Annex IV

NOTE FOR PUBLISHER PRINT 2 SLIDES PER PAGE

The Relevance of the ECHR to Taxation Matters

Robert Attard LL.D.

Relevant Articles
Article 1 of the First Protocol of the ECHR (Right to Property). Article 3 ECHR (Protection from Inhuman & Degrading Treatment. Article 4 ECHR (Protection from Forced Labour). Article 5 ECHR (Right to Liberty and Security of Person). Article 6 ECHR (Fair Hearing). Article 8 ECHR (Right to Private & Family Life). Article 11 ECHR (Freedom of Association). Article 13 ECHR (Right to an Effective Remedy). Article 14 (Protection from Discrimination).

Article 1 of the First Protocol of the ECHR (Right to Property)

Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.

The preceding provisions shall not, however, in any way impair the right of a State to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.

Article 1 of the First Protocol of the ECHR (Right to Property) (i)

Taxation interferes with the right to property. However, the right to property is not absolute right. The above does not mean that member states are free to impose any tax regime they may deem fit.

Article 1 of the First Protocol of the ECHR (Right to Property) (ii)

The decisions of the European organs on human rights provide that, in order to comply with the Conventions standards of fundamental human rights, taxation must: (a) Be imposed according to law; (b) Pursue a legitimate purpose; (c) The means employed must not be disproportionate to the ends involved ; (d) Serve a valid purpose in the public or general interest; (e) Provisions adopted must be reasonable and proportionate means to achieve that end States are allowed a significant margin of appreciation in applying the principle of proportionality to their tax laws. Less than 4% of the challenges to tax laws were successful. No absolute prohibition of retrospective tax legislation (NAPUK v. UK).

Article 1 Leading Cases (i)

Travers v. Italy (15117/1989), The interference in question should strike a fair balance between the demands of the general interest of the community and the requirements of the protection of the individuals fundamental rights there must be a reasonable relationship of proportionality between the means employed and the aims sought to be realised. Consequently, the financial liability arising out of the raising of tax or contributions may adversely affect the guarantee secured under this provision if it places an excessive burden on the person or the entity concerned or fundamentally interferes with his or its financial position

Article 1 - Leading Cases (ii)

Kaira v. Finland, It is in the first place for the national authorities to decide what kind of taxes or contributions are to be collected. Furthermore, the decisions in this area will commonly involve the appreciation of political, economic and social questions, which the Convention leaves within the competence of the Contracting States. The power of appreciation of the Contracting States is therefore a wide one

Article 1 - Leading Cases (iii)

In WASA Omsesidigt, Forsakringsbolaget Valands Pensionsstiftelse v. Sweden, The Commission is of the opinion that in the field of taxation it is for the national authorities to make the initial assessment of the aims and means by which they are pursued. Accordingly, a margin of appreciation is left to them and it must be wider in this area than it is in many others attitudes as to the social and economic goals to be pursued by the State in its revenue policy may vary considerably from place to place and time to time. A government may often have to strike a balance between the need to raise revenue and other objectives in its taxation policies. The national authorities are obviously in a better position than the Commission to assess those needs and requirements. Spacek sro v. Czech Republic, the Commission declared admissible a challenge to a law which had not been adequately published (lost on the merits since regulations were adequately accessible and foreseeable).

Article 1 - Leading Cases (iv)

Lemoine v. France (unpublished), a measure relating to the enforcement of taxes was held to violate Art. 1 (probably on the grounds of lack of proportionality). Heinrich v. France, relating to Govts right of preemption in respect of assets sold at a price which was less than market value. ECtHR found a violation because the pre-emption regime was discretionary, scarcely foreseeable and procedurally unfair.

