Found at the Constitutional Court of the Czech Republic No. 265 / 1995 Coll.
The finding of the Constitutional Court of the Czech Republic of 11 October 1995 on the application for annulment of Sections 2 (i), 33 and 33a of the Act of the Czech National Council No 587 / 1992 Coll., on excise duties, as amended, and points 2, 3, 4, 5 and 6 of Article II of the Act No. 260 / 1994 Coll., amending and supplementing the Act of the Czech National Council No 587 / 1992 Coll., on excise duties, as amended
Valid
The Constitutional Tribunal found
Text versions:
17.11.1995
265
FIND
Constitutional Court of the Czech Republic
On behalf of the Czech Republic
The Constitutional Court of the Czech Republic decided on 11 October 1995 in plenary on the proposal of the President of the Republic to abolish:
1. § 2 (i), part of § 33 concerning small independent breweries pursuant to § 2 (i) and § 33a of the Czech National Council Act No. 587 / 1992 Coll., on Consumer Taxes, as amended by Acts No. 199 / 1993 Coll., No. 325 / 1993 Coll., No. 136 / 1994 Coll. and No. 260 / 1994 Coll.,
2. Article II (2), (3), (4), (5) and (6) of Act No. 260 / 1994 Coll., amending and supplementing the Act of the Czech National Council No. 587 / 1992 Coll., on Consumer Taxes, as amended,
as follows:
1. On 1 January 1996, Article II (5) of Act No. 260 / 1994 Coll., amending and supplementing Act No. 587 / 1992 Coll., on Consumer Taxes, as amended, is hereby repealed.
2. It is stated that the Decree of the Ministry of Agriculture No. 111 / 1995 Coll., laying down the legal and economic conditions of the independence of small independent breweries, will cease to apply simultaneously.
3. The remainder is rejected.
Reasons
The President of the Republic, exercising his right under the provisions of § 64 (1) (a) of Act No. 182 / 1993 Coll., on the Constitutional Court, made an application for annulment on 20 January 1995 pursuant to Article 87 (1) (a) of the Constitution of the Czech Republic (hereinafter referred to as the Constitution)
1. § 2 (i), part of § 33 concerning small independent breweries pursuant to § 2 (i) and § 33a of the Czech National Council Act No. 587 / 1992 Coll., on Consumer Taxes, as amended by Acts No. 199 / 1993 Coll., No. 325 / 1993 Coll., No. 136 / 1994 Coll. and No. 260 / 1994 Coll.,
2. Article II (2), (3), (4), (5) and (6) of Act No. 260 / 1994 Coll., amending and supplementing the Act of the Czech National Council No. 587 / 1992 Coll., on Consumer Taxes, as amended,
for a conflict with Article 1 of the Charter of Fundamental Rights and Freedoms (hereinafter referred to as the Charter), Article 79 (3) of the Constitution and, as the text of the proposal shows, Article 11 (5) of the Charter.
The proposal to abolish the various provisions of the law for conflict with constitutional law can be divided into two headings:
(a) The Consumer Tax Act, as amended, introduces a differentiated lower tax for small independent breweries whose annual beer exhibition (production) is not more than 200 000 hl, which, according to the appellant, is contrary to the principle of equality in rights under Article 1 of the Charter. The appellant argued that, while, under the previous excise legislation for all selected products, including beer, the tax rates and its differentiation were dependent solely on the characteristics of those products, the new legislation introduced a further tax differentiation, namely the extent of annual production, for beer and for beer alone. It stated that the principle of equality in rights, which is one of the fundamental principles of modern democratic legal systems, is understood as being the equality of entities relative to a particular legal standard and which requires the application of the same right in the same factual circumstances, and in this context it pointed out that the Constitutional Court of the Czech and Slovak Federal Republic's finding, published under No 11 / 1992, of the Collection of Resolutions and Finances, according to which, in principle, it cannot be ruled out that the legislator should set differentiated taxes on the principle that a more executive body would pay higher taxes on one of the products subject to excise duty, namely beer, although a similar economic distinction could be made by an objective and rational criterion, which, according to the appellant's view, in the case under consideration, since the legislator did not, as the legislator has not, on a basis, in favour of only one of a more than one party to pay of excise duty.
