In The Matter Of The Application For Revocation Under Section 35Ba Of The Income Tax Act

Original Language Title: ve věci návrhu na zrušení části § 35ba zákona o daních z příjmů

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162/2014 Sb.


The Constitutional Court

On behalf of the Republic of

The Constitutional Court ruled under SP. zn. PL. ÚS 31/13 June 10. July 2014

the plenary consisting of the President of the Court, Pavel Rychetského (reporter judge) and

judges Louis David, Jaroslav Fenyka, Jan Filip, Vlasta

Formánkové, Ivana Janů, Vladimir Crust, Jan Musil, Vladimir

Sládečka, Radovan Suchánka, Catherine Šimáčkové, Vojtěch Šimíčka,

Milady Tomková Jiří Zemánek, and on the proposal of the Group of 19 Senators Senate

The Parliament of the United Kingdom, represented by Prof. JUDr. Aleš Gerlochem,

CSC., lawyer based Prague 2, Botičská 4, on the repeal of section 35ba paragraph. 1

(a). a) of Act No. 586/1992 Coll., on income taxes, as amended by Act No.

500/2012 Coll., in the words of "; the tax is not lessened by the taxpayer to the 1.

January tax year is receiving a retirement pension from the pension insurance

or from the compulsory insurance of the same type ", with the participation of

The Chamber of deputies of the Czech Parliament and the Senate of the

The United States, as parties to the proceedings and Ing. Marie Adámkové, legally

represented by JUDr. Andrew Moravcem, Ph.d., a lawyer based in Hradec

The Kings, Resslova 1253, as intervener,

as follows:

Paragraph 35ba paragraph. 1 (b). a) of Act No. 586/1992 Coll., on income-tax

income, as amended by Act No. 500/2012 Coll., in the words of "; the tax is

does not reduce the taxpayer to 1. January tax year is receiving

old-age pension from the pension insurance or from a foreign debtor

insurance of the same type "cancels the date of publication of the finding in the journal of laws.



Summary of the proposal

1. the Constitutional Court received on 12 June 2006. June 2013 proposal for a group of 19 Senators

Senate of the Parliament of the Czech Republic, for which the Senator is JUDr.

Miroslav Antl, (hereinafter referred to as "the applicant") for annulment of the provisions of § 35ba

paragraph. 1 (b). a) of Act No. 586/1992 Coll., on income taxes, as amended by

Act No. 500/2012 Coll., in the words of "; the tax is not lessened by the taxpayer,

that to 1. January tax year is receiving a retirement pension from the

or from a foreign pension insurance compulsory insurance of the same

Type "(hereinafter referred to as ' the contested provisions '). According to the appellant, this

the provisions, as a result of the person therein does not apply discount

on income tax of individuals to the taxpayer (i.e., a reduction of this tax

the obligation) of 24 840 Czk, in breach of article. 1, art. 3 (2). 1, art. 11

paragraph. 1 and 5, and article. 26 of the Charter of fundamental rights and freedoms (hereinafter referred to as

"The Charter") and article 6(2). 26 of the International Covenant on Civil and political

rights (hereinafter referred to as "the Covenant").

2. the applicant considers that the measures while avoiding

discriminatory, because it puts the person, which are next to the old-age pension and

other income within the meaning of Act No. 586/1992 Coll., on income tax, in the

as amended, disadvantaged in comparison with

the rest of the tax payers who do not receive a retirement pension.

However agree that saving taxes within the meaning of article. 11 (1) 5 of the Charter

is a legitimate intervention in the title, this legitimacy is not

given only the public interest on the collection of funds to

the security of a variety of public goods, but also the requirement for uniform

the distribution of the tax burden. It is in this direction, however, contested

provisions does not hold water in terms of the criteria formulated by the Constitutional Court

in its case law to review the constitutionality of legal provisions, taxes [specifically

in the report of 21 October 2003. April 2009, SP. zn. PL. ÚS 29/08 (N 89/53 SbNU 125;

181/2009 Coll.)], and the aspects of extreme disproporcionality (called.

rdousícího effect) and neakcesorické and incidental in nature of equality.

3. as regards the first of those aspects, the extreme disproporcionalitu

It has fallen the provisions of exhibit that it occurs to challenge

the basic meaning of tax to the taxpayer, which is the exclusion of a certain

the living minimum (if not strictly within the meaning of law No 110/2006

Coll., about life and the subsistence minimum, as amended) of the

taxation. Figuring the principle conforms to the requirements arising from the

the case-law of the Constitutional Court, the Supreme courts case-law or other

States (in particular, the German Federal Constitutional Court), which must not

be tax law affect the very nature of the farmhouse, which is taxable

subjected to. Until now, was always respected by the legislature. Explanatory memorandum

message to Act No. 500/2012 Coll., amending tax, insurance and other

laws in connection with the reduction of the public budget deficits, which

the law on income tax, accompanied by the contested provision, namely

advocates the admissibility of contested measures just by living wage

Working poživatelům of the retirement pension is guaranteed

through tax-free retirement pension, such justification

However, according to appellant cannot succeed. The persons concerned is withdrawn

part of the proceeds from their gainful employment, i.e. the income that does not have

no substantive connection with them at the same time paid retirement,

for the payment of the meet the legal requirements. The applicant does not claim that the

the so-called. strangling effect it must affect all concerned taxpayers

(that is, those who are beneficiaries of old-age pension at the same time) using the same

manner; to have been given the unconstitutionality of the contested provisions,

However, just as well as potential impacts to the position of some of these people.

Indeed, a significant proportion of pensioners is self-employed

precisely because of the need to supplement their income, or to compensate for the reduction in the

the standard of living, which would occur in the event that they left their

economic activities.

4. disproporcionalita in question is augmented by a time factor, since

for the application of tax credits is crucial 1. January, the competent

of the calendar year. On the contrary, it is irrelevant, what is the situation in the course of

the rest of the calendar year in which the plaintiff is basing of unequal

the position of the taxpayers concerned. compared with other legal

tax rebates specified in section 35ba paragraph. 1 (b). b) to (f)) of the

income taxes that are applicable after each calendar

months in which to meet the conditions. As a result, State

When even the recipient of a retirement pension, which was employed for only a few

months of the year, comes the possibility of full deduction, tax credits, and not

only by the possibility of deduction in proportion to the number of months

which to exercise a professional activity.

5. Non-compliance of the contested edit finds the appellant and with the principle of

equality within the meaning of article neakcesorické. 1 of the Charter (in conjunction with article 26

The Pact), because the contested measure, the legislature put the person

in receipt of a retirement pension. No matter how big the income such

the taxpayer has per calendar year, be prepared for an amount of up to 24 840

CZK per year. He did so while arbitrarily, without any reasonable

justification. The current legislation on old-age pensions not only is not

built on exclusion of overlapping of earnings from work, the old-age

income, but rather on their a priori compatibility. It is evident from the

§ 34 paragraph 1. 4 of Act No 155/1995 Coll., on pension insurance, as amended by

amended, which supports this accumulation by in his

as a result of increasing the percentage amount of the retirement pension. On the contrary, there is no

no legal provision which would (as opposed to the earlier rules)

such overlapping is prohibited. The age for entitlement to the

old-age pension is not even the reason for termination of employment, or

the reason for their self-employment, therefore there is no

the reason for that would be gainfully employed pensioners should be of

tax in a worse position than other taxpayers.

The contested provision, it is for these reasons, illogically non-system. While

the law on pension insurance the concurrent performance of gainful employment with

collection of old-age pension actually rewards, the income tax act

the same situation of tax sanctions.

6. the applicant for the purpose of comparison, points out that the earlier legislation

limiting the entitlement to old-age pension when overlapping with a gainful activity in the

Depending on what it should receive the person concerned, or in the

Depending on the form in which it was gainful activities carried out (cf..

section 37 of the Act on pension insurance, in the version in force in each

periods 1. January 2010). I challenged the legislation would

could be constitutionally Conformal if the conditions for the exercise of gainful

activities and its accumulation to retirement have been established

Finance in a complementary. In a situation where the law on pension insurance in this

the direction of the unfettered exercise of the activity (e.g., by, that would restrict

the amount of pension), however, cannot be regarded as legitimate, that the accumulation of

to penalize the law on income taxes through higher taxation.