CASE OF INTERSPLAV v. UKRAINE

Application no. 802/02 9 January 2007

Facts of the Case

Intersplav a Ukrainian-Spanish Joint Venture was entitled to certain VAT refunds. Intersplavs operations in the Ukraine were export orientated (0 rated). Tax Administration regularly and systematically delayed Intersplavs entitlement to refunds. Intersplavs cases in front of the Ukrainian administrative tribunals were successful but not directly enforceable because prior confirmation of the awarded amounts was necessary. Therefore, Intersplav did not obtain the refunds it was entitled to in terms of law.

Arguments of the Tax Payer

States groundless refusals of entitlement to VAT refunds amounted to a breach of taxpayers right to property. VAT was certain, liquidated and due and amounted to a possession governed by its right to property in terms of the ECHR.

Arguments of the Govt

Entitlement to VAT refund was not a possession because it was still in dispute. Delays in paying VAT were justified to protect the economic interests of the country. VAT refunding system was being abused of (especially by taxpayers in applicants type of business) therefore Govts reaction was a justified counter-measure. Govt acted within its margin of appreciation.

Courts Decision
Right to VAT Refund constituted a possession for the purposes of the ECHR. The prior judicial review of a claim was not required to validate eligibility for a refund. States margin of appreciation is not unlimited and subject to ECHRs right of review (Govts refusal to grant a refund on the basis of abuse committed by 3rd parties was not justified). Systematic nature of failure to settle VAT resulted in an excessive burden. Interference in applicants possession was disproportionate. Court found for taxpayer and awarded taxpayer EUR25K pecuniary damages.

CASE OF BURDEN and BURDEN v. THE UNITED KINGDOM

Application no. 13378/05 12 December 2006

Facts of the Case

Plaintiffs were two unmarried elderly sisters. Lived together all their lives, shared a house (FMV 875K) for 30 years. Presumably, one of the sisters was to inherit the other sister. Each sisters share above Inheritance Tax exemption threshold (300K). In similar situations civil partners exempt from tax.

Taxpayers arguments
Argued that Inheritance Tax violated right to property and that inheritance tax was discriminatory. They could not benefit from an exemption available to same-sex couples in analogous situations because siblings did not fall to be considered as a civil partnership.

Governments Arguments
No restriction on ability to dispose, no violation of right to property. Siblings were a couple by accident of nature no true analogy with civil partnership. Difference in tax treatment pursued a legitimate aim and the Government had a wide margin of appreciation in determining what was a legitimate aim.

Decision of the Court (I)

3 out of 7 judges registered dissenting opinions. It is for the national authorities to assess the aims and means of the taxes they impose (Lindsay). States enjoy wide margin of appreciation in this field.

Decision of the Court (II)

the national authorities are in principle better placed than the international judge to appreciate what is in the public interest on social or economic grounds. The Court will generally respect the legislatures policy choice in this field unless it is manifestly without reasonable foundation UK cannot be said to have exceeded any acceptable margin of appreciation.

CASE OF BIMER S.A. v. MOLDOVA

Application no. 15084/03 10/07/07

Facts of the Case

In 1998 Bimer S.A obtained a licence to operate a duty free shop. In May 2002, following an amendment to the Customs Code duty free products could only be sold in international airports and on international flights, and that other duty free outlets had to be closed. Thus, Bimer lost its licence. In June 2002 Bimer S.A. together with other companies similarly affected, lodged a court action against this order with the Court of Appeal, which ruled in favour of the applicant. Ultimately, on 11 September 2002 the Supreme Court of Justice quashed the judgment of the Court of Appeal and dismissed the applicants action.

Legal Issues (i)

Relying on Article 1 of Protocol 1 (protection of property), the applicant argued that the closure of its duty free shop violated its right to property. It was undisputed that the right to operate the shop amounted to a possession for the purposes of the Convention.

Legal Issues (ii)

The Court held that there had been a interference in Bimers right to property and that such interference was incompatible with the Convention. The Court held unanimously that there had been a violation of Article 1 of Protocol No. 1 and awarded Bimer S.A. EUR 520,000 in respect of pecuniary damage.

