the procedure of payments and returning of stamp tax” with the Constitution of the Republic of Lithuania, Article 6 of the Law of the Republic of Lithuania on Stamp Tax,
15 March 1996, Vilnius The Constitutional Court of the Republic of Lithuania, composed of the justices of the Constitutional Court Algirdas Gailiûnas, Kæstutis Lapinskas, Zigmas Levickis, Vladas Pavilonis, Pranas Vytautas Rasimavièius, Stasys Staèiokas, Teodora Staugaitienë, Stasys Ðedbaras and Juozas Þilys, the secretary of the hearing - Daiva Pitrënaitë, the petitioner - Vidmantas Þiemelis, a member of the Seimas, and Stasys Juocevièius, a lawyer, both representatives of a group of the Seimas of the Republic of Lithuania members, the party concerned - Leonora Þukienë, Head of Legal Division of the State Tax Inspectorate under the Ministry of Finance, representative of the Government of the Republic of Lithuania, pursuant to Part 1, Article 102 of the Constitution of the Republic of Lithuania and Part 1, Article 1 of the Law on Constitutional Court of the Republic of Lithuania, in its public hearing on 7 March 1996 conducted the investigation of Case No.13/95 subsequent to the petition submitted to the Court by a group of the Seimas of the Republic of Lithuania members, requesting to investigate if items 5, 6, 7, 8, 16, 17, 19, 27.4-27.9, 29, 34, 36 of the stamp tax rates confirmed by the 11 November 1994 Resolution No.1123 of the Government of the Republic of Lithuania “On the confirming the rates of stamp tax ,
the procedure of payments and returning of stamp tax” are in compliance with the Constitution of the Republic of Lithuania, Article 6 of the Law of the Republic of Lithuania on Stamp Tax,
The Constitutional Court has established: I The Seimas on 23 June 1994 passed the Law on Stamp Tax (Official Gazette “Valstybës Þinios”, No.51-950, No.89-1712, 1994; No.47-1135, 1995; No.18-462, 1996) Part 2, Article 3 whereof stipulates “the rates of stamp tax save for the cases under investigation in courts or copies of granted documents shall be established by the Government of the Republic of Lithuania”. The rates of stamp tax were confirmed by the Government by its 11 November 1994 Resolution No.1123 “On the confirming the rates of stamp tax,
the procedure of payments and returning of stamp tax” with subsequent amendments and appendages. II In the opinion of the petitioner, the rates established in items 5, 6, 7, 8, 16, 17, 19, 27.4-27.9, 29, 34, 36 by the 11 November 1994 Resolution No.1123 of the Government of the Republic of Lithuania “On the confirming the rates of stamp tax,
the procedure of payments and returning of stamp tax” are groundlessly high and violate the provisions of Article 6 of the Law on Stamp Tax, as stamp tax, according to this Article, shall be included into the budget, and only such office shall be maintained by this tax which performs actions and grants documents bearing legal power for which the aforesaid tax is collected. In the opinion of the petitioner, the Government by constantly increasing stamp tax transformed it into the means of illegal replenishing the budget and thereby in fact took the competence of the Seimas which is established in item 15, Article 67 of the Constitution (“establish State taxes and other obligatory payments”). Besides, as the petitioner alleges, the Government by groundlessly increasing the rates of stamp tax restricts freedom of individual economic activity and initiative (Part 1, Article 46 of the Constitution),
people’s opportunity to freely choose business (Part 1, Article 48 of the Constitution). These actions of the Government create conditions to monopolise market because petty and average businessmen are financially incapable to pay high stamp taxes and, therefore, they give up the most profitable markets to large companies and monopolies (thereby Parts 3, 4, and 5, Article 46 of the Constitution are violated). The petitioner also contends that the stamp tax rates which were established by the Government restrict competition as they impede creating new economic entities,
changing the manner of their activity (Article 6 of the Law on Competition). On the grounds of the arguments set forth, the petitioner requests to recognise that items 5, 6, 7, 8, 16, 17, 19, 27.4-27.9, 29, 34, 36 of the stamp tax rates confirmed by the 11 November 1994 Resolution No.1123 of the Government “On the confirming the rates of stamp tax ,
the procedure of payments and returning of stamp tax” contradict Article 46, Part 1, Article 48, item 15, Article 67 of the Constitution,
III The representative of the party concerned has explained that the request of the petitioner is not a grounded one and that the disputed items of the stamp tax rates confirmed by the 11 November 1994 Resolution No.1123 of the Government are in compliance with the Constitution,
