Appeal to Supreme Court (english)
Supreme Court of the Netherlands (tax division)
PO Box 20303
2500 EH The Hague
5 September 2009
Appeal to the Supreme Court in case number: BK/M3-08/00242
Legal action by: De Hutte Holding BV c/o Montjaux France / Dutch Tax and Customs Administration Office, division East, Doetinchem office in Almelo.
assessment/decision no.: 64.57.502.V.70.0112
On 28 July of this year the Court of Appeal in Arnhem gave its decision on appeal in case BK/M3-08/00242
The Court of Appeal expressed the following:
4. Assessment of the dispute
- The stakeholder declared in court that their point of view can be presented as follows. The current practice of paying remuneration (in the form of interest) when capital is provided has no actual economic basis, given that money in itself has no value. This leads to a disruption of the balance of power or trade in favour of those who have capital at their disposal. The demand for or payment of remuneration (interest) for the provision of capital should, for this reason, not be permitted and, according to the stakeholder, it is not permitted. In this case, they refer to international treaties, particularly the Convention for the Protection of Human Rights and Fundamental Freedoms (hereafter referred to as ECHR). Now that it is not permitted to remunerate the provision of capital, the stakeholder holds the view that, it is a fortiori prohibited to consider interest a taxable profit and to tax it as such. What is not being disputed is that, if charging interest is not prohibited, the inspector has rightfully considered the interest by the stakeholder to be part of such profit
- The court expressly sets aside the question of whether a ban on charging interest is advisable, as the stakeholder suggests. The court only finds that interest is charged in business transactions relating to capital provisions and that this does not conflict with any national or international legal rule. In relation to ECHR, the court infers this from the fact that the European Court of Human Rights also imposes the obligation on parties to pay interest on payments imposed by the European Court in case these are made after the expiry of the term of payment set by the Court (see for example, ECHR 16 April 2002, S.A. Dangeville v. France, Application no. 36677/97, in which the following was decided. “(b) that from expiry of the above-mentioned three months until settlement simple interest shall be payable on the above amounts at a rate of 4.26% per annum.”
4.3 The appeal miscarries.
I1cannot argue that it is currently prohibited for a tax inspector to collect taxes deriving from interest. This type of income has become so normal and self-evident in our society that it cannot be argued that collecting taxes on interest income conflicts with tax laws. I have stated that requesting and paying interest and, consequently, tax legislation conflict with the spirit of the fundamental rights in the Dutch constitution and the European Convention on Human Rights. That the court’s ruling made use of the fact that the European Court of Human Rights also demands payment of interest only illustrates the conditioned and self-evident nature of our society in relation to the assumption that money is worth money in the form of interest. However, the assumption presented for legal consideration that money is worth money is yet to be carefully weighed up in a legal context.
The assumption that money is worth money has led to such things as:
- A great deal of legislation conflicting with international treaties and fundamental rights in the Dutch constitution.
- A politico-economic and seemingly also legal lexical confusion because our economic communication has been split into a real and a virtual economy. This could be called economic schizophrenia.
- A centralised concentration of power referred to as ‘the financial world’ at the expense of the real economy, democracy and constitutional state.
- A bureaucratic delusion as a result of which we are not in a position to deal with the social challenges of the here and now.
In a letter to Prime Minister Balkenende2 dated 9 June 2006, I made the following appeal:
Is there a place in our State of Law, where where the chronical social injustice can appear for trial, withour being hanged on forehand by the jurdical and bureaucratic machinery?
It is not about the money,neither an ordinary battle between a company and the Tax and Customs administration, instead it is about the fundamental functioning of our economic communication and the foundations of our State of Law and democracy, wich today we can consider as maffian, kafkian, chronical injust and anti democratic. M. Balkenende, your government has without a doubt a number of arguments to let aside this problem. Pschycholoical I can fully understand that, but it will stay a painfull question we have to treat soner or later individual and as a whole. Today we all are cowards, believing in a juridical and bureaucratic lever, a political-economic bubble without roots in society at the cost of our environment, democracy, state of law and the weak in our society.
Legally speaking, it is not the workings of the Tax and Customs Administration office and the Tax inspector that are under discussion; they simply do what they have been instructed to do within the politico-economic context that we can nowadays regard as normal in Dutch society. No, what I have contended from the beginning in my correspondence with the Prime Minister, the Supreme Court, the Dutch House of Commons, the Tax inspector and in the legal action at the District Court and Court of Appeal is that the 5,000-year-old assumption that money is worth money in the form of interest be weighed up in a legal context. This issue came nowhere near to being evaluated at either the District Court or the Court of Appeal. The following observation by the President of the Court of Appeal illustrates this: “You do not think that we will be questioning the financial system here, do you?” This is a door that remained closed during the legal action, but deserves to be opened to be able to evaluate the issues raised in a truly legal manner.
However, are we not going to end up in a legal no man’s land by evaluating an assumption that is more than five thousand years old? Five thousand years ago the situation on earth was incomparable to today’s. With a world population approximating seven billion people, the challenges are incomparable to those of five thousand years ago. Do we really think that we can provide them with food, clothing, clean drinking water, housing, education and health care3 from the increasing economic growth/profit?
We do not need to be clairvoyant to see that sooner or later this growth will kill us or choke us to death. An individual’s progress towards adult life is based on growth, after which it is primarily a search for the right balance. A politico-economic system that is primarily based on growth and taking more than we invest indicates in fact that it is not willing to grow up. Do we have the individual, political, legal and commercial courage to question our own performance as part of the whole, in this case Dutch society, in order to try to redress the balance? Is the Netherlands much too small to do something like this? Should this be organised internationally and from above? Then we might as well wait until we are blue in the face, as absolutely nothing will change to create a healthy and just equilibrium. The only change we can make is within ourselves. Only then will the world around us start to move because we have become aware that we form an essential part of Dutch society. This is nothing more than the aims laid out in the fundamental rights in the Dutch constitution and those stated in the European Convention on Human Rights. What we appear to have forgotten along the way is that this is our duty and not the exclusive task of an institute or a far-removed system at work.
I have attempted to highlight the discrepancies between the aims of international human rights, Dutch fundamental rights and the very inconsiderate and blind execution of tax legislation, which is based on the assumption that money is worth money. This is not about finger-pointing, but about raising awareness of the challenges we are facing together
I hope that the Supreme Court will use its legal powers to ensure that the unjust imbalance surrounding the assumption that money is worth money in the form of interest is clear to Dutch legislators and deserves to be redressed.
De Hutte Holding BV
C/o Château de Roquetaillade
1 I do not consider myself a plaintiff or stakeholder in the personal sense of the world, but in the sense that I am a member of society.
2 A copy of this letter was sent to the Dutch Supreme Court at that time.
3 Article 25 of the universal declaration of human rights (UN)
- Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.