12 May 2005 № D-185/2005
The Constitutional Court of the Republic of Belarus comprising of the Presiding Officer - Chairman of the Constitutional Court G.A. Vasilevich, Deputy Chairman A.V. Maryskin, judges T.S. Boiko, K.I. Kenik, V.V. Podgrusha, A.G. Tikovenko, R.I. Filipchik, G.B. Shishko, has examined on the grounds of Article 40 and part one of Article 116 of the Constitution of the Republic of Belarus applications of citizens on the constitutionality of legislation regulating the issues of taxation of the sums of compensation for moral injury of natural persons.
Having studied the relevant provisions of the Constitution, Civil and Tax Codes, Law "On income tax from natural persons" and other enforceable enactments, the Constitutional Court found the following.
Under part two of Article 60 of the Constitution to defend their rights, liberties, honour and dignity, citizens shall be entitled in accordance with the law to recover, through the courts, both property damage and financial compensation for moral injury.
Injury caused to a person or to the property of a citizen in accordance with part one of point 1 of Article 933 of the Civil Code (hereinafter is also referred to as CC) shall be subject to compensation in full by a person who caused injury. Grounds and the rate of compensation for moral injury caused to a citizen shall be specified by the rules stipulated in Chapter 58 and Article 152 of CC (point 1 of Article 968 of CC). According to Articles 152 and 970 of CC the compensation for moral injury shall be carrying out in money form. The rate of the compensation shall be fixed by the court depending on the character of the caused to the victim physical and moral sufferings, as well as on the guiltiness degree of the inflicter of the injury in instances when the guilt is the ground for injury compensation. By fixing the rate of compensation for the injury there must be taken into account the requirements of reasonableness and fairness. The character of physical and mental sufferings shall be estimated by the court taking into account the factual circumstances under which the moral injury was inflicted, as well as individual peculiarities of the victim.
The Constitutional Court notes that civil legislation of the Republic of Belarus contains the legal norms regulating relations as regards compensation for moral injury and specification by the court of the rate of its compensation.
According to sub-item 1.35 of point 1 of Article 3 of the Law "On income tax from natural persons" (hereinafter is also referred to as the Law) there are not subject to taxation all the stipulated by the legislation of the Republic of Belarus types of compensatory outpayments within the rates fixed by the legislation of the Republic of Belarus (except compensation for unused leave, compensation for use of means of transportation, equipment, instruments and devices belonging the worker), including those related to:
performance by a natural person of labour duties (including relocation and compensation for travel allowance). By paying the worker of travelling expenses both within and out of the country, the taxable income shall not include the daily allowance within the rates fixed by the Ministry of Finance of the Republic of Belarus, as well as actually made and documentary confirmed purpose expenses connected with official business trips;
compensation for injury caused as a result of unlawful actions of the bodies of inquiry, preliminary investigation, prosecutor's office, court;
compensation for injury in case of disablement connected with mutilation or other injury to health, as well as due to loss of a breadwinner;
free granting dwellings and rendering communal services;
payment of the cost and (or) issue of due natural allowance, as well as payment of money instead of the natural allowance in question;
payment of the cost of food, sports goods, equipment, sports kit and uniform, obtaining by the sportspersons and workers of physical training organizations for educational and practice process and participation in sports contests;
death, registration of disablement connected with performance of official duties and or disability as a result of wounding, contusion, severe injury, servicemen, officers and the ranks of the bodies of internal affairs, bodies of financial investigations, emergency bodies and subdivisions or civil servants while performing by them of their official duties.
Study of law enforcement practice signifies that the sums of financial compensation for moral injury with the exception of the listed directly in the Law instances of compensation for the injury in question are considered by the tax bodies as the subject to taxation as "other income". Such a procedure of taxation of the sums paid for the citizens as compensation for moral injury is envisaged by point 48 of Instruction on procedure of calculation and payment of income tax from natural persons approved by Resolution of the Ministry on Taxes and Dues of the Republic of Belarus of 20 February 2002 No. 16.
The Constitutional Court deems that the existing practice where there are sums of compensation for moral injury which are subject to taxation, and there are other sums which are not subject thereto is not fully grounded on the provisions of the Law, because the distinction in taxation of the sums of compensation for moral injury depending on circumstances which were the reasons of its compensation shall not follow directly from the norms of the Law "On income tax from natural persons". In the opinion of the Constitutional Court, this practice is the result of use in the Republic of Belarus of multi-valued wording: "within the limits of rates specified by the legislation of the Republic of Belarus".
The Constitutional Court pays attention to the fact that the purpose of the compensation for moral injury is not a profit making one, but shall be the compensation for the moral and physical suffering caused.
Under Articles 97, 98 of the Constitution the right to official interpretation of laws shall have the National Assembly of the Republic of Belarus. The Parliament shall be entitled to set the republican taxes and dues, including specification not only the essential elements of the tax, but also the privileges as regards its calculation and payment.
Message of the Constitutional Court of the Republic of Belarus "On constitutional legality, 2004" emphasizes that the high level of quality of the legislation shall presuppose the absence in it of any ambiguity and that is the necessary condition of unique understanding of legal norms and their practical application.
Guiding by Article 40 of the Constitution, Articles 7, 36, 38, 40, 40
RULED:
1. To propose the House of Representatives of the National Assembly of the Republic of Belarus to take the measures on improvement of the norms of the Law of the Republic of Belarus "On income tax from natural persons" which regulate taxation of compensation for moral injury and practice of their application by way of interpretation of the given Law or making in it alterations for exclusion of multi-valued understanding and application of the specified norms for the purposes of more full protection of the rights of citizens.
2.The present Decision shall come into legal force from the date of adoption.
3. To publish the present Decision in accordance with the legislation.
Presiding Officer —
Chairman of the
of the