Local taxes and duties levied on spas and other health resorts K 22/12
Taxes on immovable properties related to the provision of healthcare services are consistent with the Constitution.
At the hearing on 26 September 2013 at 10.00 a.m., the Constitutional Tribunal considered an application, submitted by the City Council of Kołobrzeg, with regard to a tax on immovable properties related to the provision of healthcare services.
The Constitutional Tribunal adjudicated that Article 5(1)(2)(d) of the Local Taxes and Duties Act of 12 January 1991 was consistent with Article 167(1) and (4) in conjunction with Article 16(2) of the Constitution in conjunction with Article 9(1), (2) and (3) in conjunction with Article 12(1), seventh indent, of the European Charter of Local Self-Government, done at Strasbourg on 15 October 1985, as well as was not inconsistentwith Article 15(1) and (2) of the Constitution.
The Constitutional Tribunal stated that, by amending the wording of Article 5(1)(2)(d) of the Local Taxes and Duties Act of 12 January 1991 in 2010 and 2011, the legislator had extended the range of situations in which a (lower) “preferential” rate of an immovable property tax was to be applied. The “use” of a building or part thereof for the provision of healthcare services meant that healthcare services were directly (actually) provided in a given place. By contrast, “relating” a building or part thereof to the provision of healthcare services meant, in a given place, that healthcare services might, but did not actually have to, be provided, but there needed to be a relation between the building or part thereof with the provision of healthcare services. The Constitutional Tribunal stated that Article 5(1)(2)(d) of the Local Taxes and Duties Act of 12 January 1991 should be interpreted on the basis of the premiss concerning the scope ratione personae and the scope ratione materiae, i.e. buildings or parts thereof used by entities which provided healthcare services had to, at the same time, remain related to the healthcare services. The addressee of that provision, in both its parts, was the same entity.
The Constitutional Tribunal pointed out that the principle of financial independence concerning the units of local self-government, arising from Article 167(1) and (4) in conjunction with Article 16(2) of the Constitution as well as Article 9(1), (2) and (3) in conjunction with Article 12(1), seventh indent, of the European Charter of Local Self-Government, done at Strasbourg on 15 October 1985, was not absolute in character and the legislator had freedom as regards determining the sources of revenue generated by the units of local self-government and the level of the revenue. The said freedom of the legislator also comprised the possibility of modifying the existing sources of revenue generated by the units of local self-government or the level thereof. However, the said modifications should be introduced solely by statute as well as should be justified by constitutionally set objectives and constitutionally protected values.
The Constitutional Tribunal deemed that a change in the scope of applying the “preferential” rate of the immovable property tax on buildings or parts thereof related to the provision of healthcare services had been introduced by statute and was linked with the protection of constitutional values such as, for example, the right to health protection (Article 68 of the Constitution).
Also, the Constitutional Tribunal pointed out that the exercise of the freedom to modify the sources of revenue generated by the units of local self-government on the part of the legislator might lead to negative consequences for those units. However, in order to preserve the constitutionally protected independence of the units of local self-government, the essence of their financial independence might not be breached in a drastic way, as that would lead to an obvious disproportion between the scope of the entity’s activity and the level of its revenue.
The Constitutional Tribunal stated that the applicant had not proved that, when modifying the amounts of revenue generated by the communes ‑ by extending the scope of applying the “preferential” rate of the immovable property tax – the legislator had drastically breached their financial independence or had caused an obvious disproportion between the tasks of the units of local self-government and their revenue.
The Constitutional Tribunal stated that, with regard to communes where spas and health resorts were located, and which had been burdened with additional tasks related to their special character, the legislator had granted additional sources of revenue, such as a spa and health resort tax or subsidies paid out from the state budget.
Due to the fact that the applicant had not challenged the way in which the system of the organs of the state was organised which would breach the centralised organisation of public authority, the Constitutional Tribunal deemed that Article 15(1) and (2) of the Constitution constitutes an inadequate higher-level norm for the review in the case under examination.
The Constitutional Tribunal noted that the content of Article 9(1), (2) and (3) in conjunction with Article 12(1), seventh indent, of the European Charter of Local Self-Government, which were indicated as the higher-level norms for the review, was reflected in Article 167 of the Constitution, and hence there was no need to carry out separate examination in that regard.
The hearing was presided over by Judge Maria Gintowt-Jankowicz, and the Judge Rapporteur was Judge Mirosław Granat.
The judgment is final and its operative part shall be published in the Journal of Laws.