8 November 2004 № D-179/2004
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.A. Sarkisova, A.G. Tikovenko, R.I. Filipchik, G.B. Shishko, V.Z. Shuklin, on the grounds of part four of Article 122 of the Constitution of the Republic of Belarus has examined applications of citizens on verification of constitutionality of point 21 of Minsk oblast Council of deputies of 21 January 2004 No. 34 "On budget of the Republic of Belarus for 2004" in part of recommendations for region and city Councils of deputies to increase the rates of the land tax, for Minsk region Council of deputies - to fix the rates of the land tax in the territory of the region, taking into account the rates of the land tax which are effective in the city of Minsk, as well as on unlawfulness of referring by the Ministry of Taxes and Dues of the Republic of Belarus of the lands of gardening partnerships for the purposes of imposition by the land tax to the category of the lands of industry, transport, communication service, power engineering, defense and for other purposes.
Having analyzed the relevant provisions of the Constitution of the Republic of Belarus, Land Code of the Republic of Belarus, General Part of the Tax Code of the Republic of Belarus, the Law of the Republic of Belarus "On payments for land", acts of the Ministry on Taxes and Dues of the Republic of Belarus, Decisions of Minsk oblast and Minsk regional Councils of deputies, other enforceable enactments which are relevant to the issues under consideration, practice of their application, the Constitutional Court found the following.
1. Point 2 of Article 50 of the Law "On budget of the Republic of Belarus fro 2004" stipulates that local Councils of deputies in 2004 shall have the right to increase (reduce) the rates, to alter the term of payment of the land tax for certain categories of payers, as well as to grant certain payers - natural persons who are not individual entrepreneurs the privileges as regards payment of the land tax. At the same time, the rates of the land tax with respect to the payers may be increased (reduced) not more than twofold.
Point 21 of Decision of Minsk oblast Council of deputies of 21 January 2004 No. 34 "On budget of oblast for 2004" has recommended region and city Councils of deputies while forming the budgets for 2004 to increase the rates of the tax for the agriculture lands not less than for 20 per cent. As for the other categories of lands there have been recommended to increase the rates of the tax land for not less than 30 per cent with further allocation of additionally received means for the development of settlements.
Decision of Minsk region Council of deputies of 30 January 2004 No. 46 "On increasing the rates of land tax and fixation of reducing coefficients for 2004" has increased for 100 per cent the rates of the land tax to the land plots granted for the citizens for keeping subsidiary small-holding, building and maintenance of the dwelling, gardening, live stock farming, hay-mowing and cattle pasture, cottage building, traditional folk trades, and in case of inheriting or acquiring a personal house (sub-item "b" point 1). Sub-tem "g" of point 2 of the specified Decision has also fixed reducing coefficients to the base rate of the land tax depending on distance of gardening partnerships from the city of Minsk: up to 5 kilometers - 0,1; from 5 kilometers up to 10 kilometers - 0,1; from 10 kilometers up to 20 kilometers - 0,1; over 20 kilometers - 0,2.
Thus, both point 21 of Decision of Minsk oblast Council of deputies of 21 January 2004 No. 34 in part of recommendations for the region and city Council of deputies to 100 per cent increase of the rates of the land tax as for other categories of lands for not less than 30 per cent and Decision of Minsk region Council of deputies of 30 January 2004 No. 46 in part of increasing of the rates of the land tax for the land plots granted citizens for gardening, cottage building were adopted within the rights granted for the Councils in question by Article 50 of the Law "On budget of the Republic of Belarus for 2004".
2. Simultaneously, point 21 of the mentioned Decision of 21 January 2004 No. 34 of Minsk oblast Council of deputies has recommended Minsk region Council of deputies to fix the rates of the land tax in the territory of the region taking into account the land tax rates which are effective in the city of Minsk.
The Constitutional Court deems that such a recommendation is in line with the Law of the Republic of Belarus of 18 December 1991 "On payments for the land" (with further alterations and addenda) which has determined the locality of the plot of land as one of the criteria for specification of the scale of payment for the plots of land.
Thus, according to part two of Article 3 of the Law "On payments for land" the scale of payment for the land shall depend on the quality and the locality of the plot of land. In accordance with Article 6 of the Law, which specifies the principles of taxation by the land tax, the scale of the land tax shall be fix depending on quality and locality of the plot of land and shall not depend on the results of economic and other activities of the landowner and land user. The scale of the land tax to agriculture lands shall be specified under the data of cadastre evaluation of the lands. The land tax shall be envisaged as annually fixed payments for a hectare of the land area. The rates of the land tax shall be subject to indexation with the use of the coefficient stipulated by the law of the Republic of Belarus on budget for the next financial year.
