Judgment (Merits and Just Satisfaction) of Court (Second Section Committee), March 17, 2015 (case CASE OF KEPECS v. HUNGARY)

Judge:MAGYAR G.
Defense:HUNGARY
Resolution Date:March 17, 2015
Issuing Organization:Court (Second Section Committee)

SECOND SECTION

CASE OF KEPECS v. HUNGARY

(Application no. 65499/11)

JUDGMENT

STRASBOURG

17 March 2015

This judgment is final but it may be subject to editorial revision.

In the case of Kepecs v. Hungary,

The European Court of Human Rights (Second Section), sitting as a Committee composed of:

             Helen Keller, President,              András Sajó,              Robert Spano, judges,and Abel Campos, Deputy Section Registrar,

Having deliberated in private on 17 February 2015,

Delivers the following judgment, which was adopted on that date:

PROCEDURE

  1. The case originated in an application (no. 65499/11) against Hungary lodged with the Court under Article 34 of the Convention for the Protection of Human Rights and Fundamental Freedoms (“the Convention”) by a Hungarian national, Mr György Kepecs (“the applicant”), on 17 October 2011.

  2. The applicant was represented by Mr G. Magyar, a lawyer practising in Budapest. The Hungarian Government (“the Government”) were represented by Mr Z. Tallódi, Agent, Ministry of Public Administration and Justice.

  3. The applicant complained that the imposition of 98% tax on part of his severance payment was contrary to Article 1 of Protocol No. 1.

  4. On 6 June 2014 the application was communicated to the Government.

    THE FACTS

    1. THE CIRCUMSTANCES OF THE CASE

  5. The applicant was born in 1947 and lives in Budapest.

  6. From 1 October 2003 the applicant was employed with a State-owned gambling service provider.

  7. On 28 June 2010 the applicant’s employment was terminated as of 27 October 2010. The employer paid the applicant severance payment, subject to payroll burdens, which consisted of payment for unused annual leave and an additional two months’ salary.

  8. Under new legislation (see paragraph 9 below) the severance payment was subsequently taxed at a 98% rate in its part exceeding 3.5 million Hungarian forints (HUF); the income tax and social security contributions already paid (see paragraph 7 above) were deducted from the tax payable. Thus, the applicant paid an additional HUF 3,588,701 (approximately 11,300 euros (EUR)) in special tax on 17 May 2011.

    1. RELEVANT DOMESTIC LAW

  9. For relevant domestic law, see the judgments N.K.M. v. Hungary (no. 66529/11, §§ 8-19, 14 May 2013); Gáll v. Hungary (no. 49570/11, §§ 8-18, 25 June 2013) and R.Sz. v. Hungary (no. 41838/11, §§ 8-17, 2 July 2013).

    THE LAW

    ALLEGED VIOLATION OF ARTICLE 1 OF PROTOCOL NO. 1 OF THE CONVENTION

  10. The applicant complained about the...

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