CEDH · CASELAW;DECISIONS;DECCOMMISSION;ENG — 15 mai 1996

.sDD6737AE { font-size:11pt } .s211D6B00 { margin-top:0pt; margin-bottom:0pt; line-height:normal; widows:0; orphans:0; font-size:8.5pt } .sBB9EE52A { font-family:Arial }                          AS TO THE ADMISSIBILITY OF                         Application No. 27109/95                       by Raimo KAIRA                       against Finland         The European Commission of Human Rights (First Chamber) sitting in private on 15 May 1996, the following members being present:              Mr.    C.L. ROZAKIS, President            Mrs.   J. LIDDY            MM.    E. BUSUTTIL                  A.S. GÖZÜBÜYÜK                  A. WEITZEL                  M.P. PELLONPÄÄ                  B. MARXER                  B. CONFORTI                  N. BRATZA                  I. BÉKÉS                  G. RESS                  A. PERENIC                  C. BÎRSAN                  K. HERNDL              Mrs.   M.F. BUQUICCHIO, Secretary to the Chamber         Having regard to Article 25 of the Convention for the Protection of Human Rights and Fundamental Freedoms;         Having regard to the application introduced on 12 April 1995 by Raimo KAIRA against Finland and registered on 25 April 1995 under file No. 27109/95;         Having regard to the report provided for in Rule 47 of the Rules of Procedure of the Commission;         Having deliberated;         Decides as follows:   THE FACTS         The applicant is a Finnish citizen, born in 1917. He is a retired pharmacist residing in Helsinki. Before the Commission he is represented by Mr. Matti Wuori, a lawyer practising in Helsinki.         The facts of the case, as submitted by the applicant, may be summarised as follows.         The applicant owned a pharmacy in Helsinki. He retired from business as from 1 March 1992 and sold his pharmacy to another pharmacist.         Under section 1 of the 1946 Act on the Pharmacy Duty (laki apteekkimaksusta, lagen om apoteksavgift), hereinafter "the 1946 Act", a pharmacist is obliged to pay pharmacy duty (apteekkimaksu, apotek- avgift) based on the pharmacy's turnover. Under section 5 of the 1946 Act, if the pharmacy has been transferred to another pharmacist in the course of the year, the pharmacy duty for the relevant calendar year shall be divided between the pharmacists in accordance with their respective shares of the turnover. The pharmacy duty is determined by the National Agency for Medicines (Lääkelaitos, Läkemedelsverket - "the Agency") and it must be paid to the relevant County Administrative Board (lääninhallitus, länsstyrelsen). Section 7 of the 1946 Act refers to the Act on the Enforced Recovery of Taxes and Duties (laki verojen ja maksujen perimisestä ulosottotoimin, lagen om indrivning av skatter och avgifter i utsökningsväg). The duty is progressive. The minimum duty is 6 % and the   maximum duty is 11 % of the turnover. Furthermore, section 2 of the 1946 Act empowers the Council of State (valtio- neuvosto, statsrådet) to determine the lower limit of each payment band. Under the Council of State's decision concerning the pharmacy duty for 1992, a pharmacy duty of 6 % must be paid on a turnover exceeding FIM 1,371,000. Furthermore, for example, a duty of 10.5 % must be paid for a turnover exceeding FIM 5,941,000.         The applicant declared his pharmacy's turnover from 1 January to 29 February 1992.         On 18 June 1993 the Agency determined the applicant's pharmacy duty to be FIM 95,673 for January and February 1992 and his successor's duty to be FIM 640,246 for the rest of the year of 1992. The Agency had added up the applicant's turnover (FIM 1,164,218) and his successor's turnover (FIM 7,791,000) and based the pharmacy duty on the pharmacy's total turnover in 1992. The total pharmacy duty was subsequently divided between the two pharmacists in proportion to their shares of the total turnover.         The applicant appealed to the Supreme Administrative Court (korkein hallinto-oikeus, högsta förvaltningsdomstolen) as regards the method of calculating the duty. He stated that it was incorrect to base the pharmacy duty on the pharmacy's total turnover and requested that his duty be calculated only on the basis of his own turnover. He also maintained that the turnover had been incorrectly assessed since he was denied the right to make a deduction for the furniture that his successor had not bought from him.         On 13 October 1994 the Supreme Administrative Court rejected the applicant's appeal. It found that the turnover, on which the duty was based, had been correctly assessed. Furthermore, it found that the method of calculating the pharmacy duty had been in accordance with sections 2 and 5 of the 1946 Act.   COMPLAINTS   1.     The applicant complains that he has been denied the peaceful enjoyment of his possessions by the allegedly disproportionate and unfair level of the pharmacy duty levied on his relinquishing his practice. He maintains that his turnover for the two months was so low that if the duty had been levied on his own turnover alone, he would have been charged no duty at all. He maintains that the duty merely served the fiscal interests of the State and, together with the refusal to deduct the value of the furniture, infringed his right under Article 1 of Protocol No. 1 to the Convention. He maintains that the duty was unreasonable and confiscatory in nature.   2.     