ALASIPPOLA v. FINLAND
Inadmissible
Guido Raimondi;Ledi Bianku;Nona Tsotsoria;Päivi Hirvelä;Paul Mahoney;Zdravka Kalaydjieva
1. The applicant, Mr Robert Alasippola, is a Finnish national, who was born in 1966 and lives in Leppävesi. He was represented before the Court by Mr Markku Fredman, a lawyer practising in Helsinki. 2. The Finnish Government (“the Government”) were represented by their Agent, Mr Arto Kosonen of the Ministry for Foreign Affairs. 3. The facts of the case, as submitted by the parties, may be summarised as follows. 4. The applicant’s business was declared bankrupt in 2003 and he was subject to a tax inspection for the years 2003 and 2004. The tax inspection report was completed on 4 June 2004. At the same time, the applicant’s wife was also subject to a tax inspection. She has lodged a separate application with the Court (no. 39771/12 Hanna Riikka Alasippola v. Finland). 5. On 3 September 2004 the tax authorities imposed additional valueadded tax on the applicant as well as tax surcharges (veronkorotus, skatteförhöjning) for the tax years 2001, 2002 and 2003. 6. On 9 September 2004 the tax authorities imposed additional income tax and tax surcharges on the applicant for the tax years 2000, 2001, 2002 and 2003. The amount of tax surcharges varied between 800 and 900 euros. 7. By letters dated 20 October 2004 and 1 February 2005 the applicant sought rectification from the local Tax Rectification Committee (verotuksen oikaisulautakunta, prövningsnämnden i beskattningsärenden), requesting it to quash the decisions of 9 September 2004. 8. On 21 February 2005 the Tax Rectification Committee rejected the applicant’s applications concerning the income tax imposed for the tax years 2000, 2001, 2002 and 2003. 9. The applicant appealed against both the decisions of 3 September 2004 and the rectification decisions of 21 February 2005 to the Hämeenlinna Administrative Court (hallinto-oikeus, förvaltnings-domstolen). 10. On 26 June 2006 the Hämeenlinna Administrative Court rejected the applicant’s appeals concerning the income tax imposed for the tax years 2000, 2001, 2002 and 2003. 11. The applicant appealed against the decision of 26 June 2006 by the Hämeenlinna Administrative Court to the Supreme Administrative Court (korkein hallinto-oikeus, högsta förvaltningsdomstolen) but later withdrew his application. On 15 March 2007 the case was considered by the Supreme Administrative Court as lapsed. 12. On 4 October 2006 the Hämeenlinna Administrative Court rejected the applicant’s appeals concerning the value-added tax imposed in respect of the tax years 2001, 2002 and 2003. It appears that no appeal was made against this decision. 13. On 27 March 2009 the public prosecutor brought charges against the applicant, inter alia, for aggravated dishonesty by a debtor (törkeä velallisen epärehellisyys, grovt oredlighet som gäldenär), false accounting (kirjanpitorikos, bokföringsbrott) and aggravated tax fraud (törkeä veropetos, grovt skattebedrägeri) concerning the tax years 1999 to 2003. According to the charges, the applicant was accused of aggravated dishonesty by a debtor as, between 1999 and 2002, he had transferred income to his wife to the detriment of his creditors. He was accused of false accounting between 1999 and 2003 as he had failed to make entries into the accounts. He was accused of aggravated tax fraud between 1999 and 2003 as he had failed to declare income and consequently, inter alia, the income tax and value-added tax imposed on him had been too low. The tax authorities joined the charges and presented a compensation claim totalling approximately the amount of avoided taxes. 14. On 26 February 2010 the Keski-Suomi District Court (käräjäoikeus, tingsrätten) convicted the applicant of aggravated dishonesty by a debtor, false accounting and of aggravated tax fraud, and imposed a prison sentence of 1 year and 10 months. He was ordered to pay the tax authorities 135,417 euros (EUR) plus interest in compensation. 15. By letter dated 6 April 2010 the applicant appealed to the Vaasa Appeal Court (hovioikeus, hovrätten), requesting that the District Court judgment be quashed and the charges dismissed. He referred to the ne bis in idem principle and to the Court’s case-law in that respect. 16. On 31 October 2011 the Vaasa Appeal Court, after having held an oral hearing, upheld the District Court judgment. The court found that the mere fact that the same issues had been assessed in the administrative proceedings did not necessarily prevent the examination of the charges pressed. After having compared the charges of aggravated tax fraud to the facts on the basis of which the tax surcharges had been imposed, by the type of tax imposed and the tax year concerned, the court found that the facts on which these charges were based were substantially different from those on which the tax surcharges had been based. There was thus no impediment to examining the charges against the applicant. 17. By letter dated 29 December 2011 the applicant appealed to the Supreme Court (korkein oikeus, högsta domstolen), reiterating the grounds of appeal already presented before the Appeal Court. He emphasised that matters which had already been examined by the tax authorities could not be examined again in criminal proceedings. 18. On 31 January 2012 the Supreme Court refused the applicant leave to appeal except in respect of the charges concerning aggravated tax fraud. 