fines for late tax claims is dealt with in foreign legislation. In most Member States of the European Union, penalties are fixed or percentage-fixed in similar cases.
Self-examination of the contested provision
46. In relation to the laws governing economic issues (taxes, public support, regulation of economic activity), the Constitutional Court has already expressed itself in the past in favour of maintaining the maximum degree of restraint. In examining the constitutionality of the contested provision, the Constitutional Court based its case-law (paragraph 42 above), from which it did not depart. The proposal is not justified as regards the alleged unconstitutionality of the contested provision.
47. The Charter governs the right to own property, whereby, pursuant to paragraph 5 of this Article, taxes and charges may only be imposed by law. The appellant may be accused of having an impact on the ownership sphere of a person due to the withdrawal of part of the funds which would otherwise remain the property of that person. In the decision of 21 April 2009 sp. zn. The Constitutional Court stated that the constitutional principle of division of power (Article 2 (1) of the Constitution) and the constitutional definition of legislative power (Article 15 (1) of the Constitution) resulted in a relatively wide scope for legislators to decide on the subject matter, extent and extent of taxes in order to ensure the purpose of the tax or charge, which is primarily the security of State budget revenue. Although the level of the state's lawful decision on the subject matter, scope and scope of taxation is in principle very broad, it is nevertheless not unlimited, as the protection of the property right guaranteed by Article 11 (1) of the Charter must be taken into account when imposing taxes and charges. This consideration applies, of course, to the current review of the issue of the constitutionality of the regulation of the fine for late filing of a tax return or non-filing of a tax return.
48. The Constitutional Court recalls that Article 1 of the Additional Protocol to the Convention on the Protection of Human Rights and Fundamental Freedoms ("the Convention ') also protects the right of ownership, according to which any natural or legal person has the right to use his property peacefully. However, even under the Convention, ownership is not an absolute right since Article 1 of the Additional Protocol to the Convention allows, under certain conditions, the disposal of property (paragraph 1) and in its second paragraph, the contracting States to adopt laws which they consider necessary in order to regulate the use of property in accordance with the general interest and to ensure the payment of taxes. In order to be required to pay tax in accordance with the Convention, it must pursue a general interest; However, states are free to define what they consider necessary. According to the European Court of Human Rights, tax collection, other than in the case of a discriminatory tax regime, may infringe Article 1 of the Additional Protocol only if it places an unbearable burden on the person concerned or breaks up his financial situation. In view of the wording of the Convention, the European Court of Human Rights assesses taxes only from the point of view of the bail-outs arising from accesorial equality (Article 14 of the Convention), not from the point of view of equality before the law.
49. The Constitutional Court, when assessing whether an intervention in the fundamental right to own property took place in accordance with Article 11 (1) of the Charter, normally assesses, first and foremost, whether this was done on the basis of the law and within its limits. If these conditions are met, it shall examine whether the measure in question pursues the legitimate (constitutionally and discussed) objective of its limitation and, if so, whether the measure is appropriate to achieve that objective (requirement of suitability), whether it cannot be achieved in another way which would be more appropriate to the fundamental law (requirement of necessity) concerned, and, finally, whether the interest in achieving that objective in a particular legal relationship outweighs the fundamental law (proportionality in the narrower sense).
50. Respect for the rights and freedoms of an individual is undoubtedly one of the principles of the rule of law, as it means the preamble to the Constitution, which can be derived from one of the fundamental rules governing the functioning of State power, which is the principle of proportionality (proportionality) and the prohibition of abuse of law, as the Constitutional Court (cf. the finding of 13 August 2002 sp. zl. This principle is based on the premise that intervention in fundamental rights or freedoms, even if not provided for in their constitutional arrangements, may take place in the event of a mutual collision or in the event of a collision with another constitutionally protected value which is not the nature of fundamental rights and freedoms (public good). However, in these cases, the purpose (s) of such intervention must always be assessed in relation to the resources used, the criterion for this assessment being the principle of proportionality (proportionality in the wider sense), which may also be called a ban on excessive interference with rights and freedoms. This general principle includes three principles or criteria for assessing the admissibility of intervention. The first is the principle of eligibility for purpose (or suitability), according to which the relevant measure must be able at all to achieve the intended objective of protecting another fundamental right or public good. There is also the principle of necessity, according to which the use of only the most gentle - in relation to the fundamental rights and freedoms concerned - is permitted by several possible means. The third principle is the principle of proportionality (in the narrower sense), according to which the damage to fundamental law must not be disproportionate in relation to the intended objective, i.e. measures limiting fundamental human rights and freedoms must not, if there is a conflict of fundamental right or freedom with the public interest, exceed, by its negative consequences, the positive effects which constitute a public interest in those measures. This point is based on consideration of empirical, systemic, context and value arguments. The empirical argument can be understood to be the factual seriousness of a phenomenon which is linked to the protection of a particular fundamental right; a systemic argument means considering the meaning and including the fundamental right or freedom in question in the system of fundamental rights and freedoms. The context argument can be understood as a further negative impact on the limitation of one fundamental right due to the preference of another; the value argument represents consideration of the positive effects in the conflict of standing fundamental rights due to the accepted hierarchy of values.
