STEDH CASE OF FERRAZZINI v. ITALY (Application no. 44759/98) JUDGMENT STRASBOURG 12 July 2001

 8.  The majority considers that in the field of taxation there have been no major developments concerning the nature of the obligations of individuals and companies compared with the situation at the time of the drafting of the Convention. Accordingly, the majority is of the opinion that taxation still belongs to the “hard core of public-authority prerogatives, with the public nature of the relationship between the taxpayer and the community remaining predominant”. The majority also takes into account that Article 1 of Protocol No. 1 reserves the right of States to enact such laws as they deem necessary for the purpose of securing the payment of taxes.

I am not convinced by that reasoning.

The finding that Article 6 § 1 of the Convention under its civil head is applicable to tax cases does not in any way restrict the States’ power to place whatever fiscal obligations they wish on individuals and companies. Nor does such a finding restrict the States’ freedom to enforce any such laws as they deem necessary in order to secure the payment of taxes (see Article 1 of Protocol No. 1). Article 6 of the Convention is a procedural guarantee that grants primarily the right of access to a court and the right to have court proceedings determined fairly within a reasonable time. In that respect there have in fact been important developments in the field of taxation since the drafting of the Convention. Whereas at that time it was doubtful in some legal systems to what extent administrative decisions in fiscal matters could be reviewed by a court – if at all – it is now recognised, at least in the vast majority of the Contracting Parties, that disputes in fiscal matters can be decided in ordinary proceedings by a court or a tribunal. It is therefore difficult to see why it is still necessary to grant the States a special prerogative under the Convention in this field and thus deny litigants in tax proceedings the elementary procedural guarantees of Article 6 § 1. As demonstrated, inter alia, in the concurring opinion of Judge Ress, there is a clear need to grant such protection – not least against lengthy proceedings combined with an obligation to pay taxes before a dispute concerning the legality of the tax decision is finally settled. In my opinion there is no basis in Article 1 of Protocol No. 1 for the assumption that the intention was to grant States the right to deny individuals any procedural protection in disputes on tax matters. How might it be justifiable to exempt from the Court’s scrutiny the procedural rights guaranteed by Article 6 § 1 in respect of a dispute whose substance is directly linked to a civil right (in this case the right to peaceful enjoyment of possessions)? Such an interpretation would also be contrary to the constantly developing case-law of the Court according to which substantive Articles of the Convention, such as Articles 2, 3 and 8, must be interpreted as also implying procedural obligations on States.

Furthermore, it is difficult to justify that an extended application of Article 6 § 1 under its civil head is not possible on grounds of the need to preserve a prerogative for States in fiscal matters, when the Court has gone sufficiently far in its case-law to include tax disputes under its criminal head. Since Bendenoun v. France (judgment of 24 February 1994, Series A no. 284), the Court has consistently considered proceedings relating to tax disputes to be “criminal” if tax fines, surcharges, etc., with a deterrent and punitive purpose are imposed or even if there is a risk that they may be imposed (see, most recently, J.B. v. Switzerland, no. 31827/96, ECHR 2001-III). The result is no different if the proceedings also concern the tax assessment as such (see the admissibility decision of 16 May 2000 in Georgiou v. the United Kingdom, no. 40042/98, unreported). This implies that the level of protection under Article 6 § 1 of the Convention varies depending on how the legal framework for tax proceedings is organised in the different legal systems; and even within one legal system it may be purely a matter of coincidence whether penalty proceedings and tax assessment proceedings are joined or not. An interpretation of the Convention that leads to such random results is far from satisfactory.

9. For the above reasons, I conclude that there are no convincing arguments for maintaining the present case-law of the Court that proceedings regarding taxation do not determine “civil rights and obligations” for the purposes of Article 6 of the Convention. Accordingly, I find that Article 6 § 1 of the Convention is applicable in the instant case