11 June 2001 № D-116/2001
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, G.A. Vorobei, K.I. Kenik, V.V. Podgrusha, A.A. Sarkisova, A.G. Tikovenko, R.I. Filipchik, G.B. Shishko, V.Z. Shuklin, has examined on the basis of Article 40 and part one of Article 116 of the Constitution complaints of citizens on the issues of succession duties.
One of the complaints to the Constitutional Court specifies that in October 2000 she/citizen has inherited from grandfather-testatrix the house in the country assessed by bureau of technical inventory at 3, 200 thousand roubles. In April 2001 she was proposed by inspection of State tax committee to produce declaration and to pay income tax with penalty fee at total amount of 826 thousand of roubles.
The complaint raises the question on the conformity of the procedure of calculation, pay of income tax and required by taxation bodies with penalty fee with the Constitution and the laws of the Republic of Belarus. Similar questions are contained in other complaints. The Constitutional Court, having studied relevant provisions of the Constitution, laws of the Republic of Belarus "On income tax from natural persons", "On taxes and dues reaised into the Budget of the Republic of Belarus", other enforceable enactments, practice of calculation of succession duty (income tax from inherited gains), found the following.
Taxation of inherited gains shall be made in accordance with the provisions of Article 16 of the Law "On income tax from natural persons" (hereafter - the Law) which stipulates taxation of other gains, those not listed in Articles 7, 10, 13, 14 and 17 of the Law. According to point 2 of the specified Article natural persons by earning an income shall produce within 30 days term for taxation body, according to the place of registration as tax payer of the Republic of Belarus, declaration with specification of the size of practically earned income and the size of income expected until the end of a calendar year. Natural persons during a year shall make advance payments one third of the sum of tax calculated by taxation body on expected income on the rates specified in point 1 of Article 6 of the Law unless otherwise stipulated by legislation of the Republic of Belarus. There have been fixed terms for making advance payments: 15 May, 15 August, 15 November. The sums of advance payments calculated during a year after expiry of even one term for pay shall be made in equal shares on non-coming terms for payment.
On the expiry of the terms for pay of advance payments pay of tax shall be made in equal shares at two terms: in a month after serving a notice for tax pay and in a month after first term for tax pay (point 3 of Article 16 of the Law). According to Article 2 of the Law the object of taxation shall be aggregate income of natural persons in money and in natural form earned during a calendar year. Aggregate annual income shall be determined on the expiry of a calendar year as total sum of all incomes (except for incomes specified in Chapter 8 of the Law) of a natural person earned from all sources during a calendar year.
According to Article 19 of the Law taxation bodies on expiry of a calendar year shall make recalculation of the tax based on aggregate annual income. Difference between calculated sum of tax and sums of tax paid (deducted therefrom) during a year shall be subject to be paid by natural persons or under their request to be repaid or be passed to them by taxation bodies on or before 15 May of the year following the accounting one. Legal persons, entrepreneurs and natural persons under the legislation of the Republic of Belarus (Article 22 of the Law) shall be subject to liability for violation of legislation of the Republic of Belarus which regulate the procedure of calculation, deduction, transfer (pay) of income tax from natural persons who shall produce declarations for taxation. Point 2 of Article 10 of the Law "On taxes and dues raised into the budget of the Republic of Belarus" envisages that sums of taxes duely non-paid into the budget shall be exacted from payers with calculation for each day of delay (day of pay included) of penalty fee at the rate of the National Bank of the Republic of Belarus which is effective at the moment of recovery of funds.
Since the Law in question stipulates no calculation of penalty fee for unduely made advance payments and, moreover, on expiry of a calendar year taxation bodies make recalculation of income tax on the basis of aggregate annual income, the Constitutional Court deems that non-observance of the terms for making advance payments on succession duty shall not be the ground for application of liability determined by legislation for unduely pay of income tax.
Methodical instructions on calculation and pay of income tax from natural persons approved by Order of State tax committee of the Republic of Belarus of 6 April 1999 No. 62 (registered in National register of legal acts of the Republic of Belarus of 27 April 1999, No. 8/289) with further amendments have determined slightly different procedure and terms for payment of succession duty. Examination of the practice has indicatied that taxation bodies, while calculating the sums of succession duties and, while fixing the terms for their pay, shall use the provisions of paragraph five of sub-point 16.2 of the abovementioned Methodical instructions under which, if there is no expectation of an income until the end of a year (the source of income has been ceased or income was nonrecurrent) declaration shall contain zero expected income and calculation of a tax shall be made from factual income under declaration produced. Pay of tax shall be carried out in terms specified in sub-point 16.6 of the Methodical instructions (point 6 of Article 16 of the Law).