7. The contested legislation effectively increases the tax burden of working people

old-age pensioners, following the selection of the target group of this

the measures, however, is arbitrary, irrational and illegitimate. This

the conclusion leads the appellant's reasoning about what actually is in this

the event is subject to tax. It is generally accepted that a tax is a General

burden, which requires all citizens according to their income, assets and

purchasing power to finance the General tasks of the State. In the case of fallen

the provisions, however, is in fact the subject of taxation rather than income from

gainful employment, but rather the fact that the taxpayer is a beneficiary of the

old-age pension. In other words, is not subject to income tax

gainful employment, but is affected by a tax that the taxpayer is

old-age pensioner. As a result there is therefore a particular personal status, tax

the taxpayer in connection with income from gainful employment. Such a criterion

your rapporteur considers that taxation is totally unacceptable, and his

irrationality is given already by the fact that the only way to measure

the higher tax burden is the abandonment of the pursuit

activity. If the right to work, or the right to take the resources on

my life work within the meaning of article 3(1). 26 paragraph 2. 1 of the Charter, the law

constitutionally guaranteed, then it is not possible that in this way the legislature

"motivated" old-age pensioner to leaving employment. Can be

assume that a higher rate of taxation will be for many of them the reason

for leaving employment.

8. Finally, the applicant considers that the violation of the principle

incidental in nature, i.e., in violation of the equality article. 3 (2). 1 in conjunction with article. 11

paragraph. 1 and 5, and article. 26 of the Charter. First, those provisions shall be prohibited

discrimination in the basic rights and freedoms for many reasons, among which

include other positions, including for example. the position of the old-age pensioner.

Impaired fundamental rights as a result of the discriminatory

the conclusion is just the article. 11 of the Charter, as the old-age pensioners is not

shall be afforded the level of protection of their earnings (assets) compared to

other persons employed by law enforcement. Your rapporteur is aware that even

in the case of a constitutionally guaranteed equality equality is not absolute,

but a relative equality, and, therefore, that even in the position of the categories of persons referred to in

article. 3 (2). 1 of the Charter, there may be some justified differences. In

the present case, however, the selected criterion is illegitimate from the

because of his irrationality, the result of which is illegitimate and the resulting

inequality in terms of the different degree of interference with the right of ownership for

individual taxpayers. Rational criteria distinguishing the

respect to the subject of income tax can only be circumstances which

refer to the activity as such, for example. whether it is revenue from

employment, business, rental property, etc. Between the old-age

retirement and income tax but no rational connection is not.


Course of the proceedings before the Constitutional Court

9. The Constitutional Court under section 69 of Act No. 182/1993 Coll., on the Constitutional Court, in

as amended, posted by the Chamber of Deputies and the Senate proposal

The Parliament of the United Kingdom as parties to the proceedings and the Government and the public

the Ombudsman, who are authorized to enter into the proceedings

Parties to the proceedings. On the basis of § 48 para. 2 of the Act on the Constitutional Court was

on the expression and requested the Ministry of labour and Social Affairs and the

The Ministry of finance.

10. In its resolution of 31 March 2004. October 2013, SP. zn. I. ÚS 2340/13 broke even.

Senate Constitutional Court proceedings in the matter of a constitutional complaint the complainant

Ing. Mary Adámkové against a decision of the tax authority for the Czech Republic

region of 31 July. may 2013 No. 2430469/13/2122-20300-203234 (operative part

I), with which it was linked to the proposal to repeal section 35ba paragraph. 1 (b). and)

Act No. 586/1992 Coll., on income taxes, as amended

the regulations in the part of the sentence after the semicolon-sounding "tax shall not be reduced by the

the taxpayer, who at 1. January tax year is receiving a retirement pension

of or from a foreign pension insurance compulsory insurance

of the same kind ". At the same time forward the proposal referred to the plenum of the Constitutional Court

(statement II) in its resolution of 28 October 1999. November 2013, SP. zn. PL.

TC 51/13 pursuant to § 35 para. 2 of the Act on the Constitutional Court rejected as

inadmissible because of lis pendens. This referred to the complainant

right to participate in this proceeding, as the intervener.

11. From statistical yearbooks from the pension insurance for the year 2012

and the income statistics for the year 2013 issued by the Czech administration of social

the Constitutional Court received security statistical data on the average amount of

old-age pensions paid in 1992 to 2012, an overview of the layout of the

retirement pensions according to the above file in the kvantilovém representation since

2001, the number of pensions paid according to the amount of the monthly pension, and

an overview of the number of pensioners and average income in 2013.


Representation of the Chamber of Deputies and the Senate

12. The Chair of the Chamber of deputies in its comments Miroslava Němcová

of the 17. July 2013 and the President of the Senate of Milan Štěch in its observations of

on July 24, 2013 summarized the progress of the legislative process in both houses



Representation of the Government and the Ombudsman

13. The Prime Minister Ing. Jiri Rusnok in its comments of 26 March.

July 2013, the Constitutional Court said that the Government of the Czech Republic

does not make use of their right pursuant to § 69 para. 2 Act No. 182/1993 Coll., on the

The Constitutional Court, as amended, and does not enter into this

control. Similar communications received by the Constitutional Court on 2 February 2005. July 2013 and

the former Ombudsman of JUDr. Paul Varvařovského, which

the right to enter into this proceeding, it was clear from § 69 para. 3 of Act No.

182/1993 Coll., on the Constitutional Court, as amended by law no 404/Sb.


Representation of the Ministry of labour and Social Affairs

14. The Minister of labour and Social Affairs, Ing. František Hobby on your

observations of 9. August 2013 pointed out that from a substantive point of view area

income tax, where the contested provision turns out, do not fall into its remit

of the Ministry. For this reason, merely found that the question

Unlimited overlapping retirement and earnings are dealt with

already the Advisory Expert Corps of the Minister of finance and Minister of labour and

Social Affairs in the years 2009 and 2010, which in its final report to the

This issue recommended to address the issue of unlimited overlapping pension and

Working indirectly, therefore through the income tax system, rather than

expensive and inefficient administrative interventions (e.g., reductions in the

income according to income). You can use the appropriate setting of the tax system

income for the area of pensions (without impact on the pensioner,

for whom is the only pension income). On this output followed even

the then Government's mission statement, which States that the Government will

respect in as much as possible the conclusions of the Advisory

the Corps of experts to reform the pension system. Those recommendations were

the adoption of this law just implemented.

15. To some of the arguments of the opponents of the proposal on cancellation

provisions of the law on income tax, said that as far as the comparison with

earlier laws, in the past, the edits, which in

more fully allow for the adjustment of the amount of the pension in the concurrent professional

activities have always been associated with efforts to straighten the conditions in relation to the

the obligation to pay insurance premiums to the pension insurance, and therefore not in the

relation to the payment of income tax, or to encourage or favour the

working pensioners. It is not true that the only

options, how to avoid the mentioned higher tax liability, is to close the

gainful employment. There is also the option to suspend the payment of the

old-age pension for gainful employment, thus carried out in

the result will be to increase the percentage amount of the old-age

pension on the basis of § 34 paragraph 1. 2 of the Act on pension insurance.


Representation of the Ministry of finance

16. The Ministry of finance in its observations of 13 January 2004. December 2013

stated that the contested provision was adopted as part of the measures,

the goal was to keep the State budget deficit in the years up to 2013

2015 under three percent of gross domestic product. For this reason, it

cannot be assessed in isolation without mutual connection with other

temporary or permanent measures that are formed mainly of savings

on the expenditure side, and only to a lesser extent also the increase in the revenue side

the budget by raising taxes. Song of austerity has been designed

to make the savings involved in all groups of the population. Receiving old-age

retirees with two exceptions is taxed as income other

payers of income tax. First, under section 4, paragraph 4. 1 (b). h) of the

income tax is exempted from this tax income in the form of benefits from

pension insurance in the amount of 36násobku the minimum wage each year. And for the

Second, in the years 2013 to 2015, according to the § 35ba para. 1 (b). and the sentence)

a semicolon to the income tax act for taxpayers, who are to 1. January

the relevant tax year entitle the retirement pension from the

or from a foreign pension insurance compulsory insurance of the same

the species does not reduce the income tax on the base discount of 24 840 CZK.