3. According to the Law "On payments for land" the relations on fixation, collection and use of payment for the land shall be regulated by the given Law, the Land Code of the Republic of Belarus and other legislation of the Republic of Belarus (Article 2); the object of taxation is the plot of land which is in possession, in use or in the ownership, except for the instances, specified by Articles 17-19 of the given Law (part one of Article 4). In accordance with part two of Article 4 of the Law the subjects to the land taxation shall be the following lands: lands of agriculture; lands of settlements (cities;); industry, transport, communication, defense settlements of city type and rural populated areas and of other purposes; the forestry, water funds. Payers of the land tax due to the requirements of Article 5 of the Law shall be legal and natural persons (including foreign) for whom the plots of land are granted into possession, use or into ownership.
Articles 8-15 of the Law in question shall specify the rates of the land tax on different categories of lands.
The categories of the lands are stipulated by Article 3 of the Land Code of the Republic of Belarus (hereinafter is also referred to as Land Code), under which all the lands in the Republic of Belarus in accordance with the main purpose and regardless of the forms of ownership shall be divided into: 1) agriculture lands; 2) land of settlements (cities, settlements of city type and rural populated areas), gardening partnerships and cottage building; 3) lands of industry; transport, communication, power engineering, defense and of other purposes; 4) lands of environmental protection, sanitary, recreation, history and culture purpose; 5) the forestry; 6) lands of water funds; 7) stock of lands.
Referring of the lands to the indicated categories shall be carried out in accordance with the basic purpose of the lands. Transferring of the land from one category to another shall be made in instances of alteration of the basic purpose of those lands (parts one and two of Article 4 of the Land Code).
Referring of the lands to the categories specified by the Land Code and transferring of the lands from one category to another shall be carried out by specially authorized thereto bodies.
The Constitutional Court emphasizes that the lands of gardening partnerships and cottage building equally with the lands of the settlements have been referred to the Land Code to the same category of lands.
Analysis of Article 4 of the Law "On payments for land" in its comparison with Article 3 of the Land Code shall signify that the lands of gardening partnerships and cottage building are not stipulated as an independent object of taxation. The Law "On payments for land" the lands of gardening partnerships and cottage building are referred neither to the category of the lands of settlements nor to the category of the lands of industry, transport, communication, defense and of other purposes. The Constitutional Court notes that Article 4 of the Law in question has not been corrected due to adoption of the new Land Code.
At the same time, the specified Law shall differentiate the scale of rates of the land tax depending on the category of the plots of land. Thus, Article 8 shall specify the rates of the land tax on the agriculture lands, Article 9 - on the lands of settlements, Article 10 - on the lands of industry, transport, communication, defense and of other purpose located beyond the settlements, Article 11 - on the plots of land granted citizens for keeping subsidiary small-holding, building and maintenance of the dwelling, keeping collective gardening and market-gardening, hay-mowing and cattle pasture, cottage building, traditional folk trades, and in case of inheriting or acquiring a personal house, as well as for official plots of arable lands granted citizens by regional executive and administrative bodies from among the stock lands and the lands of the forestry funds.
Moreover, as it follows from the text of Article 11 of the Law "On payments for land", in case of presence of cadastre estimation of the land the land tax shall be fixed at the rates specified in Appendix 1 to the Law in question, in case of absence of cadastre estimation of the plot of land - at the rates envisaged in Appendix 3 increased at coefficients specified in Appendix 4. In particular, in Minsk region the average rate of the land tax in Appendix 3 is fixed as 20,508 rubles for a hectare. Increasing coefficients in Appendix 3 have been fixes in the following rates: for the city of Minsk - 19,1, for the cities of regional subordination, settlements of city type, rural settlements, as well as territories located beyond the settlements - 1,6.
According to Article 6 of the Law "On payments for land" and Article 48 of the Law "On budget of the Republic of Belarus for 2004" the rates of the land tax shall be subject to indexation up to 19 per cent.
The Constitutional Court emphasizes that inconsistency of the norms of the Land Code and the Law "On payments for land" as regards the lands of gardening partnerships and cottage building has been resulted in the fact that in practice the tax bodies shall calculate the land tax depending on the subject having the plots of land in ownership, in possession, in use.
Position of the Ministry on Taxes and Dues as regards the issues under consideration is stated in the instruction on the procedure of calculation and payment of the land tax by the natural persons approved by Resolution of the State Tax Committee of the Republic of Belarus of 27 February 2001 No. 23 with further alterations and addenda (hereinafter is also referred to as Instruction No. 23), as well as in the Instruction on the procedure of calculation and paying of payments for the land by the legal persons approved by Resolution of the Ministry on Taxes and Dues of the Republic of Belarus of 31 January 2004 No. 21. Thus, part two of point 4 of Instruction No. 23 stipulates that the natural persons - members of gardening partnerships are the payers of the land tax, if the plots of land are granted them directly by the region executive and administrative body into life possession or into the ownership.
