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1. The author of the
communication is Mr. M. de Vos, a Dutch national born in 1967. He claims to
be a victim of violations by the Netherlands [FN1] of article 26 read alone
and in conjunction with article 2, paragraph 3, of the Covenant. He is
represented by counsel, Mr. M.W.C. Feteris.
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[FN1] The Covenant and the Optional Protocol thereto entered into force for
the Netherlands on 11 March 1979.
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FACTUAL BACKGROUND
2.1 In 2000, the author, a tax consultant, used a company car made available
to him by his employer, an international accounting and consulting firm, to
commute between his home, which is located more than 30 kilometers away from
his workplace, and his office in Amsterdam on at least three days a week. He
also used the company car (with a catalogue price of 44,590 NLG) for private
purposes for a distance exceeding 1,000 kilometers in 2000, subject to
payment of an amount of 4,566 NLG to his employer.
2.2 Under Article 42 of the Dutch Income Tax Law (1964), employees using a
company car for private purposes must add 20 percent of the catalogue price
of the car to their taxable income. By Act of 4 July 1990, amending the
Income Tax Act, this amount was increased by an additional four percent of
the catalogue price in cases where an employee commutes between his or her
home and workplace on at least three days a week for a distance exceeding 30
kilometers (one way). At the same time, employees using a company car were
exempted from any increase of the taxable income, if they could prove that
their private use of the car does not exceed 1,000 kilometers per year.
[FN2]
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[FN2] Pursuant to the then applicable Section 6 of Article 42 of the Income
Tax Law, traffic between a commuter's home and workplace was not considered
as private use.
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2.3 By decision of 15 July 1998 concerning tax year 1994, the Supreme Court
found that the additional increase of the taxable income by four percent of
the catalogue price in cases where the private use of a company car exceeds
1,000 kilometers per year was contrary to article 26 of the Covenant. It
considered that the extent of the private use did not constitute reasonable
and objective criteria, which would justify discrimination between
commuters, who use a company car for more than 1,000 kilometers per year and
commuters who use it for less than 1000 kilometers per year. However, it
found that to make the relevant provision of the Income Tax Act inoperative
would result in unequal treatment of employees without a company car, who
frequently commute between their home and their workplace for distances
exceeding 30 kilometers, and for whom the tax allowance for commuters had
been capped for environmental purposes by the Act of 4 July 1990. The only
way to ensure equal treatment of all employees frequently commuting for a
distance exceeding 30 kilometers would be the non-application of all
provisions on the capping of the tax allowance for commuters introduced by
the Act. Such a consequence would, however, be disproportionate under
article 26 of the Covenant. The Supreme Court concluded that it was for the
legislator rather than the judiciary to remove this inequality, and that the
fact that a new Income Tax Bill was soon to be submitted to Parliament
showed that the legislator was in the process of resolving the problem.
2.4 Subsequently, the Government rejected the advice of the Council of State
to bring Dutch tax legislation into conformity with article 26 of the
Covenant by 1999, arguing that it was preferable to withhold any measures
until the adoption of a general reform of the income tax legislation. On 1
January 2001, a new Income Tax Act entered into force, removing the disputed
provisions of the Act of 4 July 2000.
2.5 On 11 April 2001, the tax inspector of 's Gravenhage assessed the
author's tax declaration for 2000, adding an amount of 10.701 NLG (24
percent of the company car's catalogue price of 44,590 NLG) to his taxable
income and deducting the 4,566 NLG that the author had paid to his employer
for the private use of the company car. The net addition to his taxable
income was thus 6,135 NLG.
2.6 On 24 January 2001, the Supreme Court dismissed the complaint filed by
another taxpayer, who claimed that the tax legislation should have been
amended earlier. It considered that it was not unreasonable for the
legislator to postpone the amendment of the legislation in order to resolve
the issue as part of a general tax reform.
THE COMPLAINT
3.1 The author claims that the fact that his taxation for the year 2000 was
higher than that of other employees commuting with a company car on at least
three days a week for a distance exceeding 30 kilometers (one way), merely
because his private use of the car exceeded 1,000 kilometers, amounts to
discrimination. The extent of his private use of the car could not justify
his unequal treatment, given that other long-distance commuters using a
company car equally polluted the environment, even if their private use of
the car did not exceed 1,000 kilometers per year.