(b) The cited amendment in Article II (5) requires the Ministry of Agriculture to issue legislation in agreement with the Ministry of Finance laying down legal and economic conditions for the independence of small breweries. This, according to the appellant, is contrary to Article 11 (5) of the Charter, according to which taxes and charges may be imposed only on the basis of the law and Article 78 and Article 79 (3) of the Constitution, which provides that an implementing act may be issued only for the implementation of the law and within its limits. According to the appellant, these conditions are not met because the law did not lay down the limits of the legislation of lower legal force. Legislative provisions which, in the contested provisions, do not determine or indicate the characteristics of "independence" of small breweries, delegate legislative powers to the executive body - the Ministry to an extent that the constitutional order of the Czech Republic does not allow.
The Judge-Rapporteur first examined whether all the legally required management conditions were met and whether the proposal had all the formal and content requirements. He did not find anything that would entitle him to reject the proposal under § 43 (1) of Act No. 182 / 1993 Coll. Nor did it find the existence of a circumstance on the basis of which it would recommend the plenary to issue an order terminating the proceedings.
The proposal was sent to the Chamber of Deputies of the Parliament of the Czech Republic, which issued the Act, whose partial annulment is proposed, with a call for expression (§ 69 of Act No. 182 / 1993 Coll.). The President of the Chamber of Deputies of PhDr. Milan Uhde, in his Opinion of 22 February 1995, also referring to the quoted findings of the Constitutional Court of the Czech and Slovak Federal Republic, stated that the tax differentiation introduced was justified by objective and rational criteria. On the second part of the proposal concerning the empowerment standard, it took the view that Parliament had not infringed and could not have infringed Articles 78 and 79 (3) of the Constitution, since they did not concern it because they committed the executive authorities to the adoption of implementing rules. It took the view that the legislature acted in the belief that the law adopted was in accordance with the Constitution and our legal order and stated that it was up to the Constitutional Court to assess, after examining the proposal of the President of the Republic, the constitutionality of the contested provisions of the Excise Tax Act and to give a decision.
From the observations of the Chamber of Deputies of the Parliament of the Czech Republic, from the Government Bill amending and supplementing the Act of the Czech National Council No. 587 / 1992 Coll., on excise duties, as amended (print 1173), the joint reports of the committees of the Chamber of Deputies of the Parliament of the Czech Republic on this draft law (print 1336), together with the shorthand record of the debate on the Act and from the amount of 77 / 1994 Coll. it was found that the draft amendment to the Act on excise duties was submitted to Parliament by the Government. The provision on the tax advantage of small independent breweries, which did not include a government proposal, was only included in the draft law on the basis of a parliamentary amendment. The Act, including the contested provisions, was adopted on 7 December 1994 at the 25th session of Parliament, with 163 Members present. 133 Members voted in favour, 7 Members voted against, 11 abstentions and 12 abstentions. The law was signed by all the relevant constitutional authorities and was declared in an amount of 77 Collection of Laws, sent out on 30 December 1994, when it came into force. It became effective on 1 January 1995 with the exception of the tax rates for small independent breweries, which took effect on 1 July 1995.
The law was therefore adopted and issued within the limits of the Constitution laid down by competence and in a constitutional manner.
The Constitutional Court dealt with the alleged unconstitutional nature of the contested provisions of the law.
Act No. 260 / 1994 Coll. in § 2 (i) characterises a small independent brewery as such a legal person or a natural person whose annual beer exhibition is not more than 200 000 hl and which fulfils the conditions of a special regulation. For such a brewery, the law provides for a specific tax rate in § 33 which is lower than the tax rate for other breweries.