with the Law on Stamp Tax and the Law on Competition, and has presented the following counter-arguments. In her opinion, the petitioner inaccurately interprets Article 6 of the Law on Stamp Tax, i.e., that only such office shall be maintained by this tax which performs actions and grants documents bearing legal power for which the aforesaid tax is collected. Article 6 of the Law on Stamp Tax provides that stamp tax shall be included into the budget which maintains offices performing actions and granting documents which bear legal power and for both of which the aforesaid tax is collected, although this, in the opinion of the representative of the party concerned, does not mean that this tax is allocated only to maintain the office which collects stamp tax. Stamp tax,
other taxes established by the laws of the Republic of Lithuania, and also other payments into the budget make revenues of the budgets of the Government and municipalities from which all budget offices are maintained. The representative of the party concerned argues that the Government by establishing the rates of stamp tax did not take the competence of the Seimas and did not excel its jurisdiction as do to so it is authorised by the law, therefore it and no one other decides on what criteria the procedure of licensing is established. Regarding the allegation of the petitioner that the Government by groundlessly increasing the rates of stamp tax restricts freedom of individual economic activity and initiative,
people’s opportunity to freely choose business, the representative of the party concerned has explained that the Government establishes stamp tax on only such activity which is either not urged, or very profitable (trading with alcoholic beverages, organising lotteries, buying up metals and their processing, providing with international telecommunications services, import and export of oil-products, etc.). In her opinion, the remaining rates of stamp tax are not high (5, 10, 25, 100, 150 Lt). The representative of the party concerned also contends that the petitioner by alleging that the rates of stamp tax restrict competition and impede creating new economic entities,
changing the manner of their activity, should present the data which must be grounded with the corresponding economic analysis of commercial-economic activity of economic entities because without such data it is impossible to draw a conclusion if the rates of stamp tax established by the Government really impede creating new economic entities,
changing the manner of their activity. In the court hearing the representatives of the petitioner,
those of the party concerned confirmed their statements. The Constitutional Court holds that: Taxes are one of the oldest financial institutes which is used to generate revenues necessary for the state. Modern states make use of other payments as the state budget revenues as well. Finance law defines taxes as obligatory and not individually compensated contributions of legal and natural persons established by state bodies into the state (municipal) budgets (in certain cases - into non-budget purposive funds) by indicating their amount and time limits of the payment. The main object of taxes is the fiscal one, therefore they are utilised as the revenue resource of the state budget which is assigned to meet the interests of society and state. In addition, socio-economic processes of the state are regulated by taxes. After the reinstatement of the independent state of Lithuania, the reform of the system of taxes began to be implemented. As far back as 1990 Law on Taxes on Profits of Legal Persons and Provisional Law on Income Tax of Natural Persons were adopted. Later, in 1993, Law on Value-Added Tax was passed, in 1994 - Law on Excise Taxes,
other laws regulating taxes were adopted. On 28 June 1995 the Law on Tax Administering was passed (Official Gazette “Valstybës Þinios”, No.61-1525, 1995), Article 5 whereof gives the list of the taxes applied in the Republic of Lithuania. A unified tax system, which comprises all taxes and other payments and dues, has been created by tax laws,
by this law. 1. On the compliance of items 5, 6, 7, 8, 16, 17, 19, 27.4-27.9, 29, 34, 36 of the stamp tax rates confirmed by the 11 November 1994 Resolution No.1123 of the Government “On the confirming the rates of stamp tax,
the procedure of payments and returning of stamp tax” with item 15, Article 67 of the Constitution,