Article 3 ECHR (Protection from Inhuman & Degrading Treatment) No one shall be subjected to torture or to inhuman or degrading treatment or punishment. Is this article relevant to taxation?

CASE OF KOZINETS v. UKRAINE

Application no. 75520/01 6/12/07

Facts of the Case

Kozinets was the director of a company which was subject to a tax audit in 1996. In April 1998 the applicant was summoned to Kharkiv State Tax Police Inspectorate to collect documents which had previously been seized for the purposes of the inspection. Kozinets took a tape recorder with him (he suspected corruption) and tried to record his conversation with the Tax Inspector. He alleged that the Head of the Tax Police Inspectorate broke his tape recorder (by throwing it on the floor and stepping on it) and that the Tax Inspector had beaten him up. Medical examinations reported that the applicant had suffered from bruising and concussion, however it was too late to establish when such injuries had occurred because applicant had failed to produce evidence beyond reasonable doubt (in terms of criminal law) that the bodily harm he had suffered had been inflicted at the Tax Inspectorate.

Legal Issues
Criminal proceedings were instituted against the Tax Inspector proceedings but were discontinued in August 2002. The applicant complained that he had been tortured by a tax police officer, contrary to Article 3 of the Convention. He further complained under Article 6 of the Convention that the investigation undertaken by the domestic authorities into these events had been insufficient. The applicant also complained under Article 13 of the Convention of a lack of effective remedies in respect of the above violations. The Court held, by six votes to one, that there had been no violation of Article 3 (prohibition of inhuman or degrading treatment) concerning the ill-treatment but, unanimously, that there had been a violation of Article 3 (lack of effective investigation) concerning the investigation. It further held unanimously that there was no need to examine the complaint under Article 13 (right to an effective remedy). Mr Kozinets was awarded EUR 2,000 in respect of non-pecuniary damage and EUR 237,88 for costs and expenses.

Article 4 ECHR (Protection from Forced Labour)

(1) No one shall be held in slavery or servitude. (2) No one shall be required to perform forced or compulsory labour. (3) For the purpose of this Article the term "forced or compulsory labour" shall not include: (a) any work required to be done in the ordinary course of detention imposed according to the provisions of Article 5 of this Convention or during conditioned release from such detention; (b) any service of a military character or, in case of conscientious objectors in countries where they are recognised, service exacted instead of compulsory military service; (c) any service exacted in case of an emergency or calamity threatening the life or well-being of the community; (d) any work or service which forms part of normal civil obligations.

Article 4 ECHR (Protection from Forced Labour)

The compatibility of Article 4 of the Convention with forced labour was discussed in Companies W, X, Y & Z v. Austria and Adriano Borghini v. Italy. Both cases dealt with the obligation of persons to withhold tax on payments and in both cases the existence of compulsory tax collecting was justified by the civic obligations argument contemplated in Art. 4. Baker opines that the civic obligations defence may not hold ground in cases where third parties, as opposed to taxpayers, are required to expend significant effort and incur significant expenditure in supplying information in connection with an investigation.

Article 5 ECHR (Right to Liberty and Security of Person)

(1) Everyone has the right to liberty and security of person. No one shall be deprived of his liberty save in the following cases and in accordance with a procedure prescribed by law: (a) the lawful detention of a person after conviction by a competent court; (b) the lawful arrest or detention of a person for non-compliance with the lawful order of a court or in order to secure the fulfilment of any obligation prescribed by law; (c) the lawful arrest or detention of a person effected for the purpose of bringing him before the competent legal authorities on reasonable suspicion of having committed an offence or when it is reasonably considered necessary to prevent his committing an offence or fleeing after having done so; (2) Everyone who is arrested shall be informed promptly, in a language which he understands, of the reasons for his arrest and of any charge against him. (3) Everyone arrested or detained in accordance with the provisions of paragraph (1)(c) of this Article shall be brought promptly before a judge or other officer authorised by law to exercise judicial power and shall be entitled to trial within a reasonable time or to release pending trial. Release may be conditioned by guarantees to appear for trial. (4) Everyone who is deprived of his liberty by arrest or detention shall be entitled to take proceedings by which the lawfulness of his detention shall be decided speedily by a court and his release ordered if the detention is not lawful. (5) Everyone who has been the victim of arrest or detention in contravention of the provisions of this Article shall have an enforceable right to compensation.