In particular, it is necessary to consider whether the constitutional principle of equality has been infringed by the statutory provision of a lower tax rate for a particular group of breweries whose principal character is laid down in the cited law. On the issue of equality in tax matters, as the two participants rightly stated, the plenary of the Constitutional Court of the Czech and Slovak Federal Republic has already adopted a legal opinion in its finding of 8 October 1992 sp. zn. According to this finding, relative equality, as understood by modern institutions, only requires the removal of unjustified differences. Special standards may establish specific equality criteria for certain fields, which do not generally result from the application of the principle of equality, since the application of the principle of equality does not set such precise limits as to exclude any discretion of those who apply it. In the field of taxation, the legislature should be required to support its decision with objective and rational criteria. At the same time, the cited finding states that, where the law determines the benefit of one group and provides for disproportionate obligations of another, it can only do so by referring to public values. A similar consideration was based on the finding of the Constitutional Court of the Czech Republic from 7. 6. 1995 sp. zn. Pl. ÚS 4 / 95 concerning the proposal of the President of the Republic to repeal § 34 of the Act of the Czech National Council No. 360 / 1992 Coll., on the pursuit of the profession of authorized architects and technicians active in construction, as amended.
The contested statutory provisions constitute a tax advantage for a certain group of entities, which is not unusual in our tax system as it results from the tax rules which provide for various exemptions from tax (e.g. § 4 and 9 of the Czech National Council Act No. 338 / 1992 Coll., on real estate tax, as amended, § 25 of the Czech National Council Act No. 586 / 1992 Coll., on income tax, as amended, § 3 of the Czech National Council Act No. 16 / 1993 Coll., on road tax, as amended, tax rebates (e.g. § 35 of the Act on Income Tax, § 12 of the Road Tax Act), special rates (e.g. § 36 of the Tax Act No. 16 / 1993 Coll., on Road Tax, as amended).
The reasons for the special adjustment of the tax rate for small independent breweries stem from a trend in compatibility with EC law. Article 90 of the Europe Agreement establishing an Association between the Czech Republic, of the one part, and the European Communities and their Member States, of the other part (Communication of the Ministry of Foreign Affairs No 7 / 1995 Coll.), which, after Parliament's approval and ratification by the President of the Republic, entered into force on 1 February 1995, states, inter alia, that the Parties will promote the exchange of information and know-how, inter alia, in the field of the implementation of the legal, administrative, technical, tax and financial conditions needed for the creation and dissemination of small and medium-sized enterprises and cross-border cooperation.
From the report of 14.3.1995 No 117 / 1995-222, submitted by the Constitutional Court by the Ministry of Agriculture, it was found that the Implementing Decree was to be based on Directive 92 / 84 of the EEC of the Council of 19.10.1992 and EC practice. Section I of Article 4 of this Directive states that Member States may apply reduced tax rates to beer cooked in small independent breweries, which may be graduated on the basis of the annual production of the brewery concerned (the Directive also states who may be considered as a small independent brewery).
At the same time, the Ministry of Agriculture added, for information, to the decree of the Federal Ministry of Finance of the Supreme Financial Administration of the 28th July 1993, which shows, demonstratively, certain elements of the legal and economic dependence of the brewery, with independence always to be examined on a case-by-case basis.
On the first part of the proposal, on the basis of the above, it can be concluded that the legal differences between beer tax rates are a manifestation of the legitimate will of the legislator, which expresses a public interest in supporting small independent breweries and seeks to be compatible with the legislation of the European Union.
Following the examination of this part of the draft Constitutional Court concluded that the contested provisions of the Act on Consumer Taxation do not contradict Articles 1 and 11 (5) of the Charter and therefore the proposal of the President of the Republic to abolish § 2 (i), § 33 concerning small independent breweries pursuant to § 2 (i) and § 33a of the Act of the Czech National Council No 587 / 1992 Coll., as amended by Act No 199 / 1993 Coll., No. 325 / 1993 Coll., No. 136 / 1994 Coll., and § 3 of the Act No 260 / 1994 Coll.
The second part of the proposal raises the objection that Parliament did not comply with Article 79 (3) of the Constitution when adopting the law because it did not establish in the law the limits of the legislation of lower legal force. In particular, Article II (5) of Act No. 260 / 1994 Coll., according to which the Ministry of Agriculture issued legislation in agreement with the Ministry of Finance laying down the legal and economic conditions for the independence of small independent breweries pursuant to § 2 (i) of the Act (Decree of the Ministry of Agriculture No. 111 / 1995 Coll.).
At this point the Constitutional Court relied on the definition of the object of protection in Act No. 260 / 1994 Coll.