17. In relation to the plea of breach of the principle of equality, accessory

the Ministry of Finance on the applicant points out the mentioned find SP. zn.

PL. ÚS 29/08 from which infers a wide discretion to the legislature to decide,

which group of people will be taxed and how. When assessing whether

a tax distorts the principle of equality, it is necessary to be based on a comprehensive

a person with this load of taxes with respect to her entire estate,

and not at a distance after the structural elements of the tax.

At the same time consideration should be given to the other rules governing the taxation of

old-age pensioners ' income. Temporary restrictions apply options

basic tax credit the legislature compensates for the fact that the taxpayer,

that is the old-age pensioner, has freed one of their revenue, which

It is compared to other payers of the tax preferential treatment. For this reason, this

the measure is not a handicap, but the settlement of the legal status of the Group

bodies to others.

18. The temporary exclusion of the possibility of applying the basic tax credit may

results in a reduction in the income of the taxpayer who is both

old-age pension and who has more revenue, this fact

However, it does not mean that the measure in relation to such

persons winding up the effects. To continue to receive them at least

old-age pension and yet their additional income, if any, shall be subject to

taxation. In addition, the measure in question is neither arbitrary nor irrational.

Sense the existence of a basic tax lies in the non-taxation of certain

the subsistence minimum, while this function for old-age pensioners fulfils

old-age pension, which is exempt from income tax. For taxpayers with

income in the form of benefits from the pension insurance fulfils the function of the

a minimum exemption of this benefit from income tax, and not the base discount

on the tax.

19. In conclusion, the Ministry of finance notes that the use of time

the test is in the usual tax provisions, on an annual basis for

the application of this discount, which implies the need for determination of 1. January

as the effective date of the reporting period for the application of the basic

discount on income tax. Similarly, as the power to decide which

entities will be subject to the tax is the right to assess, from the

When it will be so, lawmakers. This is in addition to

a large part of the taxpayer bargain.


The observations of the intervener

20. Submission of 6 April 2005. September 2013 informed the intervener to the constitutional

the Court, within the meaning of § 35 para. 2 of the Act on the Constitutional Court will be

apply the law of the intervener in the present proceedings. In the subsequent

observations from day 1. November 2013 referred to its argument

contained in the constitutional complaint of 30 November 2005. July 2013, which is before the

The constitutional court proceeding under SP. zn. I. ÚS 2340/13. From her

the content suggests that the discount on the tax relief is not favouring the taxpayer

a certain group of individuals selected on the basis of the political keys, but

the design element of the tax into the tax system based on the

the concept of the so-called. the flat tax introduces an element of tax progression. U

low-income people so just through it occurs to her

a major reduction, which allows you to reach the necessary (and even in the

no constitutional plane) solidarity with the poor richer. Therefore, if it is to be

This discount in relation to certain taxpayers are withdrawn, it shall

exist legitimate and intensive enough reasons, however, in the case of

the contested provisions stated. In any case, for

such a reason could not be treated as retirement pension, that is, the performance of

drawn from the pension insurance system, which is not taxable


21. the contested provisions Conflict with the constitutional order sees the side

participants in the fact that certain in advance that group income tax payers

individuals without a legitimate reason, taken away the right to a tax credit,

which generally belongs to all taxpayers, without distinction. This is distorted

the principle of equality in rights and duties and in the plane of the constitutional law

violated article. 11 (1) 1 the second sentence in conjunction with article. 11 (1) 5 of the Charter,

due to the age at which retirement is dependent. In

as a result of these steps resulting from the uneven tax burden for the same

work at the same time these taxpayers receive for the same work less than

other persons in a comparable position, which is in the plane of the constitutional law

right has been infringed on fair compensation for the work referred to in article. 28 of the Charter.

The last reason of unconstitutionality sees the intervener in that

individuals entitled to a retirement pension, the legislature

demotivated from economic activities and their economic activity

the law is seen rather as a leisure activity, it is necessary to

seen as a violation of the human dignity of the persons concerned, as well as the rights

to raise funds for their necessities of work within the meaning of article 87(1). 26

paragraph. 3 of the Charter.

22. in the context of their observations from day 1. November 2013, the intervener

Notes on the finding of Constitutional Court of the Czech and Slovak Federal

The Republic of 8 September. October 1992, SP. zn. PL. ÚS 22/92 (published under the No.

11 in the collection of the resolutions and the findings of the Constitutional Court of the Czech and Slovak

Federative Republic) from which it derives, first, the requirement of an objective

and the rational justification for the tax legislation, partly as inadmissible

mixing the right to material security in old age and the obligation to pay

the tax. Moreover, it is on a contested legal to be seen even through the prism of

the basic principles of the democratic rule of law. According to the side

appellant is unconstitutional and that such adjustment procedure your

formation and its content does not reflect the principle of the protection of minorities against oppression

most of the [article 6 of the Constitution of the Czech Republic (hereinafter referred to as "the Constitution")], which is

necessary to deal with whether or not the question of whether the contested provisions are without prejudice to

a certain group of people making up the relevant minority, which has no real

the ability to achieve the protection of his rights in a contest of political forces (respectively.

"it has no representative in the bodies of the disenfranchised"), whether on the ground that it is

disadvantaged in some way, or that the method of formation of the representative

Corps does not allow effective representation of this group. Just off

the tax, which will apply to all income tax payers

people, was presented as a tool, which is socially disadvantaged

taxpayers have been offset by the removal of tax progression. This has been attempted

on the justification of the measures introduced and the accompanying aspects

were no doubt taken into account even when the constitutional review of the then established

measures. It is therefore not permissible to at intervals of several years, this

compensatory measures without further removed.

23. The intervener in its reply of 3 July 2003. February 2014 expressed

opposition to the allegations, the Department of finance, highlighting

the character of the old-age pension as a nárokového performance by the State on the

the basis of the funds paid to the pension scheme of the

lifelong income subject to taxation of individual income taxes. To

each of its arguments stated that the so called. strangling effect may not

occur across the Board. He was a legislator, who to the cancellation of tax rebates to

He went without any respect for individual differences, and therefore

It is up to him to prove that the challenged provisions of the Act will not have

strangling effect in any particular case. In this case, it is for the

the Group should be considered as only working pensioners,

Therefore, a group without adequate electoral potential. At the same time it should be

take account of its nature as a strongly disadvantaged social groups,

MJ. in relation to the State and changes in the pension scheme. In this

context refers to the finding of the Constitutional Court of 23 November 2005. March

2010 SP. zn. PL. ÚS 8/07 (N 61/56 SbNU 653; 135/2010 Sb.). In

connection with the Ministry of Finance of the argument of the intervener

points to the fact that the old-age pension, at least in its

the average amount is less than the basic discount on income tax, in the

as a consequence, cannot effectively fulfil its role. Due to the domestic

political and legal culture cannot be considered sufficient or representation

about the alleged temporary nature of the measure introduced by the contested provision.

Finally, the intervener rozporovala claims of Ministry of labour and

Social Affairs regarding the intended legitimate objective of the contested



A replica of the applicant

24. The above observations has replicated the applicant in its

observations from 25. November 2013 and 10 of 14. February 2014, in which in addition to

recap of each administration repeatedly referred to its proposal on the

annulment of the contested provisions. To represent the Ministry of labour and

Social Affairs said, adding that the target of his criticism is the fact that

working pensioners are not supported or were given favourable treatment in their professional

activities, but they are without a legitimate reason, excessively tax

burdened compared with other employees. Absurd then

considers that the possibility to request a suspension of payment of the pension, which

No nezdůvodňuje, for what reason should be working pensioners more

tax-burdened. In addition, such a step is in complete contradiction with the explicitly

the highest permitted the simultaneous performance of employment options and receive

old-age pension.

