CASE OF HÄKKÄ v. FINLAND
No violation of Article 4 of Protocol No. 7 - Right not to be tried or punished twice-{general} (Article 4 of Protocol No. 7 - Conviction;Criminal offence)
George Nicolaou;Ineta Ziemele;Krzysztof Wojtyczek;Nona Tsotsoria;Päivi Hirvelä;Zdravka Kalaydjieva
5. The applicant was born in 1952 and lives in Helsinki. 6. The tax inspector conducted a tax inspection in three different companies in 2006 and 2007. 7. On 26 March 2007, concerning the first company, the tax authorities considered that the applicant had received, in 2004, 175,433.07 euros (EUR) and in 2005, EUR 10,351.79 as disguised dividends. They imposed on the applicant an additional tax and tax surcharges (veronkorotus, skatteförhöjning), amounting to EUR 8,100 in respect of the tax year 2004 and to EUR 510 in respect of the tax year 2005. 8. On 2 May 2007 the tax authorities found in respect of the second company that the applicant had received in 2004 EUR 78,690 as disguised dividends and imposed EUR 3,900 as tax surcharges. Moreover, the applicant had received in 2005 EUR 86,936 as disguised dividends and EUR 4,300 were imposed as tax surcharges. 9. On 11 November 2007 the tax authorities considered that the applicant had received, in respect of the third company, EUR 227,994 as disguised dividends in 2005 for which a tax surcharge of EUR 11,000 was made. 10. The applicant apparently did not seek rectification of any of these decisions. Nor were there any appeal proceedings pending. The time-limits for seeking rectification and lodging an appeal ran until 31 December 2010 and 31 December 2011 respectively. 11. On 3 April 2008 the public prosecutor brought charges against the applicant on, inter alia, four counts of aggravated tax fraud (törkeä veropetos, grovt skattebedrägeri) and one count of tax fraud (veropetos, skattebedrägeri) concerning the tax years 2004 and 2005. According to the last count, the applicant was accused of aggravated tax fraud as he had under-declared his income. The undeclared income amounted to EUR 240,953 for the tax year 2004 and EUR 318,676 for the tax year 2005. Consequently, the tax imposed in 2004 had been EUR 108,851 too low and in 2005 EUR 117,036 too low. The tax imposed on the applicant had thus been in total EUR 225,887 too low. 12. On 27 June 2008 the Helsinki District Court (käräjäoikeus, tingsrätten) convicted the applicant as charged and imposed a prison sentence of 2 years and 7 months. He was ordered to pay the taxation authority EUR 225,887 plus interest in respect of the last count. 13. By letter dated 18 August 2008 the applicant appealed to the Appeal Court (hovioikeus, hovrätten), requesting that the charges be dismissed or at least, as far as aggravated tax fraud was concerned, that he be convicted of tax fraud. He also requested that the sentence be mitigated. 14. On 12 February 2010 the Helsinki Appeal Court upheld the District Court judgment. 15. By letter dated 8 April 2010 the applicant appealed to the Supreme Court (korkein oikeus, högsta domstolen) requesting, inter alia, that as concerned the last count of aggravated tax fraud, the charges be dismissed without examining the merits and that the compensation for damages be rejected. He claimed that in this respect the ne bis in idem principle had been violated as tax surcharges had already been imposed for the same acts. That count concerned at the earliest the tax year 2004, in respect of which the time-limit for an appeal in the taxation proceedings was still running until 30 December 2010, meaning that those proceedings had not yet been finalised. An effective use of the ne bis in idem principle would require a lis pendens effect preventing the pressing of charges if an administrative tax surcharge matter was still pending. Otherwise two separate sets of proceedings concerning the same facts could be pending. Moreover, applicants would be treated unequally if the possibility of pressing charges depended on the finality of the taxation proceedings. 16. On 23 April 2010 the applicant was granted leave to appeal as far as the last count was concerned. 17. On 29 June 2010 the Supreme Court upheld the Appeal Court judgment. It found, after a detailed analysis of Article 4 of Protocol No. 7 to the Convention and the Court’s case-law, that it was clear since the Jussila judgment that the imposition of a tax surcharge rendered the case criminal and that the ne bis in idem principle applied to such a case even though, under the domestic law, it fell within the domain of administrative law. Both the taxation and the criminal proceedings concerned the same facts, namely the failure to declare the same income. For the ne bis in idem principle it was relevant whether the proceedings had become final. The principle did not prohibit a situation in which two sets of proceedings concerning the same matter were pending at the same time. There was thus no lis pendens effect attached to this principle. Even if this lack of lis pendens effect was problematic in the sense that it might result in unequal treatment of applicants due to the fact that the point of time when taxation decisions became final varied, its acceptance might create even more profound problems. As the taxation decisions in the present case concerned the tax years 2004 and 2005, the time-limits for seeking rectification ran until 31 December 2010 and 31 December 2011 respectively. The charges had been pressed on 3 April 2008. The taxation proceedings had thus not become final before the criminal proceedings started. Therefore, there were no impediments to examining the charge concerning aggravated tax fraud. This judgment became a published leading case KKO:2010:46.