Case of Mooren v. Germany

Application no. 11364/03 13/12/07

Facts of the Case

Mooren was suspected of tax evasion (around EUR200k) and a District Court ordered his pre-trial detention. The District Court noted that the applicant, who had availed himself of the right to remain silent, was strongly suspected of tax evasion on the basis of the business records that had been seized when his home was searched. The District Court held that Mooren had to be placed in pre-trial detention because there was a risk that the applicant, if released, might destroy the missing documents or conceal further business transactions and accounts. Mooren was released from detention after 4 months of complicated judicial proceedings.

Legal Issues (i)

Mooren complained that, in the proceedings for review of his pre-trial detention, the Court of Appeal, by remitting his case back to the court of first instance instead of quashing the detention order which it had found not to comply with domestic law, had unlawfully deprived him of his liberty and had unduly delayed the judicial review proceedings. Furthermore, he claimed that his defence counsel had been refused access to the investigation files. He relied, in particular, on Article 5 (right to liberty) of the Convention.

Legal Issues (ii)

The Court held by five votes to two that there had been no violation of Article 5 1 (right to liberty and security). The Court held unanimously that there had been two violations of Article 5 4 on account of the lack of speedy review of the lawfulness of the applicants detention and the refusal to grant access to the case files in those review proceedings. The applicant was awarded 1,500 euros (EUR) in respect of non-pecuniary damage and EUR 5,150 for costs and expenses.

Article 6 ECHR (Fair Hearing)

(1) In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly but the press and public may be excluded from all or part of the trial in the interests of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice. (2) Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law. (3) Everyone charged with a criminal offence has the following minimum rights: (a) to be informed promptly, in a language which he understands and in detail, of the nature and cause of the accusation against him; (b) to have adequate time and facilities for the preparation of his defence; (c) to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require; (d) to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him; (e) to have the free assistance of an interpreter if he cannot understand or speak the language used in court.

Article 6 ECHR (Fair Hearing) (i)

The right to a fair hearing comprises the right to have access to a tribunal, the right to justice within a reasonable time, the right to be heard by an independent and impartial tribunal, the right to silence and the right to legal aid. In the much-criticized decision in Ferrazini as subsequently confirmed in February 2004 in Jussila v. Finland it was held that, The Court considers that tax matters still form part of the hard-core of public authority prerogatives, with the public nature of the relationship between the taxpayer and the authority remaining predominantIt considers that tax disputes fall outside the scope of civil rights and obligations, despite the pecuniary effect which they necessarily produce for the taxpayer.

Article 6 ECHR (Fair Hearing) (ii)

ECnHR and ECtHR have consistently held that ordinary tax proceedings do not relate to determination of civil rights and obligations (AX & BX v. Germany, X v. Germany, X. v. Belgium ad Bendenoun v. France) Not all disputes involving taxation issues are taxation disputes which are outside the scope of Article 6. Classification is key - When a dispute is of either in respect of a criminal charge or is of a civil nature, all the safeguards of Art.6 apply but when a dispute is of a fiscal nature the public law character of the obligation concerned predominates.

Article 6 ECHR (Fair Hearing) (iii)

What is a dispute over a criminal charge? The Engel criteria are used to establish whether a case involves a criminal charge. The Engel criteria involve the following 3 tests: (i) the legal classification of the offence in domestic law; (ii) the nature of the offence; and (iii) the degree of severity of the possible penalty.