25. the applicant then argues at length with the observations of the Ministry of

finances. First of all, that the application for annulment of contested provisions

the income tax act because of its discriminatory nature does not hold water

arguments of the other provisions of this Act or legislation

old-age pensions. The different position is given by the staff

unsalaried old-age pension with the option to apply the tax credit on

the one hand, and "working with old-age pensioners ' without this option the

the other side. In so doing, the difference does not lie in the fact that it is a "pensioner" and

"nedůchodce", but in the fact that a certain group of employees can

apply the tax credit. Other illogicality of such observations can be

seen in the fact that the Ministry of finance brings together two unrelated

fact-that is, that the pensioners are working and that at the same time

(except) receive untaxed income, with the result that they said must

legitimately tolerate reduction of their income. The applicant the possibility of such

straightening refuses, and argues, in particular, differences in the nature of

income from employment and retirement pension. While income from employment

It is the immediate reward for work done, the old-age pension entitlement

arising from participation in the overall pension scheme, which

those who receive it throughout their economically active

life to contribute. Both sources of income along factually related. Applies

in doing so, that the legislature may anchor a different tax regimes for

each group of people, it must do so in a non-discriminatory manner, IE.

must not create unjustified differences based on illegitimate and

neracionálních criteria. The applicant is still convinced that it is given by

space for the examination of the contested provisions of the Constitutional Court of the aspects

any "violation of the prohibition of extreme disproporcionality in conjunction with the

the criteria arising from the constitutional principle of equality-"(SP. zn. PL.

TC 29/08).

26. the applicant shall be deemed to be manifestly unconstitutional a fundamental mismatch, which

arises as a result of the application of the basic tax credits depends on the

the first day of the calendar year. The Ministry of finance while

lists a number of examples of tax rebates that are applied on a monthly basis.

In conclusion, your replica summarizes the internal content of the inconsistency of the

representation of the Ministry of finance only confirms his belief about

the unconstitutionality of the contested provisions of the Act on income taxes. Is

Indeed, obvious that defend this provision in terms of the requirement for selection

a legitimate and rational criteria of discernment is just not possible.

As regards the observations of the intervener, the applicant considers that its

arguments for relevance.


Oral proceedings

27. Within the meaning of § 44 of Act No. 182/1993 Coll., on the Constitutional Court, as amended by

amended, the Constitutional Court decided the matter without holding oral

negotiations, as was to be expected from him, further clarification of the matter.


Change of the judge-rapporteur

28. The judge-rapporteur in the present case was originally in accordance with

valid schedule of work determined by the judge Vladimir Sladecek. After it has been

instead of his proposal in closed plenary meetings on 10. July 2014

adopted a different proposal from another judge, that is substantially different from the proposal

the judge-rapporteur, the Chairman of the Constitutional Court has designated Pavel Rychetský according

section 55 of the Act on the Constitutional Court judge shall draw up the text of the adopted

the award himself.


Assessment of the competence and constitutional conformity of the legislative process

29. The Constitutional Court notes that it is competent to judge of the

the proposal, which was submitted by the applicant to the legitimate [§ 64 para. 1

(a). (b)) of the Act on the Constitutional Court], it is admissible and satisfies all the

the formalities laid down by law. He could therefore accede to the factual review

the contested provisions, in accordance with § 68 para. 2 of law No.

182/1993 Coll., on the Constitutional Court, as amended by Act No. 48/2002 Coll.,

first dealt with the question of whether it was adopted and published on constitutionally Conformal

the manner and within the limits of the Constitution laid down the competence.

30. Pursuant to § 68 para. 2 Act No. 182/1993 Coll., on the Constitutional Court, in

amended by Act No. 48/2002 Coll., the assessment of the constitutionality of the law, with consists

the constitutional order of answering three questions: whether it was accepted and published in

the limits of the Constitution laid down the competence that was adopted by the constitutionally prescribed

in a way, and that its content is in accordance with constitutional law, and in the case of

other legislation and laws. In the case of the contested provisions

It is beyond doubt that the Parliament had in the meaning of article 87(1). 15 paragraph 1.

1 of the Constitution, the competence to adopt it. In addition, the Constitutional Court found out from

the observations of the parties, as well as other publicly available

documents relating to the legislative procedure following

fact: the part of the provisions of § 35ba para. 1 (b). and of the taxes Act)

revenue, whose annulment the applicant, has been added to this provision

inserted by Act No. 500/2012 Coll., amending tax, insurance and other

laws in connection with the reduction of the public budget deficits. A proposal from the

This Act (parliamentary print no 801, 6th period 2010-2013)

the Government has submitted to the Chamber of Deputies on 6. September 2012. The Chamber

It was approved by the House of Commons at third reading on 7 December. November 2012 at its 47.

meeting (resolution No. 1354), 101 voted for it from the present 195

Members, 93 of them were against and one Deputy abstained. The Senate debated a

and dismissed the Bill (Senate document No No. 442, 8. the term of Office,

2010-2012) on 5 July 2004. December 2012 on its 2. meeting (resolution No. 32, 9.

the term, 2012-2014). Of the 67 senators present voted for his

the rejection of 50, 7 against and 10 abstentions. Subsequently,

The Chamber of Deputies remained on the original Bill (resolution No.

1444), while for the approval vote on 19 December. December

2012 on its 49. meeting of the 193 MPs 102 and 88 against,

3 abstained. The law was delivered to the President of the Republic on 19 December.

December 2012. Signed by 21. December 2012. To its publication in the

The collection of laws was 27. December 2012 in amount under no. 187 500/2012 Coll.

the effectiveness of acquired on 1. January 1, 2013.

31. the findings of the Constitutional Court regarded as sufficient for the conclusion

the provisions of § 35ba para. 1 (b). and) of the Act on income tax, has been added.

of this law in the contested section followed by the law, which was adopted by the

constitutionally prescribed way. He took into account that the appellant neither

the intervener was not disputed the constitutionality of the receipt and release of this

the law. Therefore, it does not hinder him to proceed to the factual assessment of the

the constitutionality of the contested provisions.


The text of the content of the contested provisions and and other relevant facts

32. paragraph 35ba of the income tax act is ' collection

the provisions ", which define the various kinds of tax rebates to taxpayers

tax on the income of natural persons. Discount shall mean the amount indicated, of the

which the taxpayer will reduce its tax liability. Paragraph 1 (b). and)

This provision establishes the most General of them, which is (with the sole

the exception, whose constitutionality is being examined in this proceeding) refers, in General,

on all taxpayers this tax and makes 24 840 CZK per year. The exact wording of

This provision, effective on the date of receipt of this award, is the following:

"§ 35ba

Tax rebates to taxpayers of income tax of physical persons

(1) the taxpayer referred to in section 2 of the tax calculated under section 16, or

reduced in accordance with section 35, 35a or § 35b for the tax period shall be reduced by

and) the base discount of 24 840 Czk to the taxpayer; the tax is not lessened by the

the taxpayer, who at 1. January tax year is receiving a retirement pension

of or from a foreign pension insurance compulsory insurance

of the same kind, ";

attacked by is only part of it is mentioned after the semicolon.

33. the assessment of the constitutionality of the contested provisions, i.e. part of the provisions of section

35ba paragraph 1. 1 (b). and) para. 1 after the semicolon, assumed in the first place

Zoom in on the meaning of the statutory construction of the tax credits. Part of the

the legal adjustment of income tax of physical persons is all the time efficiency

applicable law on income tax, discount or reduction of the total tax

obligations for its taxpayers. This is in the area of tax law creates

certain guarantees, that the persons who are able to obtain resources for

its necessities individually, not burden tax

obligations in relation to a minimum proportion of the income which would

their ratios could reflect unduly solemn. In the extreme

the case might even be without prejudice to their right to live in dignity,

and therefore, having regard to article. 30 paragraph 2. 2 of the Charter, according to which anyone who has

is in material need, the right to such assistance as is necessary for the

ensuring basic living needs, would this intervention as well had to be

the General obligations in the framework of social security. Above this amount, of course,

is not tied to a living wage (in the meaning of life and

the subsistence minimum), but is usually higher and depends on the

the political decision of the legislator.