It is consolidated in item 15, Article 67 of the Constitution that the Seimas shall “establish State taxes and other obligatory payments”. Article 2 of the Law on Tax Administering defines the notion of the tax as “monetary contribution for the state imposed upon the tax payer by the law on taxation, so that the state (municipality) may receive revenues to perform its functions”. In order to assess whether the Government was competent to establish the rates of stamp tax, one must make clear as to what is the position of stamp tax in the system of the state revenues established by the state as a legal form of such revenues (payments), and how the contents of stamp tax legal relations differ from other payments. In Part 2, Article 127 of the Constitution it is established: “State Budget revenues shall be accrued from taxes, compulsory payments, dues, receipts from State property, and other income.” Thus, according to the Constitution, five legal forms of the state budget revenues may be singled out: regular taxes, other compulsory payments, dues, receipts from the state property, and other income. They are specified in particular laws. Stamp tax is not mentioned in the Constitution, therefore it belongs to one of the aforesaid legal forms of the state budget revenues. When comparing the legal forms of the budget revenues mentioned in item 15, Article 67 with the provisions of Article 127 of the Constitution, a conclusion is to be drawn that not every legal form of the budget revenues has the same legal meaning and regulation. It means that the Constitution establishes an opportunity for the Seimas to variously regulate the state budget revenues while considering their legal forms. According to Article 2 of the Law on Tax Administering, the law on taxation is “the law of the Republic of Lithuania which shall establish the tax, due, or other payment into the state (municipality) budget...”. Stamp tax was introduced with the adoption of the Law on Stamp Tax on 23 June 1994, which entered into force on 1 January 1995. Until the adoption of the Law on Stamp Tax, the said legal relations were regulated by the 12 March 1993 Resolution No.163 of the Government “On State Dues”. Stamp tax, even though it is called a tax, in its essence is different from taxes (regular taxes) in their proper sense as its nature is that of a direct recompense. This tax is collected for actions performed by the state institutions,
for granted documents bearing legal power (Article 1 of the Law on Stamp Tax). As a rule, such payments are paid only once. Meanwhile, the characteristic of taxes is that they are paid regularly during established time limits, and their nature is not that of direct recompense, i.e., after they had been paid to the state which accepted the said tax, the aforementioned institution has no obligation to perform any actions or render any particular service for the tax payer. Recompense is characteristic of such a legal form of the state budget revenues as the due. Article 2 of the Law on Tax Administering defines the due as “a monetary contribution for a person for particular services rendered to him by the state institutions. Dues are a supplementary revenue resource to perform the state (municipality) functions”. Thus the general contents of legal relations of the state due are analogous to those of stamp tax. They differ from each other in merely being the general and special legal notions. In addition, stamp tax,
the due, has a two-way character, as the subjects of the legal relations which occur after the stamp tax has been paid have the corresponding rights and obligations. According to Article 2 of the Law on Stamp Tax, “stamp tax shall be paid by legal and natural persons to the state institutions for performed actions, or granted documents bearing legal power”. Therefore, the state institution which collects stamp tax and which is the compulsory subject of the said legal relations must perform corresponding actions in favour of the tax payer, e.g., to give a licence of taking up a particular activity, to render certain services, etc. On the other hand, the stamp tax payer is entitled, in his turn, to demand that the state institutions which collected the tax should perform corresponding actions, or render a particular service to the tax payer. Such a two-way link of subjects’ rights and obligations of the legal relations which occur after the said taxes have been paid entails them the nature of recompense. Unlike regular taxes, which are always compulsory, stamp tax, along with other taxes, may be either compulsory, or voluntary. The character of compulsory dues reveals itself in that when they are not paid in the cases provided for, they will be exacted by the procedure established by law. However, the essentials of regular taxes and those of compulsory dues, hence of stamp tax as well, are different: taxes are paid providing there exists a permanent object subject to taxation, whereas there are two essentials of paying compulsory dues: the object subject to taxation and the actions performed, or services rendered by the competent institutions of the state to legal,
natural persons. As a rule, most dues,