3.2 The author argues that the fact that another group of taxpayers, i.e.
employees using other means than a company car to commute between their home
and workplace on at least three days a week for a distance exceeding 30
kilometers (one way), had been adversely affected by the capping of the tax
allowance for commuters, does not change the discriminatory nature of his
taxation.
3.3 For the author, the combined effect of the application of the
discriminatory provisions of the Act of 4 July 1990 to his case and of the
Supreme Court's decision not to interfere in similar cases, despite its
obligation under article 2, paragraph 1, to respect and to secure the rights
recognized in the Covenant, amounts to a violation of article 26 of the
Covenant.
3.4 The author adds that the absence of any remedy, other than a merely
declaratory judgment of the Supreme Court which did not require the
legislator or the executive to take any immediate measures to respect the
Covenant, breached his right to an effective remedy under article 26, read
in conjunction with article 2, paragraph 3, of the Covenant.
3.5 On exhaustion of domestic remedies, the author submits that a complaint
to the Supreme Court would have been futile, in the light of its
jurisprudence on similar cases, and that no other remedies are available to
him under Dutch law.
3.6 The author claims compensation for the pecuniary damage suffered because
of his discriminatory taxation. He argues that he should have been treated
equally with the privileged group of taxpayers which had been exempted from
the additional four percent increase of the taxable income. The difference
between the income tax paid by him in 2000 and the tax that he would have
paid, had he been treated on an equal footing with the privileged group,
should be reimbursed to him with statutory interests.
STATE PARTY'S OBSERVATIONS ON ADMISSIBILITY AND MERITS AND AUTHOR'S COMMENTS
4.1 On 23 October 2003, the State party submitted its observations on the
admissibility and merits of the communication. While conceding that the
author was not required to exhaust domestic remedies in the light of the
Supreme Court's jurisprudence on similar cases, the State party argues that
his claim under article 26 of the Covenant is inadmissible ratione personae
under article 1 of the Optional Protocol [FN3] and that, in any event, his
claims under articles 26 and 2, paragraph 3, of the Covenant are unfounded.
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[FN3] The author refers to the European Court's jurisprudence in Auerbach v.
The Netherlands, Application No. 45600/99, Decision on admissibility adopted
on 29 January 2002 and Arends v. The Netherlands, Application No. 45618/99,
Decision on admissibility adopted on 29 January 2002.
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4.2 The State party submits that the Supreme Court's finding that the
relevant provisions of the Act of 4 July 1990 were incompatible with article
26 of the Covenant, together with its instruction that the legislator amend
these provisions, afforded the author adequate redress. Another option to
remedy this incompatibility would have been to treat all taxpayers equally.
However, the imposition of identical charges on commuters, whose private use
of a company car did not exceed 1,000 kilometers per year, would only have
resulted in higher taxation of this group, without improving the author's
situation. The State party concludes that the author cannot claim to be a
victim within the meaning of article 1 of the Optional Protocol and that his
claim under article 26 is therefore inadmissible ratione personae.
4.3 Subsidiarily, the State party submits that the increase of the author's
taxable income by an additional four percent of the catalogue price of the
company car did not violate article 26. The purpose of the Act of 4 July
1990 was to reduce commuter traffic, especially by car, for environmental
reasons and in order to decongest road traffic in a densely populated
country, the Netherlands. The legislative process leading to the adoption of
the Act involved a careful examination of the available options to achieve
this purpose. The proposed amendments were considered necessary to spread
the financial burden equally among taxpayers, i.e. to ensure that employees
frequently commuting by company car between their home and workplace for a
distance exceeding 30 kilometers (one way) would make a financial sacrifice
comparable to the capping of the tax allowance for commuters using their own
car or public transport.
4.4 The State party argues that the small group of employees frequently
commuting by company car for a distance exceeding 30 kilometers (one way),
who bother to keep all records of the use of a company car to prove that
their private use does not exceed 1,000 kilometers per year, is so
insignificant that it cannot serve as a justification for abandoning the
important social objective pursued by the imposition of charges on other
long-distance commuters. Reasons of legal certainty militated against
removing the privilege enjoyed by this group retroactively.
4.5 For the State party, accepting minor inequalities when elaborating a
coherent body of tax legislation to strike a balance between the interests
of different groups of taxpayers does not amount to a violation of article
26, if such inequalities only have negligible financial consequences for
those concerned.