The applicant maintains, furthermore, that the Supreme Administrative Court has routinely endorsed the views of the state monopoly and the fiscal interests of the State. Therefore, he complains that the court proceedings were so deficient that his right to a fair and impartial hearing has been violated. He invokes, in this respect, Article 6 of the Convention.   THE LAW   1.     The applicant complains that the relevant pharmacy duty was disproportionate and confiscatory in nature on the basis of certain alleged errors in the manner of its determination. He invokes Article 1 of Protocol No. 1 (P1-1) to the Convention, which reads:         "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."         The Commission recalls that any legislation which introduces some sort of fiscal obligation will as such deprive those affected of a possession, namely the amount of money which must be paid. However, the second paragraph of Article 1 of Protocol No. 1 (P1-1) to the Convention expressly secures to the States Parties to the Convention the right to enforce such laws as they deem necessary to secure the payment of taxes or other contributions (see No. 13013/87, Dec. 14.12.88, D.R. 58, p. 163). Accordingly, the Commission will first consider whether the interference with the applicant's right under Article 1 of Protocol No. 1 (P1-1) is justified by the second paragraph of this provision.         The Commission notes that the applicant was obliged to pay a certain sum of his turnover. The Commission finds that this constituted a monetary contribution on turnover. It would not differ from a monetary contribution on, for example, capital assets or a piece of land. Having regard to this and to the maximum percentage of the levy, the effects on the applicant were not such as could deprive the legislation   of the character of a tax within the meaning of the second paragraph of Article 1 of Protocol No. 1 (P1-1). Nevertheless, this does not take the issue wholly outside the Commission's control since the correct application of Article 1 of Protocol No. 1 (P1-1) is subject to supervision by the Convention organs.         Applying this supervision, the Commission finds that a financial liability arising out of the raising of taxes or contributions may adversely affect the guarantee secured under this provision if it places an excessive burden on the person or entity concerned or fundamentally interferes with his or its financial position. However, 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 (cf. No. 11036/84, Dec. 2.12.85, D.R. 45 p. 211).         The Commission notes that the dispute concerned mainly the interpretation of the provision concerning the method of calculating the pharmacy duty, i.e. the interpretation of section 5 of the 1946 Act. The Commission recalls that the dispute was examined by the Supreme Administrative Court, which, acting within its competence and applying what it considered to be the relevant rules of the applicable law, found it established that the method of calculating the duty was in accordance with the relevant law. The Commission, taking into account its limited powers to review compliance with domestic law, concludes that the interference with the applicant's possession rights was lawful within the meaning of Article 1 of Protocol No. 1 (P1-1) to the Convention.          Furthermore, the Commission notes that the pharmacy duty varies between 6 % and 11 % of a pharmacy's turnover, in the applicant's case being about 8 %. It is true that if the applicant's pharmacy duty had been determined only on the basis of his own turnover for the two months, his turnover would have been below the minimum threshold for paying such a duty. Nevertheless, the Commission cannot find that the relevant pharmacy duty affected the applicant's possession rights or interfered with his financial situation to such an extent that this could be considered disproportionate or an abuse of the State's right under Article 1 of Protocol No. 1 (P1-1) to levy taxes and other contributions.         It follows that this part of the application is manifestly ill- founded within the meaning of Article 27 para. 2 (Art. 27-2) of the Convention.   2.     The applicant also complains that the proceedings in the Supreme Administrative Court were not fair within the meaning of Article 6 (Art. 6) of the Convention, which reads, in so far as relevant, as follows:         "1.   In the determination of his civil rights and       obligations ... , everyone is entitled to a fair ...       hearing ... "         The Commission has consistently held that Article 6 (Art. 6) is not applicable to proceedings regarding tax assessments. Furthermore, analysing the various features of public and private law in the instant case (cf. Eur. Court H.R., Schouten and Meldrum judgment of 9 December 1994, Series A no. 304), the Commission notes that the relevant contribution was based on legislation and was of a compulsory nature whereas there are no elements of private law. The Commission concludes that the dispute in the present case is not to be regarded as having involved "the determination of civil rights and obligations" and Article 6 (Art. 6) of the Convention is therefore not applicable.         It follows that   this part of the application is incompatible ratione materiae with the Convention within the meaning of Article 27 para. 2 (Art. 27-2).         For these reasons, the Commission, unanimously,         DECLARES THE APPLICATION INADMISSIBLE.   Secretary to the First Chamber         President of the First Chamber        (M.F. BUQUICCHIO)                        (C.L. ROZAKIS)