51. In accordance with the above-mentioned conclusions, the Constitutional Court first examined whether that intervention in the legal sphere of the individual could be considered as an intervention in the constitutional rights and freedoms guaranteed. The fines as constitutionally permissible withdrawal of assets - unlike taxes and charges - are not explicitly mentioned in Article 11 of the Charter. However, the situation is somewhat different in the case of the regulation of the protection of property rights under Article 1 of the Additional Protocol to the Convention, according to which States may adopt laws which they consider necessary to regulate the use of property in accordance with the general interest and to ensure the payment of taxes and other charges or fines. From the above, it can be concluded that fines, as well as taxes and charges, fall within the scope of the legal regulation of Article 11 of the Charter and Article 1 of the Additional Protocol to the Convention and constitute, in principle, a permissible interference in the property rights of an individual, which is, however, subject to compliance with the principles of the rule of law (see Article 4 (4) of the Charter). In addition, it should be noted that the fine can be considered an intervention with the constitutional legal dimension if it interferes with the property situation of an individual with considerable intensity. This factor will be addressed by the Constitutional Court in the context of the application of the principle of proportionality.
52. As mentioned above, the purpose of the legislation in question was to impose a penalty on the filing of a tax return, a report or a bill after a specified period of time or not at all, the purpose of which is to ensure the financing of the company's public needs. The correct determination and determination of taxes is then the aim of tax administration, along with ensuring their payment. Illegal and, in its substance, harmful conduct in the case under examination is sanctioned by law in a way that "does not pay '. That intervention is thus capable of fulfilling the principle (criterion) of eligibility as it leads to the intended objective.
53. As regards the other criterion, which is the principle of necessity, the Constitutional Court may state that the intervention is in full compliance with that principle, as it is implemented on the basis of the law established by the public budget revenue. In the opinion of the Constitutional Court, such a measure is necessary in order to ensure the effective functioning of the State apparatus and public services. While the fine in question thus constitutes an intervention in constitutionally guaranteed rights and freedoms, namely property law, but not reaching a constitutional legal level.
54. The question remains whether it is an intervention that interferes in property relations with considerable intensity, with the degree of injury caused by this intervention being precisely one of the aspects of that principle of proportionality. The basic criterion on which the Constitutional Court is of the view is the so-called principle of substance, according to which not every withdrawal of property on the basis of fines, or fees and taxes, constitutes an intervention in property rights, but only one which fundamentally changes the property relationship of the entity concerned, i.e. by changing its overall ownership position by "destroying 'the very substance of the property. In a particular case, it should be assumed that, according to the provisions of § 1 (3) of Act No. 280 / 2009 Coll., the Tax Code, the tax return, report or bill submitted by the tax entity" is the basis for the correct determination and determination of tax', is therefore a necessary element for the functioning of the tax system. In addition, it should be recalled that tax administration is generally based on the principle that the tax entity has an obligation and burden of claim regarding its tax obligations. In other words, fines of a liquidation nature are inadmissible. Where the amount of the fine for the late claim is linked to the taxpayer and derived from the amount of tax (on the basis of economic activity) which is the subject of the claim and from the time of the failure to fulfil the obligation to claim the tax, namely from the intensity of the infringement and, moreover, limited to the maximum threshold, it cannot be concluded that it does not constitute such an intensive interference in the property situation as to impose an intolerable burden on the entity concerned. From the point of view of constitutionally guaranteed rights and freedoms, the alleged intervention corresponds to the principle (criterion) of proportionality.
55. It is indisputable that the collection of taxes should be predictable and the penalties for administrative offences, including payment offences, should not be of a liquidation nature. In the case under consideration, sanctions are incurred at an ex-ante level derived from a particular basis, for reasons of predictability and related legal certainty, avoidance by the public authority, reduction of the risk of corruption, administrative management (automation of their imposition with the tax administrator) and speed of management. Whether, in the case of a specific penalty, the option of imposing it by law or, on the contrary, using a discretionary procedure is largely a matter of legislative policy. The amount of the penalty for the offence, in a particular case for filing the tax return with the tax administrator electronically, but not in some of the ways the tax rules foresee as acceptable forms of filing in Paragraph 71 (1), where the tax entity did not use the possibility of additional confirmation or re-filing and submitted the tax returns belatedly to the tax administrator's request, is directly proportional to the economic activities of the tax entity, or its assets, and contains a certain element of differentiation which is able to compensate to some extent for the absence of discretion in the event of the creation of an ex-litre penalty [cf.