Important decisions Disputes of a Criminal Law Nature (i)

Bendenoun v. France the ECtHR held that an action relating to fiscal penalties involved the determination of a criminal charge . JJ v. the Netherlands ECtHR held that an issue over a 100% fiscal penalty involved a criminal charge for the purposes of Art. 6. In HWK v. Switzerland, Lechaczinski v. France, Covexin SA v. France the applicability of Art.6 to disputes over additional taxes was taken for granted. Case Of Stork v. Germany - the ECtHR held that an action relating to a contribution involved the determination of a criminal charge. King v. UK (13881/02): considerable tax penalty proceedings which lasted over 13 years was in breach of Art. 6 (reasonable time requirement) because the large portion of the delay was attributable to the UK authorities.

Important decisions Disputes of a Civil Law Nature (i)

In Schouten & Meldrum v. the Netherlands ECtHR held that disputes relating to social security contributions were mainly of a private law and not public law character. Therefore, such disputes involve a determination of a civil right. K v. Sweden/S v. Austria civil claim for the return of goods seized by tax authorities falls within the scope of Art. 6.

CASE OF LILJA v. SWEDEN

Application no. 36689/02 23/01/07

Facts of the Case

Applicant was a director and shareholder of around 20 companies and was charged on suspicion of aggravated tax fraud and keeping false books. Criminal proceedings were taken against applicant and tax proceedings were instituted separately. Criminal proceedings lasted for 8 years. Tax proceedings were instituted separately and lasted 5 years (proceedings included proceedings over a tax surcharge). Applicant was acquitted of criminal charges but he lost his tax dispute and was ordered to pay substantial tax surcharges.

Legal issues
Length of the proceedings had been incompatible with the reasonable time requirement in Article 6 (fair hearing). Court held that, despite applicants application to extend submission time-bars in the tax proceedings, there had been a violation of applicants right to justice within a reasonable time. Court held that the 5 year term of the tax proceedings and the 7 year term of the criminal proceedings were both unreasonable.

CASE OF JUHA NUUTINEN v. FINLAND

Application no. 45830/99 24 April 2007

Merits in Brief (i)

Mr. Nuutinen was qua shadow director of a company accused of two counts of aggravated tax fraud and two counts of tax fraud (produced false invoices and entered false data in the books and records of the company). He was eventually, at the Appellate stage, found guilty of aiding and abetting the offences he had been charged with as principal offender and guilty of an offence which he had not been charged in the indictment.

Merits in Brief (ii)

Nuutinen argued that his right to a fair hearing had been infringed because he had not been granted an opportunity to defend himself-he was convicted of offences different from those with which he had been originally charged.

Decision of the Court

It was a pure criminal charge therefore the Court did not enter into Ferrazzini issues (FHR do not apply to taxation disputes). In criminal matters accused must be provided with full, detailed information concerning the charges and the legal characterisation of a charge is a prerequisite. The factual situation set out in the indictment changed in the proceedings and accuseds right to defend himself was impaired. Court concluded that applicants rights to be informed in detail of the nature and cause of the accusations against him and his right to have adequate time and facilities for his defence were infringed.

Case of Paykar Yev Haghtanak Ltd v. Armenia.

Application no. 21638/03 20/12/07

Facts of the Case

Applicant had a dispute with the Tax Inspectorate over a tax assessment (which included a surcharge). Applicant lost its case but when it tried to appeal to the national court of last instance, its appeal was returned on the grounds that applicant (which was bankrupt) had not paid a court fee.

Legal Issues (i)

The applicant company complained that it had been unlawfully denied access to the Court of Cassation and that Article 6 (fair hearing) had been infringed. The point at the issue was whether Art. 6 applied to the case in point (in view of the judgement in Ferrazzini)

Legal Issues (ii)

The issue revolved around a matter of classification. Art. 6 does not apply (in terms of Ferrazzini) to pure tax disputes but still applies to disputes over a criminal charge. So the crux of the issue is whether the case in point amounted to a criminal charge for the purposes of Article 6.

