AS TO THE ADMISSIBILITY OF
Application no. 46757/99
by Giuliana GALEOTTI OTTIERI DELLA CIAJA and six others
The European Court of Human Rights (Second Section) sitting on 22 June 1999 as a Chamber composed of
Mr C. Rozakis, President,
Mr M. Fischbach,
Mr B. Conforti,
Mr P. Lorenzen,
Mrs M. Tsatsa-Nikolovska,
Mr A.B. Baka,
Mr E. Levits, Judges,
with Mr E. Fribergh, Section Registrar;
Having regard to Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms;
Having regard to the application introduced on 31 December 1998 by Giuliana GALEOTTI OTTIERI DELLA CIAJA and six others against Italy and registered on 12 March 1999 under file no. 46757/99;
Having regard to the report provided for in Rule 49 of the Rules of Court;
Decides as follows:
The applicants are seven Italian nationals, whose names, dates of birth and places of residence are indicated in the attached list.
They are represented before the Court by Mr Fabio Pisillo, Mr Riccardo Pisillo Mazzeschi and Mr Marco Miccinesi, three lawyers practising in Siena and Florence.
The facts of the case, as submitted by the applicants, may be summarised as follows.
The first four applicants are the heirs of a certain Mrs B.
The amount of main and complementary taxes to be paid on Mrs B.’s estate of inheritance was fixed respectively at 3,499,302,200 ITL (approximately 11,850,000 FRF) and 265,393,050 (approximately 900,000 FRF).
On 17 September 1986 the first applicant requested the Siena revenue to recalculate the taxes. She observed that in accordance with Rule 6 of Presidential Decree no. 637 of 1972, tax rates had been assessed on the estate of inheritance considered as a whole, and not on the heirs’ individual assets, a fact which provoked a difference of treatment between sole heirs and persons being heirs pro quota of substantial estates. The first applicant noted in particular that under the above system, assuming that the estate amounted to 2,000,000,000 ITL, the sole heir should pay 497,850,000 ITL, while five heirs sharing pro quota an estate of 10,000,000,000 ITL should pay 595,570,000 ITL each.
The Revenue rejected the first applicant’s request.
On 1 February 1987 the first four applicants and a certain Mrs O. introduced a claim before the Siena Fiscal Board. They alleged, inter alia, that Rule 6 of Presidential Decree no. 637 of 1972 was contrary to Articles 3 and 53 of the Italian Constitution, guaranteeing the principle of equality of treatment and providing that everybody should contribute to public expenses in relation to his or her taxable capacity.
In a decision of 4 June 1991, the Fiscal Board, observing that on 11 February 1988 the Constitutional Court had declared manifestly ill-founded an exception similar to the one raised by the applicants, rejected the claim.
Invoking, inter alia, Article 14 of the Convention, taken in conjunction with Article 1 of Protocol n° 1, the first four applicants and Mrs O. appealed to the Appeals Fiscal Board.
In an order of 20 May 1992, the Appeals Board confirmed the first-instance decision.
On 6 February 1993 the first four applicants and Mrs O. introduced a claim before the Florence Court of Appeal, seeking the withdrawal of the Appeals Board’s decision. They relied on Articles 3 and 53 of the Italian Constitution as well as on Article 14 of the Convention, taken in conjunction with Article 1 of Protocol n° 1.
In a judgment of 8 July 1994, the Court of Appeal rejected the applicants’ claim. It raised doubts as to the binding character of the Convention and noted that, in any case, its provisions could be modified by subsequent ordinary laws. The Court of Appeal moreover observed that, as the Constitutional Court had held on a number of occasions, taxes had to be assessed on the basis of the estate of inheritance as a whole, without taking into account the heirs’ individual assets. Therefore, higher tax rates on more substantial estates were a mere consequence of the principle of progressiveness of taxation.
The applicants appealed on points of law, the last three applicants acting in their capacity of heirs of Mrs O.