56. The Constitutional Court takes the view that the amount of the penalty (the percentage determined by the legislator directly in the law) takes into account the gravity of the infringement and, to a large extent, the individual economic circumstances of the sanctioned entity. It is clear that the measure is proportionate to the intended objective. The sanctioning of the infringement is made in a predictable and forward-looking manner, which excludes the choice of the determining authority, and it is entirely up to a particular tax entity to fulfil the obligation and burden of claims concerning its tax obligations, to what extent it will be affected by its property sector and to what extent it will be implemented on the basis of a statutory public budget revenue. Therefore, the claim made in the proposal that, in the case at issue, the extreme case may lead to disproportionate interference with the individual's property ratios cannot be accepted.
57. It should be recalled at this point that the legislator incorporated in the regulation of the fine in question a relatively large number of moderation elements to ensure the proportionality of the sanction and pursue the objective of mitigating the penalty in cases where the specific misconduct shows a lesser degree of harm, as pointed out by the Government in its observations. This is in particular an "automatic moderation 'mechanism in percentage setting of the amount of the fine; the absence of a fine if the delay with the submission of the tax claim was not more than 5 working days; adjustment of the" grating' amount of the fine; a stricter tax claim regime which has not been made; lower limit of fine from 200 CZK; reduction of the amount of the fine to half for compliance with the legal conditions and a special rule for the fine for late claims on the income tax on dependent activities.
58. In addition, it can be noted that the principles applied in the Plenary Found sp. zn.
59. On the contrary, the Constitutional Court did not consider a minimum fine of CZK 25 000 in accordance with the Act on Infringements to be liquidation and rejected the proposal for its annulment in the decision of 25 October 2011 sp. pl. ÚS 14 / 09 (N 183 / 63 CollNU 117; 22 / 2012 Coll.) concerning the fine and other penalties for infringement of road traffic rules (criminal and administrative penalties). The Constitutional Court concluded that the contested rule respects the requirement for differentiation of sanctions and that the assessment of the lower limit of the penalty rate is essentially a matter for the legislator. He stated that the constitutional regulations do not contain any directive on the lower limit issue, but the order for proportionality between the type of seriousness of the criminal conduct and the level of the penalty rate must be respected.
60. The question of fines and tax obligations was also addressed by the Constitutional Court in the already cited negative finding sp. v. Pl. ÚS 3 / 13 (the fine of 10% on the provision of tax on excess excise duty). In it he rejected the proposal of the Regional Court to abolish Article 43 of Act No 353 / 2003 Coll., on excise duties, as amended, with the fact that the legal possibility of payment by the customs office of payment of the tax on the security of the tax as a substitute for the performance in the event that the tax entity did not pay the excise duty properly and in a timely manner does not lead to a conflict with Articles 1 and 11 of the Charter. The Constitutional Court took into account that the standard already respects the requirement for differentiation of sanctions by relying on the amount of the excise surcharge imposed. It thus reflects the amount of funds moving in the trade in mineral oils, alcohol, beer, wine and intermediate products and tobacco products, which corresponds to the amount of tax which the tax entity is obliged to grant and pay, and consequently the amount of security of the tax on which the fine is derived. The Constitutional Court concluded that such a fine could not be liquidation for tax entities moving in the business of strictly regulated commodities.
61. The Constitutional Court compared the finding of 10 March 2004, sp. zn. Pl. ÚS 12 / 03, to which the appellant pointed out. In this finding, the Constitutional Court stated that the fine imposed in the building procedure may, under certain circumstances, constitute an interference with the fundamental law referred to in Article 11 (1) of the Charter if it interferes in the property situation of an individual with considerable intensity. The introduction of a minimum amount of the fine into the building law leads to a restriction on the possibility of an administrative authority to take into account the specific circumstances of the case, the person of the offender and his circumstances, and thus does not always allow for an appropriate intervention and may have the character of liquidation in relation to entities subject to penalties in the form of fines.
62. The starting point was for him the conclusions set out in the finding of 13 August 2002, sp. zn. The Constitutional Court, in its decision of 13 August 2002, sp. zn. The further impact of this step is also that it limits the scope for administrative discretion, which has its positive consequences, for example, by unifying, to a certain extent, the amount of penalties imposed or, where appropriate, the scope for arbitrary or corruption affected by administrative action. It may thus appear to be a means of protecting against possible discrimination, but on the other hand, the gravity of the infringement is more or less flat-rate, leading to a restriction on the possibility of an administrative authority to take into account the specific circumstances of the case, the person responsible for the offence and its circumstances. However, such a fine may, in certain circumstances, constitute an intervention, in particular, in the fundamental law referred to in Article 11 (1) of the Charter, in so far as it affects the property situation of an individual with considerable intensity. The Constitutional Court therefore assessed the purpose of the intervention in relation to the resources used, the proportionality principle being the criterion for this assessment. In the view of the Constitutional Court, the degree of repression represented by the increase in the upper limit of the penalty may fulfil the intended objective and, in view of the sufficient scope for taking into account the circumstances of a particular case, also allows for compliance with the condition of proportionality of the intervention. The determination and increase of the lower limit of the penalty minimising this area does not, of course, allow an appropriate intervention to be applied at all times, as it may sometimes have the character of liquidation in relation to entities subject to penalties in the form of fines.
