CEDH · CASELAW;COMMUNICATEDCASES;ENG — 15 septembre 2017

.s800EAC49 { font-size:12pt } .sA6BC7FA7 { margin-top:0pt; margin-bottom:0pt; text-indent:14.2pt; text-align:right } .sBB9EE52A { font-family:Arial } .s9793A85B { margin-top:0pt; margin-bottom:0pt; text-indent:14.2pt } .s5E1364CA { margin-top:0pt; margin-bottom:12pt; text-align:center; page-break-inside:avoid; page-break-after:avoid; font-size:14pt } .s8229ABDD { margin-top:0pt; margin-bottom:12pt; text-align:center } .s68C46B95 { margin-top:36pt; margin-bottom:12pt; text-align:center } .s3F59B822 { font-family:Arial; font-weight:bold; text-transform:uppercase } .sA8776625 { margin-top:18pt; margin-left:29.2pt; margin-bottom:12pt; text-indent:-17.6pt; page-break-inside:avoid; page-break-after:avoid } .s29100277 { font-family:Arial; font-weight:bold } .sA36B60A1 { font-family:Arial; font-style:italic } .s72C8F48C { margin-top:12pt; margin-left:36.6pt; margin-bottom:6pt; text-indent:-15.05pt; page-break-inside:avoid; page-break-after:avoid } .sA20670C4 { margin-top:12pt; margin-left:48.75pt; margin-bottom:6pt; text-indent:-17pt; page-break-inside:avoid; page-break-after:avoid; font-size:10pt } Communicated on 15 September 2017   THIRD SECTION Application no. 69746/14 Andrey Vladimirovich YARKOV against Russia lodged on 2 October 2014 SUBJECT MATTER OF THE CASE A.     Facts As part of an inspection of the applicant’s business the tax officials interviewed several people and put their testimonies in writing. On 9   January 2013 the tax authority found the applicant guilty under Article   119 of the Tax Code and imposed a fine of 4,337,424 Russian roubles (RUB). The applicant was also ordered to pay RUB 54,506,668 in arrears for the value added tax; RUB 14,779,956 in arrears for the income tax; RUB   3,868,719 in arrears for the social contribution, as well as RUB   10,382,325 as a penalty ( пени ) for the unpaid taxes. On 22   January 2013 the supervising tax authority upheld the decision. The reviewing court then refused examination of the previously interviewed people and three witnesses on behalf of the defence. On 12   December 2013 the court upheld the tax authorities’ decisions in substance, while reducing the above amounts. The court referred, inter alia , to the written testimonies made during the inspection. The appeal court also refused examination of the adverse witnesses and the witnesses on behalf of the defence. On 11   March 2014 the appeal court heard the applicant and his lawyers and pronounced its decision dismissing the appeal. The full text of the appeal decision was made available on 17 March 2014 (which is deemed to be the delivery date for the appeal decision). On 22 July 2014 a cassation appeal was dismissed. B.     Relevant domestic law and practice 1.     Tax offences Article 119 of the Tax Code of 1998 provided at the material time that the failure to submit a tax declaration within the prescribed period of time was punishable by a fine of 5% of the arrears for each month following the deadline for submitting the declaration. The actual amount could not be less than RUB 1,000 and could not exceed 30% of the arrears. Article 122 of the Tax Code provided at the time that failure to pay the tax in full or in part, following the incorrect calculations or another unlawful action or inaction, was punishable by a fine of 20% of the arrears. 2.     Penalty for tax offences and surcharges (a)     Surcharge Article 75 of the Tax Code defined a “surcharge” as a sum of money to be paid for paying the tax much later after the prescribed deadline, in addition to and independently from the tax arrears due and any penalty imposed for a tax offence. The surcharge is calculated for each day of the delay in payment following the payment deadline. The surcharge is calculated as a percentage from the tax arrears; this percentage amounted to a 1/300 of the special rate set by the Central Bank of Russia. A surcharge is aimed at compensating the damage caused to the State by the payer’s failure to comply with his or her obligation to pay taxes within the prescribed time-limit (ruling no. 20-P of 17 December 1996 by the Constitutional Court; decision no. 202-O of 4 July 2002). Unlike the surcharge, a fine is a form of punishment for a tax offence (ibid.). Since the surcharge is a measure aimed at restoring legality ( правовосстановительный характер ) by way of compelling the payer to honour his or her obligation before the State, recourse to such measure does not prevent, per se , a possibility to apply a measure of responsivity for a tax offence, namely a fine (decision no. 1572-O-O of 7 December 2010 by the Constitutional Court). The above means, for instance, that being an accessory measure, the surcharge cannot (can no longer) be levied where there is no (or no longer) an obligation to pay the tax or where the time-limit for claiming payment of the tax has expired (decision no.422-O of 17   February 2015). (b)     Penalty Russian law provides for three types of legal liability for unlawful actions or inaction in relation to payment of taxes and other mandatory contributions. Articles 116-129.6 of the Tax Code listed various tax offences. Article   114 of the Tax Code defined at the time a “penalty” as a measure of responsibility for the tax offence and named one such penalty, a fine. The Code of Administrative Offences and the Criminal Code also contained provisions relating to offences relating to taxation. 3.     Procedural matters Article 89 of the Tax Code provides the tax authorities with a possibility to carry out on-spot tax inspections. Article 90 of the Tax Code provides that a tax official is empowered to interview any person who may have pertinent information. Having examined the report resulted from a tax inspection, the chief officer of the tax authority issues a decision to engage the tax payer’s liability (Article 101 of the Tax Code). This decision should present a statement of relevant facts; the tax payer’s arguments for his defence and the replies to such arguments (ibid.). Article 200 of the Code of Commercial Procedure requires the administrative authority to prove that the impugned legal act is legal, including by way of submitting to the reviewing court evidence that was not disclosed during the preceding non-judicial proceedings (decision no. 614-O of 24 March 2015). QUESTIONS tO THE PARTIES 1.     Was the civil or criminal limb of Article 6 of the Convention applicable to the proceedings (including the inspection, the non-judicial proceedings resulting the decisions of 9 and 22 January 2013 and the ensuing judicial ‑ review proceedings) (see OAO Neftyanaya Kompaniya Yukos against Russia (dec.), no.   14902/04, § 453, 29 January 2009, and the jurisprudence of the Russian Constitutional Court cited above)?   2.     Did the applicant have a fair trial? In particular, was there a violation of Article 6 of the Convention on account of the absence of an opportunity for the applicant to examine or have examined witnesses against him and witnesses on behalf of the defence? Did the applicant have another adequate opportunity to effectively challenge the adverse testimonies obtained during the tax inspection?