4.6 With regard to article 2, paragraph 3, the State party submits that
objections to tax assessments can be lodged with the Dutch tax and customs
administration, whose decisions are subject to appeal to the Court of Appeal
and to further appeal on law to the Supreme Court. The author had been
provided an effective remedy, as the alleged inequality of treatment had
been ascertained in national proceedings and was later removed by the
legislator. Insofar as the author claims that the Supreme Court's
jurisprudence precluded him from recovering the amount by which his tax
assessment exceeded the taxation of other commuters, whose private use of a
company car did not exceed 1,000 kilometers per year, the State party argues
that article 2, paragraph 3, does not guarantee a specific outcome of the
remedy in place.
5.1 On 7 January 2004, the author commented on the State party's submission,
rejecting the argument that one possibility to remove the inequalities from
the Act of 4 July 1990, i.e. elimination of privileges enjoyed by a certain
group of taxpayers, would not have changed the applicant's situation. He
argues that, ultimately, any discrimination can be undone by downgrading the
position of the group that is treated more favourably. This was, however,
not intended by the Covenant and impracticable in cases where definite tax
assessments could not be increased retroactively.
5.2 For the author, the mere finding of incompatibility of a law with
article 26 cannot remove the underlying discrimination, if no effective
redress is granted to victims of such discrimination. The subsequent removal
of inequalities from the legislation through the tax reform of 1 January
2001 did not change the fact that the Covenant had been and continued to be
violated in the meantime. By ratifying the Covenant the State party had
undertaken to respect and ensure its guarantees with immediate effect.
5.3 While conceding that the reduction of commuter traffic was a legitimate
policy objective, the author argues that this purpose cannot be pursued by
discriminatory measures. He argues that the tax law reform of 2001 refutes
the State party's argument that the inequalities in the Act of 4 July 1990
were necessary to elaborate a coherent body of tax legislation. Consistency
with article 26 could have been ensured by increasing the taxable income of
all commuters using a company car, who live more than 30 kilometers from
their workplace, by four percent of the car's catalogue price, irrespective
of the extent of their private use of the car. It was irrelevant in this
context whether such an increase could have been introduced retroactively
and whether it would have had any beneficial effect for the author. The
limited size of the privileged group could not justify the unequal
treatment, given that under tax legislation, privileges are frequently
granted to a small group of taxpayers only.
5.4 The author rejects that his discriminatory taxation was negligible, as
the extra amount of tax paid by him totaled some 450 US$ in 2000.
Unjustified distinctions were unacceptable, even if their financial impact
was limited. Nor should distinctions in the field of tax law be accepted
more easily than in other fields of legislation, bearing in mind the
Committee's jurisprudence that article 26 prohibits discrimination in any
field regulated and protected by public authorities.
ISSUES AND PROCEEDINGS BEFORE THE COMMITTEE
6.1 Before considering any claim contained in a communication, the Human
Rights Committee must, in accordance with rule 93 of its rules of procedure,
decide whether or not the communication is admissible under the Optional
Protocol to the Covenant.
6.2 With regard to the author's claim that the increase of his taxable
income by four percent of the catalogue price of the company car used by
him, merely because his private use of the car exceeded 1,000 kilometers,
was discriminatory, in violation of article 26 of the Covenant, the
Committee considers that the author has not substantiated how his different
treatment was based on one of the prohibited grounds of discrimination
enumerated in article 26, or on any comparable "other status" referred to in
that article. [FN4] Consequently, this part of the communication is
inadmissible under article 2 of the Optional Protocol.
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[FN4] See Communication No. 273/1988, B.d.B. et al v. The Netherlands,
decision on admissibility adopted on 30 March 1989, at para. 6.7.
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6.3 With regard to the alleged absence of an effective remedy, the Committee
recalls that for purposes of the Optional Protocol, article 2 of the
Covenant can only be invoked in conjunction with a substantive Covenant
right. It notes that the author invoked article 2, paragraph 3, in
conjunction with article 26 of the Covenant. However, his claim under
article 26 being inadmissible because of the failure of the author to
establish its applicability, it follows that his claim under article 26,
read in conjunction with article 2, paragraph 3, is likewise inadmissible.
The Committee therefore concludes that this part of the communication is
inadmissible ratione materiae under article 3 of the Optional Protocol.
7. Accordingly, the Human Rights Committee decides:
a) That the communication is inadmissible under articles 2 and 3 of the
Optional Protocol;
b) That this decision shall be communicated to the State party and to the
author.
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Adopted in English, French and Spanish, the English text being the original
version. Subsequently to be issued also in Arabic, Chinese and Russian as
part of the Committee's annual report to the General Assembly. |
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