63. The Constitutional Court also relied on the same reasoning in the finding of 10 March 2004, Pl. ÚS 12 / 03, in which it stated that the fine for the failure to complete urgent security works may in many individual cases be as liquidating as the fine of CZK 500,000 for offences by a legislator rated "more serious" as defined in Section 106 (3) of the Building Act.
64. At the level of the difference in fact between the current proposal and the proposal that was responded to by the finding of the sp. zn. Pl. ÚS 12 / 03, the fact that in the earlier finding the situation arose from the inability of the Children's and Youth Fund, which was in liquidation, to comply with an investment action that caused extremely adverse weather. In the present case, it is a public limited company which, according to the Finance Directorate for the City of Prague, did not submit the value added tax within the time limit specified by Act No. 235 / 2004 Coll., as amended, and according to the tax rules, did not submit the value added tax return for February, March and April 2011, even through the tax portal without subsequent confirmation (the applicant states that the applicant merely failed to confirm the tax return in writing through the postal operator in due time.)
65. In legal terms, there is a certain difference in the fact that the construction law provided for a one-off fine for the implementation or absence of an act which is not necessarily time-bound (non-maintenance, unannounced use of the construction, etc.). The purpose and purpose of the fine in question under the tax rules is to impose a penalty for failure to comply with a time limit which increases with a time delay from the legally foreseen time limit and thus reflects to some extent the intensity of the infringement. On the contrary, the Constitutional Court considers that the system of sanctions imposed directly by law in the case under consideration contributes to a fair setting of the system.
66. The Constitutional Court notes that the appellant's reference to the finding in point sp. zn. In particular, it cannot be considered as comparable the basis of the situation where the construction office imposed a fine in the construction procedure as the completion of urgent security work and the lower limit of the fine could not be determined by the administrative authority according to specific conditions and property ratios of the person. In the case at hand, the fine for late claims is imposed in the context of failure to properly submit the tax return, the amount of which is derived from the amount of tax paid, increases over time depending on the length of the delay in making the tax claim and has a minimum and maximum limit in case the tax claim is not made at all, even after the deadline. Thus, the fine arises directly from the law (ex-tax) at a set amount derived from tax, tax deduction or tax loss which is the subject of a late or unsubmitted tax claim.
67. Nor could the Constitutional Court agree with the appellant's claim that the principle of equality of tax entities has been infringed, on the ground that the fine for late assertion of the tax is based on the amount of tax which is the subject of the claim. It should be stressed that "not every unequal treatment of different entities can be classified as a breach of the principle of equality, i.e. as unlawful discrimination against one entity compared with other. In order for the infringement to take place, several conditions must be met: various entities in the same or comparable situation are treated differently without having objective and reasonable grounds for the different approach applied" [finding of 10 July 2014 sp. zn. Therefore, the Constitutional Court refers at this point to the content of the Government's statement that equal and non-discriminatory access to tax entities in the case of a fine arising from ex-IDS allows for the elimination of libel in the decision-making activities of the tax administrator, makes the fine predictable and forward-looking and prevents possible corruption, thereby strengthening the element of relative equality between tax entities.
68. On the basis of these findings, the Constitutional Court considers in the present case that the contested provision is compatible with the principles of the rule of law within the meaning of Article 1 of the Constitution and does not constitute a contradiction with Articles 1 and 11 (1) and (5) of the Charter and Article 1 of the Additional Protocol to the Convention.
69. The Constitutional Court therefore concludes that no grounds were found to comply with the application for annulment of § 250 of the Tax Code and therefore rejected the application as unfounded pursuant to § 70 (2) of Act No 182 / 1993 Coll., on the Constitutional Court.
President of the Constitutional Court:
JUDr. Rychetský v. r.
Sign in for notes, favorites and notifications
Regulation Information
| Citation | The Constitutional Court found no 187 / 2015 Coll., on the application for annulment of § 250 of Act No. 280 / 2009 Coll., Tax Code, as amended |
|---|---|
| Regulation Type | The Constitutional Tribunal found |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 03.08.2015 |
|---|---|
| Effective from | - |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
Comments 0