The reply of the Ministry on Taxes and Dues of 19 October 2004 No. 2-3-6/8328 to the request of the Constitutional Court stipulates that "for the plots of land granted into possession, use and into ownership within the settlements (cities, city, health-resort, workmen's settlement, rural populated areas) (including by gardening partnerships) the land tax shall be calculated in accordance with Article 9 of the Law. As for the plots of land granted into possession, use and into ownership outside the settlements (gardening partnerships included), the land tax shall be calculated in accordance with Article 10 of the Law. As for the plots of land granted the members of a gardening partnership (cooperative) as the natural persons into life inherited possession, private ownership, the land tax shall be calculated in accordance with Article 11 of the Law.
The letter of Inspection of the Ministry on Taxes and Dues of 26 February 2004 No. 02-01-09/69 within Minsk oblast "On calculation of the land tax in 2004" forwarded by modem communication service to the Inspections of the Ministry on Taxes and Dues within the cities and regions as regards gardening partnerships explains that the rates of tax stipulated by Article 11 of the Law "On payments for land" shall be applicable in instances, if the plot of land is allocated for the natural person into private ownership. Gardening partnerships shall fix the payment for the land of common use and for the lands, which are in use of the members of gardening partnerships, at the rates in accordance with Article 10 of the Law "On payments for land" specified for the lands of industry, transport, communication service as well as for other purposes.
The Constitutional Court emphasizes that Article 11 of the Law "On payments for land" as for the collective gardening and cottage building is about the land tax on the plots of land granted citizens for keeping collective gardening, cottage building. Article 11 of the Law has this wording after the enforcement of the Land Code. It contains the terms and notions used in the Code, including as applied to the collective gardening and cottage building.
In principle, this approach is in line with the provisions of Articles 72 and 73 of the Land Code, under which the plots of land for keeping the collective gardening and cottage building are granting the citizens of the Republic of Belarus.
Under the content of Articles 75 and 76 of the Land Code the lawmaker shall consider the collective gardening as the collective partnership.
As for the plots of land in common use of the members of a collective gardening, in its designated purpose they are called to serve not for the needs of a gardening partnership as a legal person, but the interests of the members of a gardening partnership, since without the use of the specified lands it is impossible to use the concrete plots of land which are in ownership, in possession or in use of certain members of the partnership.
The Constitutional Court emphasizes that Article 11 of the Law "On payments for land" shall not differentiate taxation of the lands which are in common use and taxation of the plots of land owned by the members of a gardening partnership.
Moreover, the Article in question shall not differentiate the legal ground of allocation of the plots of land for the members of a gardening partnership: as a right to use, as a right to life inherited possession or as a right of ownership. The Law speaks about the plots granted the citizens for keeping collective gardening and cottage building.
Due to that, the Constitutional Court has come to the conclusion that the lands of gardening partnerships, regardless of the fact, in whose ownership, possession, use they are, including the land of common possession, shall be subject to taxation at the rates fixed by Article 11, but not by Articles 9 and 10 of the Law "On payments for land".
Guiding by part four of Article 122, part one of Article 116 of the Constitution, Articles 7, 11, 36, 38, 40, 401 of the Law "On Constitutional Court of the Republic of Belarus", the Constitutional Court
RULED:
1. To find point 21 of Minsk oblast Council of deputies of 21 January 2004 No. 34 "On budget of the Republic of Belarus for 2004" in part of recommendations for region and city Councils of deputies to increase the rates of the land tax to be in line with the Law of the Republic of Belarus "On budget of the Republic of Belarus for 2004".
To find the specified point of the Decision in part of recommendation for Minsk region Council of deputies to fix the rates of the land tax in the territory of the region, taking into account the rates of the land tax, which are effective in the city of Minsk to be in line with the Law of the Republic of Belarus "On payments for land".
2. To find Decision of Minsk region Council of deputies of 30 January 2004 No. 46 "On increasing the rates of the land tax and fixation of reducing coefficients for 2004" to be in line with the Law of the Republic of Belarus "On budget of the Republic of Belarus for 2004" and with other acts of legislation of higher legal force with respect to the specified Decision.
3. To emphasize that by force of Articles 3, 72, 73, 75 and 76 of the Land Code of the Republic of Belarus and Articles 3, 6 and 11 of the Law of the Republic of Belarus "On payments for land" collection of the land tax for the plots of land granted the citizens for keeping collective gardening and cottage building must be carried out at the rates stipulated by Article 11 of the Law "On payments for land".
In this connection the Ministry on Taxes and Dues was proposed, before adoption by the lawmaker of another decision while collecting the land tax from the gardening partnerships, to proceed from the requirements of Article 11 of the Law of the Republic of Belarus "On payments for land" as those based on provisions of the Land Code of the Republic of Belarus.
4. The present Decision shall come into legal force from the date of adoption.
5. To publish the present Decision in accordance with the legislation.
Presiding Officer —
Chairman of the
of the