34. the Act on income taxes originally (as at 1 January 1993, when it acquired the

efficiency) in its article 15, paragraph 2. 1 (b). and the tax payers assumed)

personal income tax this tax by the amount of

representing 20 400 CZK per year. This amount then due to individual

the amendment increased gradually up to $ 38 040, which remained in the

December 31, 2005. The problem follows the set the deduction was its impact on the

the final amount of tax on the income of natural persons, the rate of which was then

established as the progressive glide. This means that the tax base is

not taxed, but only at a rate above a certain amount, the rate of tax American multinationals

higher, and these levels could be even more (e.g. in 2005

annual income from 0 to 109 200 € be taxed at a rate of 15%, part of the annual

income above $ 109 200 rate 20%, over the $ 218 400 rate 25% and over 331

$ 200 rate 32%). Due to the fact that the reduction in the tax base of about 38

040 Czk always touched parts of income taxed the highest rate, had this

deduction for individual taxpayers a different effect on the amount of their tax

obligations, as the amount by which they reduced the tax, grew with the amount of

income [e.g. If the annual income of the taxpayer 100 000 CZK, after that

the deduction of the tax base represented 61 960 €, which means that this

the taxpayer paid the tax instead of $ 500 only $ 9 294, 5 706

€ (I.e. 15% of the $ 38 040) less; on the contrary, if its annual income of 400

EUR, after this deduction, it represented the basis of its tax

361 960 Czk, in consequence of which the taxpayer has paid instead of $ 88 436

rounding only $ 76263.20, 12172.80 € (i.e. 32% of the 38 040

EUR) less]. Just in order to remove this progressive effect, in

as a result, with higher income and increased the amount by which

the taxpayer paid less in taxes, there is law No. 545/2005 Coll. the

amendment to the law on income tax and to replace the said deduction

Institute of tax credits. In the future, so all taxpayers had already

by a uniform amount to reduce the tax base, but only assessed of him

tax. Each could apply a nominally the same tax advantage, without

regardless of the amount of income or the amount of the tax base for calculating

personal income tax (see the explanatory memorandum to the Act No. 545/2005 Coll.

Assembly print # 1040, 4. the electoral period, 2002-2006).

35. the reduction of the tax base under § 15 para. 1 (b). and of the taxes Act)

income was for the legislation in force in the period from 1993 to 2005 can be

only in the case that the taxpayer without receiving the same amount of old-age pension

from the pension insurance pursuant to the Act on pension insurance or from

foreign insurance of the same type (cf. section 15 para. 2

the Act on income tax). If it has received in the amount of less than that in the

that it was possible to make the deduction referred to, with him to reduce the

the tax base of only an amount that represented their difference. It

means that if the tax base is reduced according to the

the provisions on the amount of $ 38 040 per taxpayer per year, and the amount of the old-age

pension that the taxpayer has received, amounted to Eur 30 000 per year, then it was in the

the case of a taxpayer to reduce the tax base only on the difference in

When piece measures 8 040 CZK per year. The preceding restrictions to reduce the taxable amount can be

only, provided that the taxpayer was not a beneficiary of the retirement tax

retirement at the beginning of the tax period and the old-age pension was not

granted or reverse to the beginning of the tax year (the last sentence of paragraph 15

paragraph. 2 of the Act on income tax).

36. paragraph 35ba of the Act to the income tax just inserted

already mentioned in Act No. 545/2005 Coll., which entered into force on 1 May 2004. January

2006. The original amount of the tax to the taxpayer was established on 7

200 Czk, which is essentially the amount corresponding to the average level at which to

This time there was to reduce the amount of tax as a result of the reduction of its

the base. Even under this legislation has not been awarded a discount

taxpayers who have received old-age pension from the pension insurance

According to the Act on pension insurance or from a foreign debtor

insurance of the same type in the amount exceeding $ 38 040. However, if the

their old-age pension, the amount does not exceed the

(unlike the past) a discount on the tax credit, and not just its

part of the. Even in this case, the restrictions apply only to

taxpayers who have been beneficiaries of old-age pension at the beginning of

the reporting period and the old-age pension was not granted to them or reverse

at the beginning of the tax year (article 35ba, paragraph 2, of the law on income tax,

effective from 1 January 2005. from 1 January 2006 until 31 December 2006. December 2007).

37. A fundamental increase in the tax to the taxpayer of an amount of Eur 7 200

the 24 840 Czk occurred with effect from 1. January 2008, by Act No. 261/2007

Coll. on the public budget Stabilization Act was, inter alia, (i) §

35ba of the income tax act. As a result, there has been a cancellation

paragraph 2 of that provision, which the newly listed could discount

apply without restriction and the taxpayers who were beneficiaries of the retirement

the pension. These changes were part of a package of fundamental changes in the field of

tax law, and their meaning should be to compensate for the

negative impact of the tax on the income of natural persons, which was newly

fixed uniform rate, to the position of people with lower incomes, which were

in the meantime, taxed at a rate lower (at 31 December 2007 amounted to

the individual tax rate of 12%, 20%, 25% and 32%). This single rate

was established in the amount of 15%. In the case of income from dependent activities

but she has so far counted. Super-gross wage [that is, the

the taxable income from employment are increased by the amount of

the corresponding social security premiums, and contributions to the State

employment policies and premiums for general health insurance,

that is of such income under special legislation obliged to

pay the employer, cf. § 6 para. 13 of the Act on income taxes, in

texts from 1. January 2008 to 31. December 2013, respectively. section 6 (1). 12 the same

Act 1. 1 January 2014 to 31. December 2014], with the result that real

20.1% [thus amounts to 15% of the amount, which are 1, 34-fold gross wages,

i.e.. the sum of the gross salary and the contributions paid by the employer on health

(9%) and social insurance (25%)].

38. in the next legislation period, tax credits for the taxpayer

maintained, and only as a result of the amendment made by Act No.

346/2010 Sb. There has been a reduction in the amount of Czk for 24 840 on 23 640

the tax year in 2011. Another change was made to the law

No. 500/2012 Coll., which supplement the provisions of § 35ba para. 1 (b). and)

the income tax Act, in the sense that its basis does not reduce the

the tax on the taxpayer to 1. the January reporting period receives an old-age

pension from the pension insurance or from compulsory insurance

of the same kind. This provision shall apply in relation to the tax

period of the years 2013, 2014 and 2015, and should cease to be valid

the end of March 31. December 2015 [cf. article. XVII, point 2 and article. (B) (XXII).

c) of Act No. 500/2012 Coll.].

39. The contested provision implies that, for a range of tax obligations

the taxpayer is essential, whether he was receiving a retirement pension just to 1.

the January reporting period. If you would to this day without receiving and

He began to receive it afterwards (e.g.. 1 February), this fact

on the possibility of applying the tax credit in question for this tax

the period had no effect. In this context, it must be observed that the

the person entitled to a retirement pension, it is not obliged to apply the

immediately, but the date on which it will do so, depends only on its

decision. In addition to her law grants the right to apply for this pension retroactively,

in relation to the period of 5 years (article 55, paragraph 2, of the Act on pension

insurance). If so, therefore, make up during the reporting period

(that is, after 1 January) or even after its expiry, it remains

the discount in question for this tax period preserved in its entirety.

Indeed, the law for this case does not provide anything else. Listed means that

If a person's entitlement to the payment of old-age pension to

1. October, payment of the arrears of up to 1. February of the following year, the

have zachovánu for this year a tax credit, and at the same time will receive a

old-age pension for the period starting from 1. October. On the contrary, a person who

It has already received to 1. January of the same year, the tax credit in question

you will not be able to claim at all. The payment of the retirement pension may be

the application of its beneficiaries is also suspended. The reason for this step is

as a rule, the fact that the activity of the person who is entitled to

old-age pension, but not to its recipient, has resulted in an increase in the amount of

the percentage amount of the retirement pension. The suspension of its payment is, however,

possible for any other reason.

In the.

Your own review

40. a summary of the content Of the contested legal provisions, it follows that in

the present case is subject to the control of the constitutionality of tax liability, and

in particular, the income tax for those individuals to 1. January

the tax year received a retirement pension. The appellant did not

does not dispute the very existence of the tax on the income of natural persons, as well as

even most of its requirements, non-compliance with the constitutional order, however,

sees in the fact that unlike all other taxpayers this tax will

in the case referred to a group of people the tax calculated on the basis set out

percentage was reduced by the amount, representing 24 840 Czk discount on

taxable to the taxpayer. In his opinion, therefore, the tax thus defined, firstly,

unreasonable manner turns out to their property, on the one hand determined by

conflict with the constitutional principle of equality.


The starting points of the review of the contested provisions

41. the Constitutional Court, in examining whether the interference with the fundamental

the right to own property has occurred in accordance with art. 11 (1) 1 of the Charter,

by default, be assessed in the first instance, whether it did so on the basis of the law

and within the limits [cf. find dated 11 October 1995 SP. zn. PL. ÚS 3/95

(N 59/4 SbNU 91; 265/1995 Sb.) or the discovery of 22 March. March 2005 sp.

