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" 30- ( 4985/12), - ( 13- ) "


Complaint to the Constitutional Court requesting that the words in the amount of 30 percent in article 224, section 3 of the Tax Code of the Russian Federation, as applied to nonresident citizens of the Russian Federation, be declared unconstitutional

 

29.10.2010

 

   Complaint  to  the  Constitutional Court requesting that the words "in
   the amount of 30 percent" in article 224, section 3 of the Tax Code of
   the  Russian  Federation,  as  applied  to nonresident citizens of the
   Russian Federation, be declared unconstitutional

                              29 October 2010

               Constitutional Court of the Russian Federation

         Address: 190000, Saint Petersburg, Senatskaya ploschad', 1

                                Complainant:

                                  Address:

                          Representative: counsel

                                  Address:

    Statute being contested: the words "in the amount of 30 percent" in
    article 224, section 3 of the Tax Code of the Russian Federation, as
         applied to nonresident citizens of the Russian Federation

                    Published in the following editions:

    Sobranie Zakonodatel'stva RF ("Collected Legislation of the Russian
            Federation"), 5 December 1994, No. 32, article 3301

     Rossiyskaya Gazeta ("Russian Newspaper"), Nos. 238-239, 8 December
                                    1994

                            Statute adopted by:

        State Duma of the Federal Assembly of the Russian Federation

                     Address: Moscow, Okhotnyy Ryad, 1

                                 Complaint

     requesting that the words "in the amount of 30 percent" in article
    224, section 3 of the Tax Code of the Russian Federation, as applied
       to nonresident citizens of the Russian Federation, be declared
                              unconstitutional

   I  am  a  citizen  of the Russian Federation and my place of permanent
   residence  is  in  Russia.  From  1 October 2005 to 18 July 2009 I was
   enrolled  in  a course of study in the United Kingdom of Great Britain
   and  Northern  Ireland.  I  returned  to  Russia in April 2008 for the
   purpose  of  delivering  a course of lectures in the Ural Institute of
   Economics,  Management, and Law. In calculating my wage for the course
   that I taught, a 30 percent income tax was withheld, with reference to
   article  224,  section  3  of  the  Tax Code of the Russian Federation
   (hereinafter:  Tax  Code).  I  believe that this was a violation of my
   right to use of property and discrimination against me on the basis of
   my place of residence.

   The  reason  for  my  application  to  the Constitutional Court of the
   Russian  Federation is the uncertainty as to whether the words "in the
   amount of 30 percent" in article 224, section 3 of the Tax Code of the
   Russian  Federation (hereinafter: Tax Code), as applied to nonresident
   citizens  of  the  Russian Federation, comply with the Constitution of
   the  Russian Federation and the Convention for the Protection of Human
   Rights and Fundamental Freedoms.

   According  to the aforementioned rule, the rate of taxation applied to
   all income of natural persons who are not tax residents of the Russian
   Federation  is  set  at the amount of 30 percent, while the income tax
   rate  applicable  to resident citizens of the Russian Federation under
   section 1 of the same article is 13 percent.

   I believe that the words "in the amount of 30 percent" in article 224,
   section  3  of the Tax Code, as applied to nonresident citizens of the
   Russian  Federation,  contradicts  article  15,  part  1;  article 19;
   article  35, part 2; and article 55, parts 2 and 3 of the Constitution
   of the Russian Federation.

    1. VIOLATION OF PROPERTY RIGHTS

   The  disputed  standard  restricts  my  property  rights secured under
   article  35,  part 2 of the Constitution of the Russian Federation and
   article  1 of Protocol 1 to the Convention for the Protection of Human
   Rights and Fundamental Freedoms (hereinafter: Convention).

   The  30  percent  tax was withheld in violation of the Constitution of
   the  Russian  Federation,  the  Convention for the Protection of Human
   Rights  and  Fundamental  Freedoms,  and  principles  of tax law. This
   amounts to a violation of my property rights.

   The imposition of the income tax at the 30 percent rate instead of the
   13 percent rate deprived me of the right to use the 17 percent part of
   my wage that was withheld per section 3, article 224 of the Tax Code.

   Depriving  me  of  the  right  to  use  17%  of my wage is an unlawful
   withholding  of  my  funds,  and  inevitably  affects the interests of
   society.

   The  law's  restriction  of  my  right  to  use  my  property  must be
   proportionate.  In Sporrong and Loennroth v. Sweden, 23 September 1982
   (A  52 (1982)), the European Court of Human Rights (hereinafter: ECHR)
   formulated   the   following   important   principle   regarding   the
   justifications  for  intervention: "The court must determine whether a
   fair  balance  between  the  interests  of  society and the conditions
   necessary  for  protection  of the individual's fundamental rights was
   observed. . . . An aspiration to achieve such a balance is peculiar to
   the  Convention  for  the  Protection  of Human Rights and Fundamental
   Freedoms as a whole, and is also reflected in the structure of article
   1 of Protocol 1 of the Convention."

   Deprivation  of  the  right  to  use  17  percent of my wage cannot be
   considered  a  necessary  condition  for  the defense of human rights.
   Rather, it is a violation of human rights, and it does not further the
   objective  of  achieving  a  fair  balance between the requirements of
   society's interests and the conditions necessary for the protection of
   the fundamental rights of the individual.

    2. VIOLATION OF THE RIGHT TO EQUAL TREATMENT

   Article  19,  part  2  of  the  Constitution of the Russian Federation
   establishes that "the state guarantees equality in rights and freedoms
   of persons and citizens regardless of . . . their place of residence."