Legal Issues (iv)

Court held that the surcharges attached to the assessment in dispute were both deterrent and punitive. Furthermore, penalties were substantial (up to 43%). Consequently the case in point was a case over a criminal charge-Art. 6 applied. The Court found that applicant had been denied access to Court in violation of Art. 6.

Article 8 ECHR (Right to Private & Family Life) (i)

Topical in tax investigations. Investigation techniques are legitimate provided they are carried out: (a) According to law; (b) Necessary in a democratic society; (c) In the interests of the economic well-being of the country , for the prevention of disorder or crime. Requirement (b) above suggests that if the State has alternative means available for the purposes of conducting its investigation than it should resort to such alternative methods rather than risk interfere with a persons right to privacy.

Article 8 ECHR Leading Cases (i)

Funke, Mialhe and Cremieux v. France, searches of premises and seizure of docs did not contemplate sufficient safeguards therefore violated Art. 8. J.Z v. France, measures authorising fiscal authorities to resort to telephone tapping was not sufficiently clear and consequently measures violated Art.8.

Article 8 ECHR Leading Cases (ii)

Volokhy v. Ukraine (23543/02): ECtHR hekd that powers of secret surveillance in the course of criminal investigations are tolerable only in so far as strictly necessary, in accordance with the law, and in pursuit of a legitimate aim. Surveillance rules must be foreseeable and proportional. ECtHR held that there had been a breach because relevant rules were unclear and there were sufficient safeguards against abuse..

Article 9 ECHR Freedom of Thought, Conscience & Religion

(1) Everyone has the right to freedom of thought, conscience and religion; this right includes freedom to change his religion or belief and freedom, either alone or in community with others and in public or private, to manifest his religion or belief, in worship, teaching, practice and observance. (2) Freedom to manifest ones religion or beliefs shall be subject only to such limitations as are prescribed by law and are necessary in a democratic society in the interests of public safety, for the protection of public order, health or morals, or for the protection of the rights and freedoms of others.

Article 9 ECHR Relevant Cases

Association Sivananda de Yoga Vedanta v. France: freedom of religion is not tantamount to freedom from taxation. A religious association cannot expect to be exempt from de tax de quo. Gottesmann v Switzerland: a church tax imposed on persons who did not belong to the church did not violate ECHR on the grounds that taxpayers were granted the right to opt out. Kustannus Oy Vapaa Ajattelija AB & Others v. Finland: A legal person does have freedom of religion.

Article 11 ECHR (Freedom of Association)

(1) Everyone has the right to freedom of peaceful assembly and to freedom of association with others, including the right to form and to join trade unions for the protection of his interests. (2) No restrictions shall be placed on the exercise of these rights other than such as are prescribed by law and are necessary in a democratic society in the interests of national security or public safety, for the prevention of disorder or crime, for the protection of health or morals or for the protection of the rights and freedoms of others. This Article shall not prevent the imposition of lawful restrictions on the exercise of these rights by members of the Armed Forces, of the Police or of the administration of the State.

Article 13 ECHR (Right to an Effective Remedy)

Everyone whose rights and freedoms as set forth in this Convention are violated shall have an effective remedy before a national authority notwithstanding that the violation has been committed by persons acting in an official capacity.

CASE OF RIENER v. BULGARIA

Application no. 46343/99 23 May 2006

Facts of the Case

Applicant was a dual national (Austria/Bulgaria). Director of Austrian Company. Registered as a trader in Bulgaria. Her company owed Bulgarian authorities 1,000K in unpaid taxes. Banned from leaving the country until she settled tax (Tax hostage).

Arguments of the Taxpayer

Argued that her right to freedom of movement had been infringed. Argued that right to effective remedies no effective means of redress, (disproportionate, arbitrary and repressive measures) and right to respect to family life had been infringed.

Arguments of the Government

Measures against applicant lawful and necessary in a democratic society. Principle of proportionality had been respected there was no security for payment available in Bulgaria (assets of the company were situated in Austria).

