European Court of Human Rights

Information Note on the Court’s case-law No. 155

August-September 2012

Optim & Industerre v. Belgium (dec.) - 23819/06

Decision 11.9.2012 [Section II]

Article 1 of Protocol No. 1

Article 1 para. 1 of Protocol No. 1

Possessions

Frustrated legitimate expectation that a tax liability that was not certain or of a fixed amount would become time-barred: inadmissible

 

Facts - Between 1989 and 1997 corporation tax liabilities were registered in the names of the two applicant companies. They submitted administrative complaints to challenge the payments, requesting that the amount of the tax that, according to the relevant terminology, remained “indisputably due” (i.e. while the complaints were pending) be set at zero, and their requests were granted. The applicants were subsequently issued with payment orders that stopped time running for the purposes of the statutory limitation period. However, a judgment of the Court of Cassation in 2002 found that a payment order did not stop time running if the registered tax liabilities were disputed. The legislature then intervened to prevent disputed tax liabilities from becoming time-barred. In particular, a new interpretative legal provision was adopted to the effect that “payment orders must be interpreted as also constituting an act interrupting the limitation period ... even when the disputed tax liability is not certain or of a fixed amount”. The applicant companies’ complaints were rejected and they lodged appeals. The proceedings are still pending.

Law - Article 1 of Protocol No. 1: The applicant companies had claimed not that they had a right to receive a payment but that they had a right to be released from tax liabilities by the statute of limitations, a right that in their view thus had a pecuniary value. They had argued that, before the legislative intervention in question, they had had a legitimate expectation that their tax liabilities would become time-barred. In certain circumstances, a debtor’s right to be released from his liability could be described as an “asset” and therefore as a “possession”. It was necessary, first, for this right to be sufficiently established in domestic law, such that the debtor could claim to have a “legitimate expectation” in this connection; and, second, for the reality and amount of the debt itself to be established. An expectation - however legitimate - of being released from a “potential” liability could not be regarded as a possession within the meaning of Article 1 of Protocol No. 1. The first of those conditions had been satisfied in the present case. In view of the case-law of the Court of Cassation, the applicant companies could legitimately have expected their liabilities to become time-barred, as the payment notices served on them would not have interrupted the limitation period. However, the opposite was true for the second condition. Under Belgian law, where a complaint was filed in respect of a tax payment and the “amount remaining indisputably due” was set at zero, as in the case of the applicant companies, the disputed payment could not be regarded as a liability that was “certain and of a fixed amount” and could not be recovered by enforcement procedures. In such a case, neither the reality nor the amount of the tax liability was established until the final determination of the dispute. In the present case, the proceedings brought by the applicant companies against the rejection of their complaints were still pending before the domestic courts. Accordingly, whilst the applicant companies had had a “legitimate expectation” that their tax liabilities would become time-barred, as they were merely potential liabilities the applicant companies had not been deprived of a “possession” within the meaning of Article 1 of Protocol No. 1.

Conclusion: inadmissible (incompatible ratione materiae).

The Court also declared inadmissible the complaints under Article 6 § 1 and under Article 14 of the Convention in conjunction with Article 1 of Protocol No. 1.

 

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