In a judgment of 20 February 1998, filed with the registry on 8 July 1998, the Court of Cassation rejected the applicants’ appeal. It acknowledged that the Convention provisions were incorporated into Italian law and could not be modified by ordinary laws. The Court of Cassation moreover accepted that taxation could interfere with the citizens’ right of property and raise issues under Article 14 of the Convention. However, it found no appearance of violation of this provision, given the fact that Article 6 of Presidential Decree no. 637 was aimed to ensure an higher fiscal pressure on more substantial estates, thus applying the principle of progressiveness of taxation.
The applicants consider that the system introduced by Article 6 of Presidential Decree no. 637 of 1972, according to which tax rates are assessed on the estate as a whole, and not on the heirs’ individual assets, violates Article 14 of the Convention, taken in conjunction with Article 1 of Protocol n° 1.
The applicants consider that the system introduced by Article 6 of Presidential Decree no. 637 of 1972 violates Article 14 of the Convention, taken in conjunction with Article 1 of Protocol n° 1, which provisions state as follows
" 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 1 of Protocol n° 1
" 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 applicants submit that by assessing tax rates on the estate as a whole, and not on the heirs’ individual assets, the legislator has introduced an unjustified different treatment of persons in similar situations. They emphasise that the sole heir has to pay less than the heirs pro quota, even if the amount effectively inherited is the same. They note that taxes are always paid by persons, not by estates as such and consider that they bore an excessive burden, breaking the fair balance which should be struck between the protection of the right of property and the requirements of the general interest.
The Court notes that Article 1 of Protocol n° 1, second paragraph, establishes that the duty to pay tax falls within its field of application. Accordingly, Article 14 is also applicable (see the Darby v. Sweden judgment of 23 October 1990, Series A no. 187, p. 12, § 30 and, mutatis mutandis, the Inze v. Austria judgment of 28 October 1987, Series A no. 126, pp. 17-18, §§ 36-40).
For the purposes of Article 14 a difference of treatment is discriminatory if it "has no objective and reasonable justification", that is if it does not pursue a "legitimate aim" or if there is not a "reasonable relationship of proportionality between the means employed and the aim sought to be realised". Moreover in the field of taxation the Contracting States enjoy a wide margin of appreciation in assessing whether and to what extent differences in otherwise similar situations justify a different treatment (cf. the Karlheinz Schmidt v. Germany judgment of 18 July 1994, Series A no. 291-B, p. 32, § 24 and the Darby judgment, quoted above, p. 12, § 31; see also Eur. Comm. HR, N° 11089/84, Dec. 11.11.86, D.R. 49, pp. 181, 190-191). In particular, it is not sufficient for the applicants to complain merely that they have been taxed more than others, but they must show that the tax in question operates to distinguish between similar taxpayers on discriminatory grounds (see, mutatis mutandis, Eur. Comm. HR, N° 13013/87, Dec. 14.12.88, D.R. 58, pp. 163, 188).
In the present case, Article 6 of Presidential Decree no. 637 of 1972 pursued the legitimate aim of placing a higher fiscal pressure on more substantial estates, in accordance with the principle of progressiveness of taxation, which is adopted in a large number of the Member States of the Council of Europe. Moreover, the difference of treatment complained of was a mere consequence of the choice made by the Italian Parliament of assessing tax rates on the estate as a whole, and not on the heirs’ individual assets. In this context, it is to be recalled that systems of taxation inevitably differentiate between different groups of taxpayers and that the implementation of any taxation system creates marginal situations (see Eur. Comm. HR, N° 13013/87, Dec. 14.12.88 and N° 11089/84, Dec. 11.11.86, quoted above).
It is not for the Convention Organs to substitute their own opinion on the efficiency of a system of taxation to that of the national authorities. This matter falls within the margin of appreciation of the Contracting States. The Court confines itself in observing that the measures at issue are not manifestly illogical or arbitrary, given that as a general rule substantial estates reflect a greater taxable capacity. It considers therefore that the means employed to achieve the legitimate aim pursued were not disproportionate.
It follows that the application is manifestly ill-founded within the meaning of Article 35 § 3 of the Convention and must be rejected in accordance with paragraph 4 of this same provision.
For these reasons, the Court, unanimously,
DECLARES THE APPLICATION INADMISSIBLE.
Erik Fribergh Christos Rozakis
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