Decision of the Court (I)

Decision by 6 votes to 1 violation of right to freedom of movement automatic nature of travel ban and exclusion of the possibility of reassessment violated the principle of proportionality. Law relating to travel ban did not adequately provide for sufficient procedural safeguards against arbitrariness.

Decision of the Court (II)

In sum, having regard to the automatic nature of the travel ban, the authorities failure to give due consideration to the principle of proportionality, the lack of clarity in the relevant law and practice with regard to some of the relevant issues and the fact that the prohibition against the applicant leaving Bulgaria was maintained over a lengthy period, the Court considers that it was disproportionate to the aim pursued.

Decision of the Court (III)

Court found that there had been a violation of applicants right to effective redress because the domestic appeals procedure did not grant appropriate relief. Domestic appeals procedure did not contemplate the striking of a fair balance between the public interest and the applicants rights.

Volokhy v. Ukraine (23543/02)

Case discussed supra. ECtHr also found a violation of Art. 13. Applicants could not challenge the interception order since the authorities were not obliged to inform them about having imposed such a measure. The secrecy of the measure rendered it difficult for the person to seek any remedy, of his own accord, while surveillance was in progress.

Article 14 (Protection from Discrimination)

The enjoyment of the rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status.

Article 14 (Protection from Discrimination) (i)

The ECtHR enunciated, in a non-tax case (the Belgian Linguistic case), that Art. 14 does not have an independent existence. The principle was subsequently confirmed in a tax case Gudmundsson v. Iceland. There can never be a violation of Art. 14 in isolation. There can be a violation of Art.14 considered together with another Article of the Convention. Discrimination can only be established vis--vis persons in a comparable position.

Article 14 Leading Cases (i)

In Musa v. Austria , a case which dealt with an auction tax calculated on the basis of the whole best bid and not on the share of property acquired, the Commission remarked that, Article 14 safeguards individuals placed in analogous situations from discrimination (Eur. Court HR, Van der Mussele v. Belgium judgment of 23 November 1983, Series A no. 70, p.22 para. 46). A difference in treatment is discriminatory for the purpose of Article 14 if it has no objective and reasonable justification, that is if it does not pursue a legitimate aim or if there is no reasonable relationship of proportionality between the means employed and the aims sought to be realised (Eur. Vourt HR, Petrovic v. Austria judgment of 27 March 1998, para. 30, to be published in Reports 1998). Moreover the Contracting stares enjoy a certain margin of appreciation in assessing whether and to what extent differences in otherwise similar situations justify a different treatment Thus, an Irish tax which distinguished between domestic and foreign adoptees was not held to be discriminatory (X. v. Ireland), employees and self-employed person were not held to be in a comparable situation (X. v. Austria).

Article 14 Leading Cases (ii)

Galeotti Ottieri della Ciaia v. Italy, ECtHR held that an Italian Inheritance tax which fell heavily on large estates (as opposed to smaller ones) was not discriminatory and that the diverse tax treatment fell within the States margin of appreciation. Schmidt v. Germany, ECtHR declared a levy (for failing to pay service in the fire brigade) which was payable effectively only men to be discriminatory.

Article 14 Leading Cases (iii)

Macgregor v. UK, ECthR found a that an incapacitated spouse allowance which was provided only to men (with an incapacitated spouse) was discriminatory. Lindsay v. UK, UK tax system of aggregating income of husband and wife (but not co-habitees) was not held to be discriminatory against co-habitees on the grounds that the provisions were within the States margin of appreciation. Darby v. Sweden, A Swedish tax law which proscribed nonresidents from benefiting from a tax allowance was held to be discriminatory. ECtHR held that residents and non-residents are in a comparable position.

Sources
The European Convention on Human Rights. The ECHR Case Law database - www.echr.coe.int Baker, Philip, Taxation & The European Convention on Human Rights Jacobs & White, European Convention on Human Rights Attard, Robert, An Introduction to Income Tax Theory.