CASE OF BAK AND OTHERS v. HUNGARY
Violation of Article 1 of Protocol No. 1 - Protection of property (Article 1 para. 1 of Protocol No. 1 - Peaceful enjoyment of possessions)
Egidijus Kūris;Vincent A. De Gaetano;Gabriele Kucsko-Stadlmayer
1. The case originated in an application (no. 52257/11) against Hungary lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by eleven Hungarian nationals, Mr Tibor Bak, Mrs Lászlóné Csatári, Mr István Csillag, Mr András Halász, Ms Boglárka László, Mr Zoltán Lex, Mr Márk Marsi, Mr Sándor Orosz, Mrs Klára Pápainé Armuth, Mr György Rosta and Mr Attila Széles (“the applicants”), on 8 August 2011. A list of applicants is annexed to the present judgment. 2. The applicants were represented by Mr Cs. Tordai, a lawyer practising in Budapest. The Hungarian Government (“the Government”) were represented by Mr Z. Tallódi, Agent of the Ministry of Justice. 3. On 31 August 2015 the applicants’ complaint under Article 1 of Protocol No. 1 to the Convention concerning the imposition of 98% tax on part of their severance payment was communicated to the Government. 4. On 10 November 2015 and 9 June 2016 the Court received friendly settlement declarations signed by the Government and seven applicants under which the latter agreed to waive any further claims against Hungary in respect of the facts giving rise to their complaints against an undertaking by the Government to pay Mrs Lászlóné Csatári 20,600 euros (EUR), Mr István Csillag EUR 19,300, Mr Zoltán Lex EUR 46,700, Mr Márk Marsi EUR 8,300, Mr Sándor Orosz EUR 28,300, Mr György Rosta EUR 16,000, and Mr Attila Széles EUR 11,100, to cover any pecuniary and non-pecuniary damage as well as costs and expenses. These sums will be converted into the currency of the respondent State at the rate applicable on the date of payment, and will be free of any taxes that may be applicable. They will be payable within three months from the date of notification of the strike-out decision taken by the Court. In the event of failure to pay these sums within the said three-month period, the Government undertook to pay simple interest on them, from the expiry of that period until settlement, at a rate equal to the marginal lending rate of the European Central Bank during the default period plus three percentage points. The payment will constitute the final resolution of the case in respect of these seven applicants. 5. The first applicant, Mr Tibor Bak was born in 1965 and lives in Dunakeszi. From June 2002 he was employed at the State-owned National Development Bank Ltd. His employment was terminated by mutual agreement in June 2010. The upper bracket of his severance payment was taxed at 98% rate. The Government did not contest the levy of the special tax on his severance payment; but in their observations they rectified the tax amount. The first applicant did not contest this. Accordingly, special tax was levied on his severance payment in the amount of 7,617,826 Hungarian Forints (HUF) (approximately EUR 25,400). 6. The fourth applicant, Mr András Halász was born in 1961 and lives in Budapest. From October 2002 he was employed at the State-owned National Export-Import Bank Ltd. His employment was terminated on 29 October 2010. The upper bracket of his severance payment was taxed at 98% rate. The Government did not contest the levy of the special tax on his severance payment; but in their observations they rectified the tax amount. The fourth applicant did not contest this. Accordingly, special tax was levied on his severance payment in the amount of HUF 9,125,270 (approximately EUR 30,400). 7. The fifth applicant, Ms Boglárka László was born in 1967 and lives in Budapest. From April 2007 she was employed at the State-owned MFB Investment Ltd. Her employment was terminated by mutual agreement on 29 October 2010. The upper bracket of her severance payment was taxed at 98% rate. The Government did not contest the levy of the special tax on her severance payment; but in their observations they rectified the tax amount. The fifth applicant did not contest this. Accordingly, special tax was levied on her severance payment in the amount of HUF 6,508,053 (approximately EUR 21,700). 8. The ninth applicant, Mrs Klára Pápainé Armuth was born in 1957 and lives in Budapest. From January 2008 she was employed at the State-owned National Asset Management Ltd. Her employment was terminated by mutual agreement in 2010. The upper bracket of her severance payment was taxed at 98% in the amount of HUF 2,932,623 (approximately EUR 9,700). The Government did not contest this. In a letter dated of 17 March 2016 the ninth applicant submitted that due to some special accounting methods applied in her case, she had received further bonuses from her previous employer calculated pro rata temporis for the years of 2011 and 2012; in respect of these bonuses additional special tax had been levied in the amount of altogether HUF 829,119 (approximately EUR 2,700). The applicant received a certificate from her employer regarding the deduction of special tax from the subsequently received bonuses on unspecified dates in 2011 and 2012.