Application no. 13578/04 
against the Czech Republic

The European Court of Human Rights (Fifth Section), sitting on 10 July 2006 as a Chamber composed of:

Mr P. Lorenzen, President
 Mrs S. Botoucharova
 Mr K. Jungwiert
 Mr V. Butkevych
 Mrs M. Tsatsa-Nikolovska
 Mr J. Borrego Borrego, 
 Mrs R. Jaeger, judges
and Mrs C. Westerdiek, Section Registrar,

Having regard to the above application lodged on 7 April 2004,

Having deliberated, decides as follows:


The applicant, Armex Holding, a.s. is a Czech company with its seat in Děčín. It is represented before the Court by Mr M. Kolář, a lawyer practising in Děčín.

A.  The circumstances of the case

The facts of the case, as submitted by the applicant company, may be summarised as follows.

On 4 November 1998 the applicant company purchased some real estates. The purchase contract stipulated, inter alia, that a part of the purchase price corresponding to real estate transfer tax (daň z převodu nemovitosti) would be paid by the applicant company instead of the seller. In doing so the applicant company, assuring the payment of the tax as provided for in section 8(1) of the Inheritance, Gift and Real Estate Transfer Tax Act, aimed at avoiding its possible later tax obligation if the seller failed to pay the tax.

On 13 May 1999 the Děčín Finance Office (finanční úřad) levied on the seller real estate transfer tax of CZK 220,015 (EUR 7,764). Acting in accordance with the purchase contract, the applicant company paid the tax on 18 June 1999.

On 10 December 2001 the Finance Office notified the applicant company that it was required to pay the real estate transfer tax as a guarantor. On 17 December 2001 the applicant company replied that it had paid the tax on 18 June 1999. Its reply was forwarded to the Ústí nad Labem Finance Department (finanční ředitelství) which, on 30 August 2002, held that the sum paid by the applicant company in June 1999 had covered the seller’s outstanding tax debts in application of section 59(5)-(7) of the Administration of Taxes Act.

The applicant company paid the tax of CZK 242,016 (EUR 8,564) on 25 September 2002.

On 4 November 2002 it filed a constitutional appeal (ústavní stížnost) relying on section 75(2)(a) of the Constitutional Court Act, requesting at the same time, the Constitutional Court (Ústavní soud) to abrogate section 8(1)(a) of the Inheritance, Gift and Real Estate Transfer Tax Act and section 57(5) of the Administration of Taxes Act.

On 24 March 2003 the Constitutional Court rejected his appeal as having been introduced outside the statutory time-limit fixed by section 72(2) the Constitutional Court Act. The court observed that the Finance Department’s decision of 30 August 2002 had been notified to the applicant company on 2 September 2002, and that the latter had brought its constitutional appeal on 27 November 2002. It added that the constitutional appeal could also be dismissed for non-exhaustion of domestic remedies.

The Constitutional Court nevertheless addressed the applicant company’s arguments, finding, inter alia:

“If the applicant [company] as a guarantor fulfilled its obligation to pay the tax before being invited by the tax administrator, and if its payment was properly identified ..., it is to be considered that [the applicant company] fulfilled its obligation and that the tax administrator cannot require that the [identical tax obligation be performed again] on the grounds that the tax payment had been used to cover the taxpayer’s tax debts.

A guarantor secures the payment of real estate transfer tax relating to a specific ... real estate; he does not secure other outstanding payments of the taxpayer.

The Constitutional Court is of the opinion that in the present case, the tax authorities applied the law in breach of the Constitution. ...”

The Constitutional Court finally noted that the applicant company could proceed under section 55b) of the Administration of Taxes Act requesting the Ministry of Finance to review the finance authorities’ decisions.

On 22 December 2003 the Ministry of Finance did not grant the applicant company’s request for review which the latter had filed on 27 May 2003.

B.  Relevant domestic law

The Inheritance Tax, Gift Tax Act (Act no. 357/1992)

Section 8(1)(a) provides that persons liable to pay real estate-transfer tax are those who assigned estates; assignees act as guarantors.

The Administration of Taxes Act (Act no. 337/1992), in force at the relevant time

Under section 57(5) guarantors shall cover back taxes if the law provides for such an obligation, following a request of the tax administrator.

Pursuant to section 59(6) tax payments shall be used to satisfy tax liabilities in the following order: a) costs and expenses, b) fines, c) tax increase, d) oldest arrears of tax payments, e) current tax payments, f) interests, g) penalties.

Under section 59(7) the tax administrator must accept any tax payment, even if it is not made by the tax debtor, and must treat it in the same manner as if it was made by the debtor. The payment cannot be reimbursed to the person who made it on behalf of the debtor.

Under section 55b(1) a decision of the tax administrator, which contradicts the law or is based on material errors in the proceedings and it seems that the tax was not correctly assessed, may be, ex officio or upon the taxpayer’s request, quashed, replaced by a new decision or modified. If the tax administrator finds that the conditions for granting the review were not fulfilled, it upholds the decision concerned.

Constitutional Court Act (Act no. 182/1993)

Under section 75(1), a constitutional appeal is inadmissible if the appellant failed to exhaust all the procedural remedies available in law for the protection of his or her rights.

Section 75(2)(a) gives the Constitutional Court a discretion not to declare a constitutional appeal inadmissible for failure to exhaust statutory remedies if the issue at stake goes significantly beyond the appellant’s personal interest and the appeal was lodged within one year after the impugned decision or event.

Pursuant to section 72(2) constitutional appeals must be lodged within sixty days after the appellant was served with the decision on the final statutory remedy available for the protection of his rights.


1.  Invoking Article 6 of the Convention, the applicant company challenges the decision of the Constitutional Court which dismissed its constitutional appeal as being out of time, without applying section 75(2)(a) of the Constitutional Court Act. It further challenges the Ministry of Finance’s dismissal to review the decisions of the tax authorities.

2.  The applicant company further complains under Article 1 of the Protocol No. 1 to the Convention that its property rights were violated in that it had to pay the same tax twice.


1.  The applicant company first alleges a violation of Article 6 of the Convention, which in relevant parts states as follows:

“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...”

The Court reiterates that disputes over liability to pay tax do not fall under Article 6 § 1 of the Convention, as such proceedings are not decisive for the determination of civil rights and obligations, despite the pecuniary effects which they necessarily produce for the taxpayer (see Ferrazzini v. Italy [GC], no. 44759/98, § 29, ECHR 2001-VII).

Moreover, the present case has no criminal connotation and does therefore not fall under the criminal head of Article 6 of the Convention either.

It follows that this part of the application is incompatible ratione materiae with the provisions of the Convention within the meaning of Article 35 § 3, and must be rejected pursuant to Article 35 § 4.

2.  The applicant company further claims to be a victim of a breach of Article 1 of Protocol No. 1, which provides as follows:

“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 Court considers that it cannot, on the basis of the case file, determine the admissibility of this complaint, and that it is therefore necessary, in accordance with Rule 54 § 2 (b) of the Rules of Court, to give notice of this part of the application to the respondent Government.

For these reasons, the Court unanimously

Decides to adjourn the examination of the applicant company’s complaint under Article 1 of Protocol No. 1;

Declares the remainder of the application inadmissible.

Claudia Westerdiek Peer Lorenzen 
 Registrar President