On the bases of point 6 of Article 16 of the Law "On income tax from natural persons" recalculation of tax, recovery or repayment of calculated sums shall be made within 15 days term from the day of producing declaration for a taxation body. Thus, taxation bodies require to pay income succession duty within 15 days term from the day of producing declaration failing to take account of the fact that the given point of the Law shall envisage suspension of drawing taxes during a year and in that case producing of declaration for a natural person shall be his/her right but not obligation. Producing of declaration by earning inherited incomes according to point 2 of Article 16 of the Law shall be obligatory. The same approach is specified in paragraph two of sub-point 16.2 of the Methodical instructions on calculation and pay of income tax from natural persons.
The Constitutional Court emphasizes that in case of non-producing in fixed terms of declaration on inherited incomes tax payers shall be subject to liability under point 4 of Article 9 of the Law "On taxes and dues raised into the budget of the Republic of Belarus". In accordance with the point in question in case of non-producing, unduely producing for taxation bodies of accounts, settlements and other documents, required for calculation and payment of taxes into the budget, tax payers shall pay interest sanction at 10 per cent of tax sum owing thereto.
In that connection the Constitutional Court deems that 15 days term under point 6 of Article 16 of the Law "On income tax from natural persons" for recalculation of tax, recovery or repayment of calculated sums may not be applied for payment of succession duty. The Constitutional Court emphasizes that calculation of succession duty and serving for a tax payer of payment notice with obligatory specification of the sum of tax and the term for pay shall be vested by legislation in taxation bodies. The terms for making advance payments in payment notice should be determined taking into account provisions of points 2 and 3 of Article 16 of the law "On income tax from natural persons", and as for recalculation of tax shall be based on aggregate annual income - point 4 of Article 19 of the given Law. Under Article 58 of the Constitution no one shall be compelled to discharge duties that are not specified in the Constitution of the Republic of Belarus and its laws or renounce his rights. Under Article 56 of the Constitution citizens of the Republic of Belarus shall contribute towards the funding of public expenditure through the payment of state taxes, dues and other payments.
The specified constitutional obligation shall have special public and legal nature that is conditioned by public and legal nature of the state and of state power. Tax - is a necessary condition for existence of any state and therefore, the obligation to pay taxes shall cover all tax payers as an absolute requirement of the state.
The Constitutional Court pays attention that special nature of the specified constitutional obligation may not be the ground for compulsion of citizens to renounce their rights, in particular, the right to pay succession duty in shares and according to the procedure and within the terms specified in law. Under Article 137 of the Basic Law by-laws shall be in compliance with the Constitution and the laws adopted in accordance therewith. In connection with abovestated the Constitutional Court considers that the reference norm concerning the terms for pay of income tax in paragraph five of sub-point 16.2 of the Methodical instructions on calculation and pay of income tax from natural persons is not in line with the relevant provisions of the Law "On income tax from natural persons" and shall infringe upon constitutional rights and lawful interests of citizens who get inherited gains.
Moreover, the complaints of citizens to the Constitutional Court against ill-founded, in their opinion, overestimation of buildings and constructions while their assessment by bureau of technical inventory shall signify about the necessity to reconsider the existing technique for assessment of buildings and constructions in order to find an optimal balance of interests between the state and citizens who receive inheritance.
Guiding by Article 40, part one of Article 116, Article 137 of the Constitution, by Articles 7, 11, 36, 38, 40, 401 of the Law "On the Constitutional Court of the Republic of Belarus" the Constitutional Court
RULED:
1. To propose:
the State tax committee of the Republic of Belarus to bring the Methodical instructions on calculation and pay of income tax from natural persons into line with the present Decision;
the taxation bodies, due to supremacy of the law as regards departmentral enforceable enactments while collecting succession duty, to be based on the terms fixed by the Law of the Republic of Belarus "On income tax from natural persons";
the authorized persons to analyze technique for assessment of buildings and constructions owned by natural persons in order to find the possibility of its revision for more full protection of constitutional rights and lawful interests of citizens who inherited property.
2. The present Decision shall come into legal force from the date of its adoption.
3. To publish the present Decision in accordance with effective legislation.
Presiding Officer —
Chairman of the
of the