Austria / Constitutional Court / G302/2019

Constitutional Court
Policy area
Taxation
Deciding body type
Nationales Gericht
Deciding body
Constitutional Court
Type
Decision
Decision date
26/06/2020
ECLI (European case law identifier)
AT:VFGH:2020:G302.2019
  • Austria / Constitutional Court / G302/2019

    Key facts of the case: 

    A complainant filed an appeal against an income tax assessment. The Federal Tax Court (Bundesfinanzgericht) dismissed the application for the granting of procedural assistance and justified this by stating that the legal question to be decided did not present any particular difficulties of a legal nature and therefore the conditions for the granting of procedural assistance according to §292 (1) Austrian Federal Tax Code (Bundesabgabenordnung) did not exist. According to the Federal Tax Court, the question to be decided in the underlying tax proceedings is not an unclarified, particularly complex legal question, but rather "an assessment of evidence to be solved purely on the level of the facts"; the applicant also did not point out any particular difficulties of a legal nature.

    In dealing with the complaint directed against this decision, doubts arose in the Constitutional Court as to the constitutionality of §292 (1) Austrian Federal Tax Code in the version of Federal Law Gazette I 117/2016. The Constitutional Court therefore decided on 11 December 2019 to examine this provision of the law ex officio for its constitutionality.

    Key legal question raised by the Court:

    Is §292 Austrian Federal Tax Code (Bundesabgabenordnung, BAO) in the version of Federal Law Gazette I 117/2016 stipulating that procedural assistance in tax proceedings may only be granted if “legal questions to be decided show particular difficulties of a legal nature” constitutional?

    Outcome of the case:

    Although the wording of §292 BAO might initially suggest that the granting of procedural assistance is only permissible if objectively difficult questions of a legal nature have to be decided in the proceedings, the provision may be applied in individual cases such as the present case according to the Constitutional Court. This is also based on the fact that the legislature intended to introduce procedural assistance for proceedings before the Federal Finance Court "to establish a legal situation that corresponds to Art 47 CFR".

    The Constitutional Court found that the phrase "that legal questions to be decided show particular difficulties of a legal nature" enshrined in §292 BAO requires and permits an examination of whether particular difficulties exist for the applicant in the concrete individual case. In doing so, all circumstances of the case such as the subject matter of the dispute, the reasonable prospects of success of the party seeking legal protection, the significance of the dispute for the party seeking legal protection, the complexity of the applicable law and the applicable procedure as well as the ability of the party seeking legal protection to effectively defend its case must be balanced.

    Thus, §292 (1) BAO does not exclude the granting of procedural assistance in individual cases simply because objectively there is no complex, particularly difficult question of a legal nature. On the one hand, if interpreted in conformity with the constitution, special difficulties in determining the legally relevant facts, i.e. questions of a factual nature, can also justify a claim to procedural assistance, especially since questions of fact regularly lead to questions of law; and on the other hand, the ability of the applicant concerned to effectively represent his or her concern must always be taken into account.

     

     

  • Paragraphs referring to EU Charter

    4.1 The case-law of the European Court of Human Rights and also of the Court of Justice of the European Union has developed more detailed criteria that must be observed for the granting of procedural aid in proceedings to which Art 6 ECHR or Art 47 ECHR applies: According to the case-law of the Court of Justice of the European Union, the principle of effective legal protection enshrined in Art 47 ECHR requires to examine whether the conditions for granting legal aid constitute a restriction of the right of access to justice which in itself affects the very substance of that right, whether they serve a legitimate purpose and whether the means employed are proportionate to the objective pursued (ECJ 22. 12.2010, Case C-279/09 Deutsche Energiehandels- und Beratungsgesellschaft mbH [2010] ECR I-13849). In the context of this assessment, the judge may take into account the subject matter of the dispute, the reasonable prospects of success of the plaintiff, the importance of the dispute for the plaintiff, the complexity of the applicable law and the applicable procedure as well as the plaintiff's ability to effectively defend his case.

     

    4.2 According to the case law of the Court of Justice of the European Union on Art. 47 Charter of Fundamental Rights and the European Court of Human Rights on Art. 6 ECHR, the assessment of whether there is a right to procedural aid thus depends on the circumstances of the individual case.

    It should be noted that the guarantees apply to varying degrees depending on the subject matter, the subject of the proceedings and the instance, which in turn is determined by the principle of proportionality (VfSlg 19.632/2012).gal protection to effectively defend its case must be weighed up.

    4.3 Insofar as Art. 47 Charter of Fundamental Rights or Art. 6 ECHR should be applicable in the respective tax proceedings, a legal regulation such as that of §292 (1) BAO might not be compatible with these requirements: The provision seems - according to the preliminary assumption of the Constitutional Court - to exclude without exception the right to procedural assistance if there are no particular difficulties of a legal nature. In this context, it is probably irrelevant whether there are difficulties of a factual nature in the respective individual case from the outset, for example with regard to the determination of the facts of the case. Also it does not seem to depend on the abilities of the applicant to represent his request effectively.