Zn. PL. ÚS 63/04 (N 61/36 SbNU 663; 210/2005 Coll.)]. If these are

conditions are met, examines whether the measure in question pursues a legitimate

(constitutionally qualified) target its restrictions, and if so, whether this

measures to achieve this objective, suitable (suitability requirement), then, whether the

This objective cannot be achieved by other means, which would be to the

the basic law more friendly (the requirement of necessity), and finally, whether the

interest in the attainment of this objective in the context of a particular legal relationship outweighs the

of the Basic Law (the proportionality in the strict sense).

42. Taxes and fees, means the public service obligation to cash payments

State (tax and fee obligation). The provisions of article. 11 (1) 5

The Charter contains constitutional empowerment of the Parliament to determine the taxes and

the charges, under which it is at the same time aprobován intervention in the title

the law, which in the context of their determination, assessment and selection

[cf. occurs from 1 June 2005, SP. zn. IV. TC 29/05 (N

113/37 SbNU 463)]. The tax is imposed in the public interest, which is

above all, getting the revenue of the State budget for purposes connected with the

fulfilling the functions of the State [find SP. zn. PL. ÚS 29/08, paragraphs 40 and 41;

the finding of 19 May. April 2011, SP. zn. PL. ÚS 53/10 (N 75/61 SbNU 137;

119/2010 Sb.), section 170], and there is no doubt that this is a resource

eligible to achieve this goal. However, as regards the question of the need for

taxes in the amount of such assessment of judicial interpretation

You cannot do this, since it is a question of a political nature whose solution

It is in the exclusive competence of the legislator. Only Parliament is empowered to

decide whether the determination of certain taxes and in what amount,

in this regard, to take into account various criteria is entitled to.

The Constitutional Court can review its decision of just

in the context of the assessment of proportionality in the strict sense, that in the case of taxes

(similarly as e.g. in the case of the determination of the upper limit of cash

sanctions) is to the exclusion of their extreme disproporcionality. The intervention of the

just to the right of ownership must not lead to such a fundamental change

matrimonial property regimes of the body, that it has "the destruction of the same

the nature of the assets ", IE. "the destruction of the property of the base" of the taxpayer

[cf. find dated August 13, 2002, SP. zn. PL. ÚS 3/02 (N 105/27 SbNU

177; 405/2002 Coll.)], and that "the boundaries of the public service of the statutory

cash by an individual against the State acquired the restrictor (rdousícího)

the action of "[find dated 18 August 2004, SP. zn. PL. ÚS 7/03 (N 113/34

SbNU 165; 512/2004 Sb.)]. In this case, non-compliance is based

the constitutional order even if this effect only in part

the tax payers.

43. The tax liability must be upheld not only in terms of the exclusion of extreme

disproporcionality, but also of the constitutional principle of equality, both

neakcesorické, arising from the exclusion requirement of arbitrariness in the differentiation

bodies and rights according to art. 1 of the Charter, as well as incidental to the extent

as defined in the article. 3 (2). 1 of the Charter (cf. findings SP. zn. PL. ÚS 7/03 and

SP. zn. PL. ÚS 29/08, paragraph 43). The content of the principle of equality in the rights in the

meaning of article 87(1). 1 of the Charter, in its award SP. zn. PL. ÚS 22/92 dealt with already

The Constitutional Court of the Czech and Slovak Federative Republic, which in this

the context expressed conclusion that equality is to be understood as a category

the relative, not absolute. On his concept of subsequently established in a number of

their decision and the Constitutional Court, which in General has admitted

law-based inequality, but only provided that it can be

justified on the basis of constitutionally accepted considerations. For such a case

While it is not, if this is based on (the inequality

neakcesorická) or is a consequence of the breach of any of the fundamental

rights and freedoms (inequality ancillary)-cf. for example. find of the day 4.

June 1997, SP. zn. PL. ÚS 33/96 (N 67/8 SbNU 163; 185/1997 Coll.), find

of 25 June 2002. June 2002, SP. zn. PL. ÚS 36/01 (N 80/26 SbNU 317; 403/2002

Coll.), finding SP. zn. PL. ÚS 7/03 (see above), or the discovery of 15 July.

may 2012 SP. zn. PL. ÚS 17/11 (N 102/65 SbNU 367; 220/2012).

44. It must be pointed out that "not all unequal treatment of different

entities can be regarded as a violation of the principle of equality, such as

unlawful discrimination of some subjects in the subjects

in other. To ensure that the violation has occurred, several conditions must be met:

different entities that are in the same or comparable

the situation is treated differently, without an objective and

reasonable grounds to put forward a different approach "[find dated January 21,

2003, SP. zn. PL. ÚS 15/02 (N 11/29 SbNU 79; 40/2003 Coll.)].

45. the Constitutional Court in its established case-law applies for the purpose of

the assessment of whether the contested measure to avoid unequal treatment between the

the same or comparable individuals or groups, direct

discrimination, which consists of answering the following questions: 1.

about comparable groups or individuals?; 2. Is handled

differently based on one of the prohibited reasons?; 3. Is different

treatment of affected individuals (saving the burden to bear or denying

Dobra)?; 4. is this different treatment is justified, IE. and) monitors

legitimate interest, and (b)) is appropriate? [cf. findings from 16 October 2007

SP. zn. PL. ÚS 53/04 (N 160/47 SbNU 111; 341/2007 Coll.), paragraph 29; find

of 30 March 2004. April 2009, SP. zn. II. TC 1609/08 (N 105/53 SbNU 313) in

the text of the amending resolution of 9 April 2003. July 2009, SP. zn. II. THE TC

1609/08; find of the day 1. December 2009 SP. zn. PL. ÚS 4/07 (N 249/55

SbNU 397; 10/2010 Sb.); the discovery of 28 June. January 2014, SP. zn. Pl. ÚS

49/10 (44/2014 Sb.), available at, paragraph 34;

the judgment of the Grand Chamber of the European Court of human rights of 13 February 2003.

November 2007 in complaint No. 57325/00-D. H. against the United

Republic, section 75; the Grand Chamber judgment of the European Court of human

the law of 16 June. March 2010 in complaint No 42184/05-Carson

v United Kingdom, paragraph 61]. From the case-law of the European Court of

human rights to non-discrimination is also apparent, that is

a different treatment is based on and from its reason. While for

different treatment on grounds of racial or ethnic origin, gender, sexual

orientation, nationality or origin of a child is required to present a very strong

justification [cf. e.g. judgment of 21 June 2011 in case

complaint No. 5335/05-Ponomaryov and others v Bulgaria (nationality);

already cited the judgment in d. h. against the Czech Republic (race) or the judgment of

16 December 2002. November 2004 in complaint No 29865/96-Ünal Tekeli

against Turkey, § 53 (gender)], for other reasons, the different treatment of

is a review by the European Court of human rights less intense.

In this context, can be used as the fifth step of direct discrimination test to distinguish

also the degree of "podezřelosti" the reason for the different treatment, from which will eventually

depends on the intensity of the review by the Court (find SP. zn. PL. ÚS 49/10,

paragraph 34).

46. For the determination of the tax liability is without further apply the requirements

arising from the principle of the rule of law according to art. 1 (1). 1 of the Constitution, which

generally apply to the legislation, and in particular the requirements of the

certainty and predictability in the law or the principles of legal certainty and the prohibition of

retroactive (cf. e.g. find SP. zn. PL. ÚS 53/10, paragraph 172).

Emphasizing the necessity to the statutory definition of a tax or a fee was

specific and unambiguous, to justify the protection of the individual, to which

ownership of this form is to be affected. The purpose of the tax or

the fee is first and foremost the security of income for the State budget, which is

However, the purpose of a general enough that it can be justified in essence

any tax or charge. Precisely for this reason that their

the elements can be drawn, but only to determine, is to set them

authorized exclusively by the legislature, and its decision shall not create

space for dual interpretation, as a result, the taxpayer could not question

with certainty whether and to what extent his originated tax or

fee obligation. On the contrary, it is hardly conceivable that the

the details to be added to its decision-making activities the Court or administrative authority, in

as a result of which individual taxpayers could subsequently be

sankcionováni for failure to meet their tax obligation merely because,

that took a different interpretation of the indeterminate legal provisions than what is

subsequently formed out of practice. In other words, "cannot be accepted,

in order to influence the interpretation of the law has become the subject of taxation, something that

the law subject to tax with the desirable degree of certainty does not envisage "[find

on 2 December. December 2008, SP. zn. I. ÚS 1611/07 (N 211/51 SbNU 639), paragraph

18; CF.. also find from day 6. February 2007, SP. zn. I. ÚS 531/05 (N 24/44

SbNU 293), section 30, or the finding of the Constitutional Court of the Slovak Republic of

on 11 July. July 2012 SP. zn. PL. ÚS 109/2011, in particular, paragraphs 49 and 50].

