Croatia / Constitutional Court / U-I-3861/2013 Applicants in the Constitutional review were Večernji list d.o.o. Zagreb and 24 sata d.o.o. Zagreb, represented by attorney at law, Vesna Alaburić

Key facts of the case:

The applicants in the Constitutional review, Večernji list d.o.o. Zagreb and 24 sata d.o.o. Zagreb, represented by the attorney at law, Vesna Alaburić, applied for a constitutional review of Article 38, paragraph 2 point g) of the Act on Value Added Tax (Zakon o porezu na dodanu vrijednost) in the part which states: “containing at least 25,000 words in the daily edition issue”. This provision of the Act on Value Added Tax determines “publication of newspaper journalistic texts containing at least 25,000 words in a daily edition issue”. The applicants stated that this was in contradiction with the constitutional right to the freedom of media as a fundamental right and the most important part of the right to the freedom of speech in a democratic society (Art. 38 of the Constitution of the Republic of Croatia). The applicants also deemed that the Croatian legislator, with regard to Constitutional law, made an unacceptable distinction between newspapers regarding the rate of the value added tax they must pay because the legislator established an absurd criterion of distinction between general-interest daily newspapers – the publishing of at least 25,000 words in a single issue. The reduced tax rate of 5% in this way did not apply to all general-interest daily newspapers and even to all editions of a single general-information daily newspaper. The applicants stated that the limitation prescribed by the disputed part of Article 38, paragraph 2, point g) of the Act on Value Added Tax did not have a legitimate goal and did not pass the tests of proportionality and necessity in a democratic society as determined by the legal positions and practice of the European Court for Human Rights in Strasbourg (ECtHR) and the Court of Justice of the European Union in Luxembourg (CJEU). The applicants deemed that the disputed part of Article 38, paragraph 2, point g) of the Act on Value Added Tax was in contradiction to the principles of legality and legal certainty and that taxpayers (newspaper publishers) were not provided with efficient legal protection in the case of arbitrary proceedings by the relevant tax or supervisory bodies. The applicants deemed that the disputed part of Article 38, paragraph 2, point g) of the Act on Value Added Tax was not in conformity with Article 51 paragraph 2 of the Constitution of the Republic of Croatia. The applicants cited that the disputed part of Article 38, paragraph 2, point g) of the Act on Value Added Tax was in direct contradiction with Council Directive 2006/112/EC on the common system of value added tax of 28 November 2006. The applicants also stated that the disputed part of Article 38, paragraph 2, point g) of the Act on Value Added Tax threatened the pluralism of media as determined by Article 11, paragraph 2 of the Charter of Fundamental Rights and could not be considered necessary or proportional in a democratic society. The applicants also referred to the legal positions and practice of the European Court of Human Rights in Strasbourg and the Court of Justice of the European Union in Luxembourg. Accordingly, the applicants deemed that Article 38, paragraph 2, point g) of the Act on Value Added Tax in the part which states: “containing at least 25,000 words in the daily edition issue” were not in conformity with Article 16, Article 38, paragraph 2 (first sentence) and Article 51, paragraph 2 of the Constitution of the Republic of Croatia. After deliberations, the Constitutional Court decided that it had competence for the application and that the grounds for a constitutional review were met. The Constitutional Court delivered its decision on the temporary suspension of all regulations adopted and actions undertaken on the basis of Article 38, paragraph 2, point g) of the Act on Value Added Tax in the part which states: “containing at least 25,000 words in the daily edition issue” until the rendering of its final decision. The decision did not presuppose the final decision of the Constitutional Court which was to be rendered after obtaining an analysis of expert opinion, an analysis of relevant case law of the European Court for Human Rights (ECtHR) and the Court of Justice of the European Union (CJEU) and a comparative analysis of the relevant case law and constitutional court practice in other states including reference to the Venice Commission and considering Directive 2006/112/EC in the light of applicants’ complaints and the applicability of the EU Charter of Fundamental Rights to this case.

Paragraphs referring to EU Charter: 

 

“(…) In this context it is extremely important to encourage and secure pluralism of media on the market. Article 11 paragraph 2 of the Charter of Fundamental Rights cites that ‘freedom and pluralism of media shall be respected’. Because of that, any measure which in any way (directly or indirectly) endangers that pluralism cannot be considered as necessary or proportional in a democratic society.” “The applicants do not consider Article 38 paragraph 2 point g) of the Act on Value Added Tax in the part which states: “containing at least 25000 words in a daily edition issue” to be in conformity with Article 11 of the Charter of Fundamental Rights of the European Union 2010/C 83/02 (hereinafter: the Charter of the EU) published in the Official Journal of the European Union C83/389 of 30 March 2010. This Article of the Charter of the EU states: “Article 11. Freedom of expression and information 1. Everyone has the right to freedom of expression. This right includes the freedom of thought and giving and receiving of information and ideas without the influence of bodies of authority and without regard to borders. 2. Freedom and pluralism of media are respected.””

Deciding body (original language): 
Ustavni sud Republike Hrvatske
Language: 
Croatian