stamp tax, are voluntary payments, i.e., a person, who desires to get some service or a particular action from a state office, consents to pay stamp tax or any other due before the actions are performed, or documents bearing legal power are granted, and on such basis he becomes entitled to demand that the requested actions be performed, or that the documents he wants be granted. Article 6 of the Law on Stamp Tax establishes that “stamp tax shall be included into the budget which maintains offices performing actions and granting documents which bear legal power and for both of which the aforesaid tax is collected”. It does not mean, however, that the said tax is allocated for only the office which collects it. Stamp tax is included into the budget which maintains all budget offices, not to mention the office collecting the said tax. It is established in Part 1, Article 127 of the Constitution: “The budgetary system of the Republic of Lithuania shall consist of the independent State Budget of the Republic of Lithuania and the independent local governments budgets.” According to Part 1, Article 11 of the Law on Budgeting, the state budget of the Republic of Lithuania shall be a centralised fund of financial resources. Part 2 of the said article stipulates: “Financial resources accumulated in the State Budget of the Republic of Lithuania shall be used for financing national needs.” Article 13 of the said law enumerates particular national needs for which appropriations from the state budget shall be made. In particular, item 7 of this Article establishes: “maintenance of state power, state government and law enforcement institutions”. Financial resources to satisfy the needs of local governments are reapportioned through the state budget as well. On the ground of the mentioned above, it is impossible to assert that the Government by establishing the rates of stamp tax took the competence of the Seimas because it was the Seimas, and not the Government, which introduced stamp tax after passing the Law on Stamp Tax. In Part 1, Article 3 of this law the object of taxation is established, i.e., it is indicated what stamp tax is collected for, whereas in Part 2 of the said Article it is established: “The rates of stamp tax save for the cases under investigation in courts or copies of granted documents shall be established by the Government of the Republic of Lithuania”. According to item 2, Article 94 of the Constitution, the Government shall “implement laws and resolutions of the Seimas concerning the implementation of laws”. That is also provided for in item 2, Article 21 of the Law on the Government. The Government by establishing the rates of stamp tax fulfilled the provision of the law. Thereby it did not violate the provision of item 15, Article 67 of the Constitution as it merely established the rates of stamp tax, but did not establish new taxes, or other obligatory payments. Thus a conclusion should be made that the disputed items of the stamp tax rates confirmed by the 11 November 1994 Resolution No.1123 of the Government are in compliance with item 15, Article 67 of the Constitution,
with Article 6 of the Law on Stamp Tax. 2. On the compliance of items 5, 6, 7, 8, 16, 17, 19, 27.4-27.9, 29, 34, 36 of the stamp tax rates confirmed by the 11 November 1994 Resolution No.1123 of the Government “On the confirming the rates of stamp tax,
the procedure of payments and returning of stamp tax” with Article 46 and Part 1, Article 48 of the Constitution,
The petitioner in his request contends that the Government by establishing groundlessly high rates of stamp tax restricts freedom of individual economic activity and initiative,
people’s opportunity to freely choose business, and that these actions of the Government create conditions to monopolise market and impede competition. 1. The provision of Part 1, Article 46 of the Constitution “Lithuania’s economy shall be based on the right to private ownership, freedom of individual economic activity, and initiative” is tightly connected with people’s right established in Part 1, Article 48 of the Constitution to freely choose an occupation or business. Both of the said provisions are also linked to the principle established in the Constitution of people’s equality before the law, the court, and other state institutions (Part 1, Article 29 of the Constitution),
with the provision of Part 3, Article 46 of the Constitution, that the state shall regulate economic activity so that it serves the general welfare of the people. All these constitutional provisions by conditioning each other constitute constitutional preconditions to pass laws which respond to the conditions of national economy, the diversity and change of economic and social life. The Constitutional Court has already held that law may establish different legal regulation concerning certain categories of people who are in different situation. This should also be applied to legal persons, and not only to natural persons as the former are, as a rule, corporations of natural persons (the Constitutional Court 28 February 1996 ruling - Official Gazette “Valstybës Þinios”, No.20-537, 1996). Thus people’s right to freely choose one or another type of the occupation or business may be regulated by varied manner. This right is first linked to manifold natural requirements, i.e., to skills and capacities of every person. These requirements may