Constitutional Court

KO177/23, Applicant: Municipality of Prizren, constitutional review of Article 5 of Law No. 08/L-224 on Amending and Supplementing Law No. 06/L-005 on Immovable Property Tax

KO177/23, Interim measures adopted on 1 September 2023, published on 15 September 2023

Key words: Referral by Municipality, constitutional review of article of law, competences of the Municipality

The Constitutional Court of the Republic of Kosovo has decided on the request for interim measures in case KO 177/23, regarding the constitutional review of Article 5 of Law No. 08/L-224 on Amending and Supplementing Law No. 06/L-005 on Immovable Property Tax, which entered into force on 16 August 2023. The request for the constitutional review of Article 5 of the above-mentioned law of the Assembly has been submitted to the Court by the Municipality of Prizren, based on the authorizations specified in paragraph 4 of Article 113 [Jurisdiction and Authorized Parties] of the Constitution of the Republic of Kosovo.

The Court, unanimously, has decided that the request for imposing an interim measure regarding the above-mentioned act is granted for the period until 30 November 2023, and consequently, the implementation of Article 5 of Law No. 08/L-224 on Amending and Supplementing Law No. 06/L-005 on Immovable Property Tax is suspended.

The Court’s decision initially clarifies that based on paragraph 4 of Article 113 of the Constitution, the municipality is authorized to challenge the constitutionality of laws or acts of the Government that infringe upon municipal responsibilities or reduce municipal revenues, in cases where the respective municipality is affected by such law or act. Based on this provision, the Municipality of Prizren requests the constitutional review of Article 5 of Law No. 08/L-224 on Amending and Supplementing Law No. 06/L-005 on Immovable Property Tax. This article establishes that (i) any taxpayer obliged to pay the immovable property tax for the 2023 tax year qualifies for tax amnesty; (ii) the amount of property tax amnesty for all taxpayers is allowed up to the amount of the property tax invoice for 2023 but not exceeding one hundred (100) Euro; (iii) the decision on property tax amnesty is issued by the municipal assembly of each municipality no later than 30 days from the entry into force of this law; (iv) in cases the taxpayer has paid the property tax invoice for 2023, the amnesty amount is calculated as an advance payment for the following years; (v) the implementation of this provision remains the responsibility of each municipality responsible for administering the property tax process for immovable properties located within the municipality’s territory, and the responsible Ministry of Finance issues decisions that may be necessary for the implementation of this provision.

The Municipality of Prizren alleges that the above-mentioned provision infringes upon municipal responsibilities and reduces the municipal revenues contrary to (i) the constitutional guarantees set forth in paragraph 2 of Article 12 [Local Government], paragraphs 1 and 3 of Article 123 [General Principles] and paragraphs 2, 3 and 5 of Article 124 [Local Self-Government Organization and Operation] of the Constitution; (ii) the European Charter of Local Self-Government; and (iii) Law No. 03/L-40 on Local Self-Government, Law No. 03/L-49 on Local Government Finance and Law No. 06/L-005 on Immovable Property Tax, essentially because they interfere, among other things, with the exercise of the municipality’s own competencies related to the immovable property tax revenues and impact the municipal budget up to the amount of €3 million, while at the local government level in the Republic of Kosovo, up to the amount of €27 million according to the referenced data from the Association of Kosovo Municipalities. According to the explanations provided in the Court’s Decision, the Municipality of Prizren also requests from the Court that, pending its final decision based on merits regarding the constitutional review of Article 5 of the contested Law, impose an interim measure suspending its effects. 

In relation to the request for imposing an interim measure, as far as it is relevant in the specific circumstances of the case, the criteria for its imposition are defined by Article 116 [Legal Effect of Decisions] of the Constitution, Article 27 (Interim Measures) of the Law on the Constitutional Court and Rules 44 (Request for Interim Measures) and 45 (Decision-making Regarding the Request for Interim Measure) of the Rules of Procedure of the Court. According to these provisions, it is required, among other things, that the interim measure should be related to (i) “the issue that is the subject of the procedure before it [the Court]”, provided that the party requesting the interim measure demonstrates that (ii) the interim measure is necessary “to prevent irreparable harm or damages” or that the interim measure is in the “public interest”.

In the above-mentioned context, the Court’s Decision clarifies that the subject of examination before the Court is Article 5 of the contested Law and that the same, based on facts and allegations presented therein, raises constitutional-level issues that, among other things, are related to the exercise and management of municipalities’ own competencies, as well as their right to decide, collect and spend their revenues in accordance with the provisions of the Constitution and applicable laws in the Republic of Kosovo. Furthermore, the implementation of Article 5 of the contested Law within the specified timeframes therein, namely thirty (30) days from the entry into force of the law, (i) on the one hand, may affect the exercise of municipal competencies regarding the immovable property tax revenues for 2023, while (ii) on the other hand, it may also affect the rights and obligations of all citizens of the Republic of Kosovo in relation to immovable property tax.

The Court’s Decision also clarifies that in the specific circumstances of the case, suspending the effects of Article 5 of the contested Law may (i) “prevent irreparable harm or damages” related to actions taken by the local authorities according to the provisions and deadlines specified in the contested Law, and (ii) the constitutional review, specifically Article 5 of the contested Law, before its implementation, is in the “public interest”, as it serves legal certainty concerning the legal consequences of the contested Law regarding the exercise of municipal responsibilities and the management of municipal immovable property tax revenues on one hand, and the immovable property tax amnesty for taxpayers on the other one.

Furthermore, imposing an interim measure on Article 5 of the contested Law, specifically suspending its effects until the Court’s decision is reached, does not create consequences for the citizens of the Republic of Kosovo concerning the rights that may arise from the provision concerned. This is without prejudice to the Court’s constitutional review of contested provision because, if the Court finds that Article 5 of the contested Law (i) is not in compliance with the Constitution, it would prevent the infringement of municipal responsibilities and/or the reduction of municipal revenues, while if the Court finds that the same (ii) is in accordance with the Constitution, municipalities would be able to implement Article 5 of the contested Law, and citizens could still benefit from the immovable property tax amnesty according to the relevant decisions of municipal assemblies, and the amnesty amount would be calculated as an advance payment for the following years as per the provisions of the above-mentioned Article.

Consequently, the Court, in light of the explanations provided above, emphasizing that granting the interim measure until 30 November 2023 is without prejudice in any way to the admissibility and/or merits of the Referral, assesses that the Applicants’ request for an interim measure against the effects of Article 5 of the contested Law should be granted because it serves the opportunity to “prevent irreparable harm or damages” and it is therefore in the “public interest”.

Note:

This press release was prepared by the Secretariat of the Court solely for informational purposes.  The full text of the decision will be submitted to the parties involved in the case, it will be published on the Court’s website and in the Official Gazette, once the relevant procedures established in the Law on the Constitutional Court and the Rules of Procedure have been completed. The summary published through this Notification may be subject to linguistic and technical corrections in the final draft of the decision. To receive notifications of decisions from the Constitutional Court, please register on the Court’s website: https://gjk-ks.org