47. For completeness, it should be stressed, and other (already mentioned) the relevant

point of view, the requirement of predictability in the law, which among other things

It assumes that if the legislature decides in a situation where the

an individual of the law a chance to act in a certain way,

This acts to regulate otherwise, then the individuals concerned

to provide sufficient time to enable it to new regulation

to customize its behavior. This necessary time will always be

depend on the specific circumstances, in particular where the

the legislation refers to who are the addressees and is respected in their

legitimate expectations. A certain standard in this sense eventually defined itself

the legislature in § 3 (1). 3 of the Act No. 309/1999 Coll., on the collection of laws and

Collection of international treaties, according to which, in the case that there is

the effectiveness of later legislation effective on the fifteenth day after the

publication, and if required by the press of the general interest, can be exceptionally

set an earlier onset of efficacy, but not earlier than the date of their



The opposition called. rdousícího effect

48. Based on these outcomes, the Constitutional Court assessed the individual

objection of the plaintiff, and came to the following conclusions. In the first place

did not find that the contested adjustment should against the payers of income tax

individuals who are also beneficiaries of old-age pension,

strangling or impact in relation to the confiscation of their property. Taxation

their income rate of 15%, though calculated. Super-gross wage, completely

apparently does not interfere with their economic activity in a way in which the

as a result of its basic justification would be lost. If you can accept

the more intense the effect in cases where the amount taxable as follows

income is less, neither here not to be overlooked, that the persons concerned are

at the same time receive the retirement pension. Any extreme cases where would

given the low amount of this pension could be considered that

the total amount of income the taxpayer does not allow his dignity or

even in the situation of material need, are solvable in the field

of social security. Therefore, the claim in question does not justify the conclusion on

the non-compliance of the contested provisions with the constitutionally guaranteed right to own

assets according to the article. 11 (1) 1 of the Charter.


The assessment criteria, which are based on the application of the basic discount on the

Dani, in terms of the opposition neakcesorické inequality

49. Furthermore, the Constitutional Court dealt with by the criterion, which is based on

whether in relationship to a particular taxpayer or not applicable

the basic discount on income tax in the amount of 24 840 CZK per year. According to the contested

provision shall not apply in the case of this discount when the taxpayer was

beneficiary of the old-age pension to 1. the January reporting period.

Crucial in this respect was the State to this day, and

any other time-sensitive was irrelevant.

50. However, you can admit that the original intention of the party making the amendment

the law on income tax, which was to complement the contested

provisions should be preventing the taxpayers, are already

at the same time receive old-age pensions are subject to taxation in the framework of the

a period of essentially two comparable tax measures (i.e. tax discount on the

the taxpayer and the liberation of the old-age pension from the tax), the contested

the provisions of this goal is only partially. Not only turns out only on

part of those taxpayers, but at the same time apparently allows these

taxpayers to adjust their behavior, so that as a result of compliance with

the said criteria preserve time regardless that they receive

old-age pension, and tax credit.

51. The inequality among taxpayers who are in the tax year

beneficiaries of the retirement pension, is reflected in the fact that those who have

This position to 1. the January reporting period, always a coming

basic tax credit, while those who find themselves in this position

at any time later on, even the next day (2 January), have

This discount is retained in full. It is not essential that all

the duration for which a gainful activity, also receive an old-age

pension. The consequence of that legislation is a significant difference in the position of

both of these groups of taxpayers, because you, in which case the discount

the tax will apply, regardless of the will have received old-age pension tax

from the taxable income of about $ 24 840 a year lower. In the case of income from

dependent work, this means that they with regard to the tax rate

nezdaní annual income corresponding to the gross wage of £ 123 582, respectively.

the so-called. Super-gross wage of 165 600 CZK (see paragraph 37), that is, for the most

people will undoubtedly not an insignificant amount. The criterion on which this

the resolution is based, is purely formal and the law creates

procedural options, how each person can keep continue to both

the benefits of the. In the case of those who still do not receive a retirement pension, it is

the postponement of the start of his return so that it occurred after 1. January

the relevant tax year. These individuals is no longer retained

the possibility to apply retroactively the pension without application of this

the claim had any effect on the application of the additional tax. In

for those already receiving it, it is again about the cessation of its

the payout for a period to be that day.

52. In this context, the question arises, what purpose can actually real

attributed to the contested provisions. It is clear that as a result of that

the measure is losing tax credit only a portion of the taxpayer receiving

old-age pension, which differentiate it from other taxpayers is

problematic for two reasons. On the one hand, there is no good reason for

that would be the taxpayer who has received a pension after all

the calendar year, should not be subject to the tax discount in question at all, while

for that matter, that it began to receive only from 2. January, June or later

should be preserved in its entirety. On the criterion of the day 1. January cannot be

in this context, looking as necessary administrative measures

in order to implement the tax deduction because, as clearly follows from § 35ba

paragraph. 3 of the Act on income taxes, the possibility of the application of the discount would

could be without any technical difficulties linked to

of the month. In addition, the resulting inequality is exacerbated by the relatively high amount,

that, which in itself represents the reason for which this

the difference cannot deny constitutional relevance (this is an extreme inequality).

The second reason is that individual taxpayers could achieve

conservation tax credits that to avoid receipt of income just the day

January 1 of the tax year.

53. These facts clearly do not name the no valid reason

for that you want in the appropriate tax year, one of the following

defined groups of taxpayers receiving a retirement pension

an important tax advantage, while the second one does not. The resolution of both

on the contrary, arbitrary nature of the groups. The Constitutional Court therefore considers the

the contested provision to be in violation of the principle neakcesorické

equality, which follows from article. 1 of the Charter.


The assessment of the contested provisions from the standpoint of equality, accessory

54. A consequence of the contested provision is not just of the inequality between the two

groups of payers of income tax of physical persons, who receive

old-age pension, but also between the members of this group, and

all other taxpayers this tax. The reason is to be found in the

them to the income tax Act does not guarantee in the same or

a comparable range of a minimum amount of income for which the

taking into account the necessity to ensure a dignified life is not expected

its taxation. While in case of the former group has this

function to perform a retirement pension whose amount is for individual taxpayers

different, in the case of the other it discount on taxable to the taxpayer that

all makes 24 840 CZK per year. Due to the fact that the inequality would

was given, even if it would act as a decisive criterion established by the

receipt of old-age pension to any day of the tax year

period, it will be another interpretation for simplification based on the resolution of

taxpayers, depending on whether in this period received or did not receive Community

old-age pension.

55. Referred to inequality is caused by the fact that, unlike the above

the tax is the amount of the old-age pension for each of its

recipients of different, the result of which is also part of the revenue,

that the tax doesn't work. From the statistical data that had

The Constitutional Court (see paragraph 11), it follows that in 2012, the

the average old-age pension 10 788 per month, while 10% of the

old-age retirement pension of less than 8 192 pobíralo €. Old-age pension

less than 8 500 Czk 250 000 approximately pobíralo from a total of 1 726

523 pensioners. The amount for 4 858 people amounted to even less than $ 3,000.

If it comes out of the argument presented by the Finance Ministry, that the old-age

pension fulfils a similar function as a discount on the tax to the taxpayer, so that

It guarantees a certain minimum amount for individual taxpayers, that

you will not be taxed, then this argument applies only provided that both

These amounts will be comparable. Above, it was stated that the discount on the tax

to the taxpayer in the amount of 24 840 CZK per year corresponds to nezdanitelnému income

(gross salary) in the amount of $ 123 582 per year, or approximately 10 300 Eur

monthly, in principle, which is the amount corresponding to the average amount of a pension.