be diverse: the possession of corresponding training, moral and other qualities (e.g., physicians, teachers, judges, public prosecutors, etc.), acquiring a specific license (e.g., drivers), etc. The opportunity to freely choose business is also restricted by natural requirements, e.g., the possession of the initial capital. In fact, a person with no necessary material condition would not make use of this right. Therefore, a person when choosing an occupation or business knows in advance that he is supposed to have an adequate training, or pay particular taxes, and, according to his skills or capacities, decides what to choose. It is most important that the opportunity of free choice for a person were not restricted directly, by the normative manner, i.e., the person may not be prohibited to choose a particular occupation or business. The rate of a tax or a due in particular does not restrict people’s right to freely choose an occupation or business. Assuming that one or another tax rate restricts people’s right to freely choose an occupation or business, a conclusion can be reached that taxes as such which are imposed on the entities of a particular branch of economy or business restrict the said right of people. 2. It is established in Part 4, Article 46 of the Constitution: “The law shall prohibit monopolisation of production and the market, and shall protect freedom of fair competition.” In Article 2 of the Law on Competition the competition is defined as emulation during which economic entities, by acting independently in the market, restrict one another’s abilities to attain a dominant position in that market. The statement of the petitioner that groundlessly high stamp tax rates restrict competition as they impede creating new economic entities and, therefore, contradict Article 6 of the Law on Competition, is to be estimated as a general precondition, as this precondition is not grounded on the legal facts of application of particular rates for individual economic entities. Meanwhile, if different amounts for individual branches of economy of stamp tax rates were regarded as restricting competition, then, on the whole, it would mean denial of the possibility to regulate economic activity in such a way that the conditions of national economy, the diversity and change of economic and social life were taken into account. The stamp tax rates established by the Government would restrict competition if they were different for the same categories of persons (those of a branch of economy or business), i.e., if for certain economic entities they were of one kind, and for others they were different. Then some persons would be discriminated, while others would be granted privileges. Meanwhile, the Government has established equal stamp tax rates for all entities of the same type of economy or business. The allegation of the petitioner that such actions of the Government create conditions to monopolise the market is to be estimated analogously. The establishment of stamp tax rates does not of itself mean that conditions are created to monopolise the market, i.e., to introduce monopoly. The monopoly is understood as an exclusive right of a person, or a group of persons, or a state to operate in a certain field. Meanwhile, the Government by establishing different stamp tax rates for individual branches of economy or business has not granted any exclusive right for any economic entity or group of persons to operate in an individual field of economy or business, and thereby did not restrict freedom of economic activity and initiative. Taking into account the motives set forth, a conclusion is to be made that the disputed items of the stamp tax rates confirmed by the 11 November 1994 Resolution No.1123 of the Government are in compliance with Article 46 and Part 1, Article 48 of the Constitution,
Conforming to Article 102 of the Constitution of the Republic of Lithuania and Articles 53, 54, 55 and 56 of the Law of the Republic of Lithuania on the Constitutional Court, the Constitutional Court of the Republic of Lithuania has passed the following ruling: To recognise that items 5, 6, 7, 8, 16, 17, 19, 27.4-27.9, 29, 34, 36 of the stamp tax rates confirmed by the 11 November 1994 Resolution No.1123 of the Government of the Republic of Lithuania “On the confirming the rates of stamp tax ,
the procedure of payments and returning of stamp tax” are in compliance with the Constitution of the Republic of Lithuania, Article 6 of the Law of the Republic of Lithuania on Stamp Tax,
This Constitutional Court ruling is final and not subject to appeal. The ruling is promulgated on behalf of the Republic of Lithuania. Justices of the Constitutional Court: Algirdas Gailiûnas Kæstutis Lapinskas Zigmas Levickis Vladas Pavilonis Pranas Vytautas Rasimavièius Stasys Staèiokas Teodora Staugaitienë Stasys Ðedbaras Juozas Þilys
DI paaiškinimas pagal oficialų įstatymo tekstą. Orientacinis, nepakeičia teisinės konsultacijos.