The object of protection in the contested law is a "small independent brewery." For the purposes of the law, a small independent brewery is defined in § 2 (i) as such by a legal person or a natural person whose annual beer exhibition is not more than 200 000 hl and who fulfils the conditions of a special regulation. This definition implies two elements, two constitutional features of the concept:
(a) a small brewery, the term of which is defined by production up to 200 000 hl per year;
(b) an independent brewery, which is not identified by the term sign or is "designated" in § 2 (i) in the words "meets the conditions of a special regulation."
The implementing regulation is Article 79 (3) The Constitution is only bound by such more detailed arrangements as are "on the basis and within the limits of the law '.
The first conceptual requirement (production up to 200 000 hl) is clearly defined by law and on this basis the Ministry can specify details by decree.
As regards the second conceptual sign of a protected object, namely "independence ', the legislator left its definition to the implementing regulation, i.e. a lower legal standard. It follows from the law that, in addition to defining its production, protected breweries must comply with some other conditions, but this" something else "is left to the Decree and thus the definition of a basic concept which is of constitutional importance for the definition of protected breweries, outside the influence of the legislator.
Compliance with the unmarked conditions of the special regulation, which then "ex post 'becomes the constitutional features of a legally protected object, gives the impression that it would be equally unequivocal to formulate the legislator's powers of executive authority in other areas of society's life.
The relevant decree under Act No. 260 / 1994 Coll. was issued under No. 111 / 1995 Coll. The Ministry of Agriculture and defined in § 1 (a) to (d) the aspects under which the independence of breweries should be assessed. The Constitutional Court also annulled this decree, but it did not because the Order defined the content of independent breweries in the way it did, but because it determined this fundamental conceptual necessity as a legislator. In this respect, the Constitutional Court therefore opted to the opinion expressed in the proposal by the President of the Republic.
As regards point 1 of the finding, the Constitutional Court decided to repeal Article II (5) of Act No. 260 / 1994 Coll., on the basis of which the Ministry of Agriculture issued the relevant decree in agreement with the Ministry of Finance at a later date, on 1 January 1996, in order to provide Parliament with time to adjust its concept of the concept of an independent brewery in a new law.
The Constitutional Court also takes the view that the finding of the Court implies the recognition of the constitutionality of the principle of tax relief for small breweries, and assumes that, until Parliament and the new Decree amend the case, the tax authorities will take note of this situation that, at the end of 1996, they will close the matter in a manner consistent with the new regulation.
The Constitutional Court annulled Article II (5) of Act No. 260 / 1994 Coll., amending and supplementing the Act of the Czech National Council No. 587 / 1992 Coll., on excise duties, as amended, for its contradiction with Article 79 (3) of the Constitution pursuant to § 70 (1) of the Act No. 182 / 1993 Coll., on the Constitutional Court, and at the same time, in accordance with the provisions of § 70 (3) of Act No. 182 / 1993 Coll., on the Constitutional Court, it stated that the implementing regulation, Decree of the Ministry of Agriculture No. 111 / 1995 Coll., laying down the legal and economic conditions of independence of small independent breweries, will also expire on 1 January 1996.
President of the Constitutional Court of the Czech Republic:
JUDr. Kessler v. r.
The right to give a different opinion on points 1 and 2 of the finding in the minutes of the hearing and to attach it to the decision, stating its name pursuant to Section 14 of Act No. 182 / 1993 Coll., on the Constitutional Court, was used by the judges of the Constitutional Court of the Czech Republic, Dr Vladimir Čermák and Dr Miloš Holeček.
Sign in for notes, favorites and notifications
Regulation Information
| Citation | Findings of the Constitutional Court of the Czech Republic No. 265 / 1995 Coll., on the application for annulment of § 2 (i), § 33 and § 33a of the Act of the Czech National Council No. 587 / 1992 Coll., on excise duties, as amended, and Article II (2), (3), (4), (5) and (6) of Act No. 260 / 1994 Coll., amending and supplementing the Act of the Czech National Council No. 587 / 1992 Coll., on excise duties, as amended |
|---|---|
| Regulation Type | The Constitutional Tribunal found |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 17.11.1995 |
|---|---|
| Effective from | - |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
Comments 0