However, because the old-age pensioners for significant parts of the above pensions

lower, it should be for them in terms of logic, consider this comparison

that they are actually in fact subject to a lesser tax advantage. For example, the

If pensioners receive a pension of 8 192 Eur/month (98 304

CZK per year), it is a comparable situation to that of the taxpayer that

not receiving an old-age pension and that should tax rebate in the amount of

19 759 € per year, by approximately 20% less than the discount question

pursuant to section 35ba paragraph. 1 (b). and) of the income tax. In the case that

These persons receive a pension in the amount of Czk 4 000 (that is, 48 000 CZK per year, which

concerns about 15 000 people), it is not a comparable situation with

status of the taxpayer that is not receiving an old-age pension and who

should tax rebate in the amount of Eur 9 648 per year, approximately 60% of the


56. These data can be summarized so that in relation to the taxpayer of the tax

personal income, which is not receiving an old-age pension,

discount applies to the VAT in the amount of 24 840 CZK per year. In the case of the taxpayer,

retirement, however, which excludes the application of this discount,

will be comparable in terms of its purpose, the tax advantage other, unfolding

from the amount of the pension. If you will be granted a pension, the lower

lower and the level of income of these people, which is not subject to the tax, which

can be illustrated by the example. For example, if the taxpayer

that is not receiving an old-age pension, the monthly income in the amount of 9 000

EUR, then with regard to a reduction in the amount of 24 840 CZK per year (2 070 Czk

per month) could do that from this income no tax. In the case that will have

the taxpayer, who is the recipient of a retirement pension and to which the

due to this fact, the discount does not apply to tax, pension

the amount of $ 400, and to other income (such as from employment, which

you survive) in the amount of 5 000 CZK per month, but these 5 000 CZK

tax rate of 15%. Super-gross wage, i.e.. 20.1% of gross earnings, in

the result of the total monthly income of $ 9,000 remains after

the taxation of only 7 995 CZK.

57. It must be added that the latter example speaks volumes about a certain

nekoncepčnosti all over the measures, since the contested regulation in respect

of the total amount of taxes, in fact, affects precisely those persons who are

among the most vulnerable taxpayers. This situation is all the more

side, that the basic aim of our democratic State must

be the preservation of human dignity, which is also reflected in the fact that man is

able to take care of herself because of her income, which obtain their own

the work-that is, income from employment and income from pension insurance.

58. On the basis of these findings, applied the Constitutional Court, in the present

test of direct discrimination (see paragraph 45), in which leveled

the status of two groups of payers of income tax of physical persons-that, in

which will apply to the taxpayer in tax rebate under section 35ba paragraph. 1 (b).

and) of the income tax Act, and that, as a result of the receipt of

old-age pension this discount on the contrary does not apply. Without the Constitutional Court

He held the view that, in the area of tax law, persons performing

professional activity always comparable footing with persons, which in addition to

the performance of this activity, a pension, in this particular

the case is considered to be the case (step 1). Comparability of their

the position is given with regard to the latter aspect, that of both

These groups have consistently applied a request to reserve a portion of their

income, which is used to ensure a dignified life, untouched

income tax (see paragraph 33). In addition, it can be concluded that the

the criterion of distinction (which is the retirement, and not

age, as incorrectly claim the intervener) is not prohibited (step 2), and

that this resolution shall be payable by the taxpayer concerned pensioners

pension (step 3). There remains the question of whether this resolution

justified (step 4).

59. The reasoning by which it can to fulfill the purpose of the base tax rebates to occur

even through the old-age pension, has a reasonable basis. Historically

the oldest features of the pension system is just the protective function,

to ensure the material security in case people age, when such

themselves ensure the resources for their livelihood. These are your

in a manner of which fulfils a similar function (though not necessarily exclusively)

discount on all tax payers by secreting the taxation of certain

the minimum amount for the provision of basic needs, which would

the effect of taxation was disproportionately onerous legislator.

Therefore pursues a contested provision limiting tax benefits in cases

when its purpose is already assured of a methodology can be used in a general way

consider the purpose behind the legitimate interest which may, justifying

the resulting inequality [step 4)]. To ensure that this measure could

as part of the test, but would have to be at a reasonable

[step 4 (b))], which is the conclusion to which regard the Constitutional Court

cannot. The reason they are just described essential (ultra) differences in the amount of

granted retirement pensions, which in the case of lower of them prevents

ensure that their payment could fullfill the above purpose

in a comparable way as a discount on the tax to the taxpayer in the amount of 24 840

CZK per year. The result of the contested provision, it is only that the lower

individual taxpayers who receive old-age pension, the greater on them hitting hard

the tax burden. The contested provisions therefore, having regard to the inadequacy of the

This inequality fails to pass the test in question, with the consequence that it is necessary to

be considered to be in breach of article 88(3). 3 (2). 1 in conjunction with article. 11

paragraph. 1 and 5 of the Charter.

60. The Constitutional Court emphasizes that the above conclusions are touching only the

questions of equality referred to groups of payers of personal income tax

people, and they cannot be used to infer or unchanging valid design

tax to the taxpayer, including the amount, or the requirement to

legislature to regulate in any way (increased) current

the amount of pensions.

61. In conclusion of this finding is not not to suspend an over by law No.

500/2012 Coll., which was to the income tax Act, inserted contested

the provisions came into effect on 1 May 2004. January 2013, i.e., just four days after

its announcement of 27 April. December 2012. Formally speaking, although it is for the legal

sufficient if the adjustment takes effect shall, therefore, is published in the

The collection of laws, before it has become effective, the material, i.e., by looking

the constitutional requirement of predictability of legislation is, however, always necessary to

take into account and what the law refers to, who are the addressees of the

and that respects their legitimate expectation (see paragraph 47). The constitutional

the Court is of the opinion that the level of taxation is one of the key aspects,

governing taxpayers ' decisions about where to direct your

economic activity, since the decision that at a certain level of taxation

It may be advantageous, it may become unfair when other tax rates. Fast

and the lack of changes to tax legislation are generally one of the largest

weaknesses not only the Czech legislation, but also to the national economy.

Indeed, virtually all economic operators are preventing long-term

planning. On a number of subjects, although you can criticize this status from the perspective of

economic, which understandably is not the task of the Constitutional Court. Way

the way this conception in and the rate of change in the present now

the case of the working retirees, however, begins to cause at least

some doubt whether the material actually occurred

the requirement of predictability in the law.

62. A person in retirement age has basically three options: enjoy retirement

pension or enjoy the old-age pension and yet remain economically

Active or defer consumption of old-age pension and continue to the economic

activity to contribute to the pension scheme. Number of pensioners while

works just for the reason to maintain a decent standard of living,

keeping them on the State pension-as is apparent from the

statistics obtained by the Constitutional Court-was not enough. When deciding which

Choose from these strategies is certainly considered a number of aspects, and

the rate of taxation of any economic activity to those undoubtedly belongs to

the most important. Therefore, you cannot stay uncritical towards the State

Let the people of retirement age-conscious this option a

the legislative setting conditions-make and subsequently to these terms

changed with effect from the coming on just four days later. In this

specific situation changes to the tax code against this type of mailing

(working pensioners) so there was non-compliance with the law already

the prescribed time limits without foresee in order to infer

Press the general interest, for which this period shall not be complied with, the

interference with the principles of the democratic rule of law.


The conclusion of the

63. In view of the fact that the contested provision is in breach of article. 1 and article.

3 (2). 1 in conjunction with article. 11 (1) 1 and 5 of the Charter, the Constitutional Court upheld the

pursuant to section 70 para. 1 Act No. 182/1993 Coll., on the Constitutional Court, as amended by

Act No. 48/2002 Coll., the proposal of the Group of senators, and held that with this

the provisions of the cancelled date of publication of this finding in the statute book. Because

This cancellation occurs during the tax period shall in

the discount on the tax to the taxpayer under section 35ba paragraph. 1 (b). and)

the Act on income taxes for all taxpayers, including those already at 1.

January of this year received a retirement pension from the pension insurance or

from the compulsory insurance of the same type.

The President of the Constitutional Court:

JUDr. Rychetský in r.

Different opinions under section 14 of Act No. 182/1993 Coll., on the Constitutional Court,

as amended, a decision of the plenary, the judges adopted a Vlasta

Formankova, Ivana Janů, Vladimir Crust and Vladimir Sladecek.

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