   According  to  article  35,  part 2 of the Constitution of the Russian
   Federation,  "Each  person  has the right to own property, to possess,
   use, and dispose of it both individually and jointly with others."

   According  to  article  55,  part 3 of the Constitution of the Russian
   Federation,  "The  rights  and freedoms of persons and citizens may be
   restricted by federal law only to the extent necessary for the purpose
   of protecting the foundations of the constitutional order, morals, the
   health, rights, and legal interests of other persons, the provision of
   the  country's  defense  and  national  security,"  but  the  disputed
   standard does not pursue those goals indicated in the Constitution.

   I am a citizen of Russia. A 30 percent income tax was imposed on me in
   connection  with my departure from the Russian Federation for the time
   of my studies, which lasted over six months.

   Thus,  the  criterion  chosen  by  the  legislature for distinguishing
   persons  by  applying  different tax rates depending on their place of
   residence  is  discriminatory,  since  it  is based not on an economic
   criterion,  but depends on location, and contradicts the Constitution,
   as  well  as the provisions of the Tax Code, the principle of equality
   of  taxation  established  in  article  3, sections 1 and 2 of the Tax
   Code, which itself follows from article 8, part 2; article 19, part 1;
   and article 57 of the Constitution of the Russian Federation.

   The  words  "in the amount of 30 percent" in article 224, section 3 of
   the  Tax  Code,  as  applied  to  nonresident  citizens of the Russian
   Federation, also violates article 14, "Prohibition of discrimination,"
   of  the  Convention for the Protection of Human Rights and Fundamental
   Freedoms.  According to that article, "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."

   The list of grounds for discrimination enumerated in article 14 of the
   Convention  is  not exhaustive. This is particularly apparent from the
   words  "or  other  status."  Discrimination  on  the basis of place of
   residence  amounts  to  discrimination  on  the  basis  of such "other
   status."

   "Article   14   (art.   14)   is   concerned  with  the  avoidance  of
   discrimination  in the enjoyment of the Convention rights in so far as
   the  requirements of the Convention as to those rights can be complied
   with  in  different  ways.  The  notion  of  discrimination within the
   meaning  of  Article  14  (art.  14) includes in general cases where a
   person  or  group  is  treated,  without  proper  justification,  less
   favourably  than another, even though the more favourable treatment is
   not  called  for  by  the  Convention." Case of Abdulaziz, Cabales and
   Balkandali v. the United Kingdom, paragraph 82.

   The  legislature's  discretion  in  determining  tax  control  is  not
   unlimited.  Discretion  is applicable only for the purpose of ensuring
   that  taxpayers  comply  with  their  obligations.  In particular, the
   legislature cannot establish discriminatory conditions (e.g. permanent
   residence  in  the  Russian  Federation)  that impinge upon taxpayers'
   constitutional rights (e.g. property rights).

   The  principal  aim of the law in a democratic state based on the rule
   of  law is to secure justice. Other objectives are subordinate to this
   principal  aim.  These  include effective tax administration for which
   the   enactment   of   unjust   laws   is  unacceptable.  A  law  that
   disproportionately  restricts  the  basic rights of the individual and
   property  rights  on the basis of temporary place of residence will be
   considered  unjust.  Thus,  a  representative of the State Duma of the
   Russian  Federation must prove that the state's application of a legal
   restriction  to  property  rights  by  applying  an income tax rate to
   nonresident  Russian  citizens 17 percent higher than the rate imposed
   on   resident   Russian   citizens   aims   at  a  lawful  purpose.  A
   representative  of the State Duma of the Russian Federation must prove
   that  such a restriction is commensurate with its purpose and complies
   with the principle of fair balance.

   It  follows  from  the  foregoing  arguments  that  my right to use my
   property  was  violated under the tax law rule that causes the rate at
   which  citizens  of the Russian Federation pay income tax to depend on
   their  place  of residence. The words "in the amount of 30 percent" in
   article  224,  section  3  of  the Tax Code, as applied to nonresident
   citizens  of  the Russian Federation, violates not only my rights, but
   also  the  rights of all persons subject to this rule. In other words,
   the rule violates the rights of an unlimited number of people.

   On  the basis of the foregoing, pursuant to article 125, part 4 of the
   Constitution of the Russian Federation, articles 3, 36, 74, 96, and 97
   of  the  Federal Constitutional Law On the Constitutional Court of the
   Russian Federation,

   I hereby request that:

   The  words  "in the amount of 30 percent" in article 224, section 3 of
   the  Tax  Code  of  the  Russian Federation, as applied to nonresident
   citizens  of  the  Russian  Federation,  be  declared  in violation of
   article 8, part 2; article 15, part 1; article 19; article 35, part 2;
   and  article  55,  parts  2  and  3 of the Constitution of the Russian
   Federation,  as  well as article 1 of Protocol 1 to the Convention for
   the Protection of Human Rights and Fundamental Freedoms in conjunction
   with  article  14 of the Convention for the Protection of Human Rights
   and Fundamental Freedoms.

   ATTACHMENTS:

    1. Document  confirming  my  presence  from 1 October 2005 to 18 July
       2009  in  the United Kingdom of Great Britain and Northern Ireland
       while I was enrolled in a course of study (3 copies).

    2. Statement   of  income  of  natural  person  for  2008,  from  the
       accounting   department   of  the  Ural  Institute  of  Economics,
       Management, and Law, indicating withholding of a 30 percent income
       tax (3 copies).

    3. Copy of complaint (3 copies).

    4. Receipt of payment of state duty (100 rubles) (3 receipts).

    5. Counsel's power of attorney (3 copies).

   ____________________, 2010


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