19. On 19 December 2012 the Supreme Court dismissed the charge of aggravated tax fraud without examining the merits as far as the charge concerned income tax from the tax years 2000 to 2003 and value-added tax from the tax years 2001 to 2003, and withheld the relevant taxes. The applicant was convicted for the remaining part of the charge of aggravated tax fraud and sentenced, together with the earlier convictions, to imprisonment for 1 year and 4 months. The court found that, when considering the ne bis in idem prohibition, the similarity of the facts should be examined by the type of tax imposed and separately for each tax year. As concerned the tax year 1999, there was no impediment to examining the charge as the tax inspection did not concern the tax year 1999. However, concerning the tax year 2000, the charge could not be examined, except in respect of value-added tax, as the same matter had already been subject to an assessment by the tax authorities. In respect of the tax year 2001 the charge could not be examined at all. The same applied for the tax years 2002 and 2003. The taxation decisions had all become final before the charge of aggravated tax fraud, which concerned the same matter, was pressed. Therefore, the charge could only be examined in respect of the tax year 1999 and in respect of the valueadded tax imposed during the tax year 2000. This judgment has been published under number KKO 2012:106. 20. Section 57, subsection 1, of the Tax Assessment Procedure Act (laki verotusmenettelystä, lagen om beskattningsförfarande, Act no. 1558/1995, as amended by Act no. 1079/2005) provides that if a person has failed to make the required tax returns or has given incomplete, misleading or false information to the tax authorities and tax has therefore been incompletely or partially levied, the taxpayer shall be ordered to pay unpaid taxes together with additional tax and a tax surcharge. 21. According to Chapter 29, sections 1 and 2, of the Penal Code (rikoslaki, strafflagen, as amended by Acts no. 1228/1997 and no. 769/1990), a person who (1) gives a tax authority false information on a fact that influences the assessment of tax, (2) files a tax return concealing a fact that influences the assessment of tax, (3) for the purpose of avoiding tax, fails to observe a duty pertaining to taxation, influencing the assessment of tax, or (4) acts otherwise fraudulently and thereby causes or attempts to cause a tax not to be assessed, or too low a tax to be assessed or a tax to be unduly refunded, shall be sentenced for tax fraud to a fine or to imprisonment for a period of up to two years. If by the tax fraud (1) considerable financial benefit is sought or (2) the offence is committed in a particularly methodical manner and the tax fraud is aggravated when assessed as a whole, the offender shall be sentenced for aggravated tax fraud to imprisonment for a period between four months and four years. 22. According to Chapter 39, sections 1 and 1a, of the Penal Code (as amended by Acts no. 61/2003 and no. 317/1994), a debtor who (1) destroys his or her property, (2) gives away or otherwise surrenders his or her property without acceptable reason, (3) transfers his or her property abroad in order to place it beyond the reach of his or her creditors or (4) increases his or her liabilities without basis and thus causes his or her insolvency or essentially worsens his or her state of insolvency, shall be sentenced for dishonesty by a debtor to a fine or to imprisonment for at most two years. If by the dishonesty by a debtor (1) considerable benefit is sought, (2) considerable or particularly substantial damage is caused to the creditors, or (3) the offence is committed in a particularly methodical manner and the dishonesty by a debtor is aggravated also when assessed as a whole, the offender shall be sentenced for aggravated dishonesty by a debtor to imprisonment for at least four months and at most four years. 23. The Supreme Court has taken a stand on the ne bis in idem principle in its precedent case KKO 2010:46 which concerned tax surcharges and aggravated tax fraud. In that case it found, inter alia, that even though a final judgment in a taxation case, in which tax surcharges had been imposed, prevented criminal charges being brought about the same matter, such preventive effect could not be applied to pending cases (lis pendens) crossing from administrative proceedings to criminal proceedings or vice versa. However, in July 2013 the Supreme Court reversed its line of interpretation, finding that charges for tax fraud could no longer be brought if there was already a decision to order or not to order tax surcharges in the same matter (KKO 2013:59). 24. The Act on Tax Surcharges and Customs Duty Surcharges Imposed by a Separate Decision (laki erillisellä päätöksellä määrättävästä veron- tai tullinkorotuksesta, lagen om skatteförhöjning och tullhöjning som påförs genom ett särskilt beslut, Act no. 781/2013) entered into force on 1 December 2013. According to the Act, the tax authorities can, when making a tax decision, assess whether to impose a tax surcharge or to report the matter to the police. The tax authorities can decide not to impose a tax surcharge. If they have not reported the matter to the police, a tax surcharge can be imposed by a separate decision by the end of the calendar year following the actual tax decision. If the tax authorities have imposed tax surcharges, they can no longer report the same matter to the police unless, after imposing the tax surcharges, they have received evidence of new or recently revealed facts. If the tax authorities have reported the matter to the police tax surcharges can, as a rule, no longer be imposed. The purpose of the Act is thus to ensure that a tax or a customs duty matter is processed and possibly punished in only one set of proceedings. The Act does not, however, contain any transitional provisions extending its scope retroactively.