29/01/18

Strengthening of municipal autonomy by the Constitutional Court

The Constitutional Court has been seized of the preliminary question as to whether Article 8, paragraph (3) of the Act of 30 June 1976 on the creation of an Employment Fund, which establishes an additional contribution taking away a substantial part of the municipalities’ revenue from commercial tax without specifying the determination of this contribution, is consistent with Article 107, paragraph (1) of the Constitution.

On 8 December 2017, the Court held that the article in question is contrary to the principle of municipal autonomy as enshrined in the constitutional text, to the extent that the Constitution requires, for an additional contribution from a communal tax, that the established mechanism is determinable from the text of the law on the basis of sufficiently precise conditions and modalities fixed in the law.

It should also be noted that the judges analysed Article 107 (1) of the Constitution in the light of the European Charter of Local Self-Government. So, for the first time in its history, the Court has interpreted a constitutional norm while taking into account a text of international law, which underlines that the Constitution is not an isolated text, but a legal instrument that is part of the machinery of the rules applicable in Luxembourg.

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