     

    4.4 Except in the case of particular difficulties of a legal nature, §292 (1) BAO, contrary to the case law of the European Union's Court of Justice on Art. 47 Charter of Fundamental Rights and the European Court of Human Rights on Art. 6 ECHR, does not allow for sufficient consideration of the circumstances of the individual case.

     

    2.1 §292 (1) BAO provides for the granting of procedural assistance that legal questions that are to be decided have special difficulties of a legal nature. The concerns of the Constitutional Court were that the regulation violates Art. 47 Charter of Fundamental Rights or Art. 6 ECHR, because it seems to exclude the claim for procedural assistance without exception, if there are no special difficulties of a legal nature, whereby it seems to be irrelevant whether there are difficulties of a factual nature in the respective individual case from the outset, for example with regard to the investigation of the facts, and whether it does not seem to depend on the abilities of the applicant to effectively represent his concern.

     

    2.2 In its statement, the Austrian government argues that Art. 47 (3) Charter of Fundamental Rights is not an absolute right, but rather that the legislator is empowered to determine the conditions for the application of Art 47 (3) Charter of Fundamental Rights. According to the case-law of the Court of Justice of the European Union and the European Court of Human Rights, the complexity of the applicable law and the applicable procedure is a central aspect that may be decisive for or against the granting of legal aid. In the opinion of the Federal Government, it would therefore not contradict the requirements of Art 47 Charter of Fundamental Rights if the legislator explicitly adopted this criterion in the legal text. If the legal provision does not mention all the criteria developed by the case law of the Court of Justice of the European Union or the European Court of Human Rights, this does not lead to the unconstitutionality of the provision in question.

    2.3 The Constitutional Court assumes with the Federal Government that with regard to tax proceedings in which the law of the European Union is to be applied, it must be examined whether §292 BAO corresponds to the requirements of Art. 47 Charter of Fundamental Rights - which in this respect corresponds to Art. 6 ECHR. The following considerations must be taken into account:

    2.3.1 The Constitutional Court has stated in VfSlg 19.632/2012 that also rights of the Charter of Fundamental Rights can be asserted as constitutionally guaranteed rights according to Art. 144 B-VG and that "within the scope of application of the Charter of Fundamental Rights" they form an examination standard in the procedure of general norm control, in particular according to Art139 and Art140 B-VG (VfSlg 19.632/2012, 220 f.).

    2.3.2 Article 47 (3) Charter of Fundamental Rights provides that legal aid shall be granted to persons who do not have sufficient resources, to the extent that such aid is necessary to ensure effective access to justice.

    2.3.3 According to the case law of the Court of Justice of the European Union - which refers to the European Court of Human Rights (ECHR 9.10.1979, Airey v. Ireland, Appl 6.6289/73, Z26; 7.5.2002, McVicar v. United Kingdom, Z48 and 49; 16.7.2002, P., C. and S./United Kingdom, Appl 56.547/00, Z91; 15.2.2005, Steel and Morris v. United Kingdom, Appl 68. 416/01, Z61) - the principle of effective judicial protection enshrined in Art. 47 Charter of Fundamental Rights requires an examination of whether the conditions for the grant of legal aid constitute a restriction on the right of access to justice which in itself affects the very substance of that right, whether they serve a legitimate purpose and whether the means employed are proportionate to the objective pursued (ECJ 22. 12.2010, Case C-279/09 Deutsche Energiehandels- und Beratungsgesellschaft mbH [2010] ECR I-13849). In the context of this assessment, the judge may take into account the subject matter of the dispute, the reasonable prospects of success of the party seeking legal protection, the importance of the dispute for the party seeking legal protection, the complexity of the applicable law and the applicable procedure as well as the ability of the party seeking legal protection to effectively represent its interests.

     

    2.4 Contrary to the preliminary assumption of the Constitutional Court, §292 (1) BAO - as also advocated by the Federal Government in its opinion - can be interpreted in accordance with the constitutional requirements in individual cases:

    2.4.1 Although the wording of the provision might initially suggest that the granting of procedural assistance is only admissible if objectively difficult questions of a legal nature have to be decided in the proceedings, in the opinion of the Constitutional Court - also on the assumption that the legislature intended to introduce procedural assistance for proceedings before the Federal Finance Court "in order to establish a legal situation corresponding to Art47 Charter of Fundamental Rights" (Explanation of RV 1352 BlgNR 25. GP, 1) - it does not prevent the provision from being applied in individual cases in accordance with the criteria outlined above:

    The phrase "that legal questions to be decided show particular difficulties of a legal nature" requires and permits an examination of whether particular difficulties exist for the applicant in the concrete individual case. In doing so, all circumstances of the case such as the subject matter of the dispute, the reasonable prospects of success of the party seeking legal protection, the significance of the dispute for the party seeking legal protection, the complexity of the applicable law and the applicable procedure as well as the ability of the party seeking legal protection to effectively defend its case must be weighed up.