M.S.S. v. FINLAND
Inadmissible
Georg Ress
The applicant is a Finnish national, born in 1947 and living in Malaga, Spain. The facts of the case, as submitted by the applicant, may be summarised as follows. On 21 December 1993 the Helsinki Tax Office made a decision that the applicant was due to pay residual taxes since he had not announced certain income in the amount of FIM 100,000 in his tax returns. The applicant was also obliged to pay a 20% tax increase on the amount. The decision was based on a tax audit in a company called AT. This company had paid FIM 100,000 to the limited company F, which was owned by the limited partnership company SR. The applicant was the only active partner of SR, which owned 100% of the shares of F. On 20 February 1994 the applicant appealed to the County Administrative Court (lääninoikeus, länsrätten) of Uusimaa, complaining that the decision was wrong and that he had not been informed of the legal provisions on which the decision was based. The appeal was referred to the local tax rectification board (verotuksen oikaisulautakunta, prövningsnämnden i beskattningsärenden) which, on 9 May 1994, rejected the appeal. On 1 August 1994 the applicant again appealed to the County Administrative Court. On 19 January 1996 the court lowered the tax increase from 20% to 10% and upheld the remainder of the decision. The court stated that the payment of the amount of FIM 100,000 was considered to be the applicant’s personal income since he had received payment for his actions related to a sales contract concerning an airplane. The payment was considered to be the applicant’s personal income, even though he had waived his right to the amount in favour of company F. Further the court noted that, as the applicant had not announced that amount in his tax returns, the tax office had a right to order the payment of a residual tax and impose a tax increase. Finally, the court rejected, for lack of a legal basis, the applicant’s request that the taxes already paid by companies AT and F on the same ground be counted for his benefit. On 31 December 1996 the Supreme Administrative Court (korkein hallinto-oikeus, högsta förvaltningsdomstolen) refused the applicant’s request for leave to appeal. On 29 September 1994 the Execution Office collected from the applicant FIM 62,116 as residual taxes, FIM 1,863 as a payment of back taxes, additional taxes amounting to FIM 32,178, default interest of FIM 4,347 and FIM 400 as execution fee, altogether FIM 100,904 (€ 16,970). After the decision of the County Administrative Court the applicant was refunded FIM 5,093.