HENRIKSSON v. SWEDEN
Inadmissible
Aleš Pejchal;Angelika Nußberger;Ganna Yudkivska;Helena Jäderblom;Mark Villiger;Vincent A. De Gaetano
1. The applicant, Mr Björn Henriksson, is a Swedish national, who was born in 1940 and lives in Söderhamn. He was represented before the Court by Mr B. Leidhammar and Mr C. Crafoord, lawyers practising in Stockholm. 2. The Swedish Government (“the Government”) were represented by their Agents, Ms I. Kalmerborn, Ms H. Kristiansson and Mr. A. Rönquist, Ministry for Foreign Affairs. 3. By a judgment of 18 May 2006 the Handen District Court (tingsrätt) convicted the applicant of a tax offence (skattebrott). He was given a suspended sentence and ordered to perform 50 hours of community service. The District Court found that he had had temporary employment with a company in 2003 and had failed to declare in his tax return the value of various goods that he had received as remuneration. The applicant did not dispute this, but claimed that he had not understood that the remuneration was liable to tax and that, thus, he had had no intention of evading taxes. He maintained that his conduct, in any event, could only be regarded as a tax misdemeanour (skatteförseelse). The court considered, however, that the investigation clearly showed that he had been aware of his tax liability and that his conduct was to be designated as a tax offence. While the court was unable to exactly determine the applicant’s undeclared income, it considered the material in the case to sufficiently support the prosecutor’s claim that taxes could be charged in the amount of at least 40,000 Swedish kronor (SEK; approximately 4,300 euros (EUR). 4. On 16 November 2006 the Svea Court of Appeal (Svea hovrätt) reclassified the offence as a tax misdemeanour and sentenced the applicant to 75 day fines (dagsböter) of SEK 1,000 (approximately EUR 110) each. The appellate court found that, in distinguishing between a tax offence and a tax misdemeanour, all objective facts were to be considered, although the amount in question was of particular importance. According to domestic case-law, the line had been drawn at about SEK 30,000, and the court could not find beyond reasonable doubt that the total remuneration received by the applicant had exceeded that amount. Nor were there other circumstances that justified the classification of the offence as a tax offence. 5. The applicant did not appeal against the Court of Appeal’s judgment, which consequently acquired legal force on 15 December 2006. 6. On 28 August 2006 the Tax Agency (Skatteverket) made an enquiry to the applicant, indicating that it was considering a supplementary tax assessment involving tax surcharges. The applicant replied to this enquiry on 5 September 2006. 7. By a decision of 22 March 2007 the Tax Agency reviewed the applicant’s taxation for income received in 2003 (i.e. the taxation year 2004) and found that he had failed to account for income received from the company mentioned above. Having regard to the documentation in the case, including the judgments in the criminal case, the Agency found it reasonable to assume that the applicant had received a monthly income of SEK 25,000 during the period of April to November 2003, or in total SEK 200,000. After deductions for estimated costs for travels to and from work and increased living expenses of SEK 24,000, the Agency revised upwards his income by SEK 176,000. Furthermore, as the information supplied by the applicant in his tax return was found to be incorrect and the revision had had to be made under a discretionary assessment procedure, he was ordered to pay tax surcharges (skattetillägg), amounting to 40% of the increased tax liability. 8. Following the applicant’s appeal, the Tax Agency, on 21 June 2007, made an obligatory review of its decision and lowered the revised income. Instead of SEK 176,000, the applicant’s income was raised by SEK 83,000. The tax surcharges were lowered correspondingly and thereafter amounted to SEK 13,498 (approximately EUR 1,500). 9. By a judgment of 5 May 2008 the County Administrative Court (länsrätten) in the County of Gävleborg agreed with the Tax Agency’s decision of 21 June 2007. However, the court had regard to the preparatory works (prop. 2002/03:106, p. 244) to the provisions on exemption of tax surcharges (in particular, Chapter 5, section 14 of the Tax Assessment Act; Taxeringslagen, 1990:324), according to which, in determining the surcharges, it could be taken into account that the same reproachable act or omission had also led to the individual’s conviction for a crime under the Tax Offences Act (Skattebrottslagen, 1971:69), the reason being that the total penalty should not be unreasonably heavy. In view of the applicant’s conviction and sentence, the court found reason to halve the tax surcharges in question. 10. On 6 October 2008 the Administrative Court of Appeal (kammarrätten) in Sundsvall upheld the County Administrative Court’s judgment. 11. The Tax Agency appealed to the Supreme Administrative Court (Regeringsrätten) which, on 10 March 2009, granted leave to appeal. 12. On 17 September 2009 the Supreme Administrative Court quashed the lower courts’ judgments and upheld the Tax Agency’s review decision of 21 June 2007 (judgment published in Regeringsrättens årsbok (RÅ) 2009, ref. 94). In assessing whether there was a violation of the prohibition on double punishment under Article 4 of Protocol No. 7 to the Convention, the court referred to the fact that the relevant Swedish provisions aimed at ensuring that the combined sanctions – criminal conviction and imposition of tax surcharges – were in reasonable proportion to the conduct for which the individual had been found liable. It further noted that the Swedish legal system contained the special feature of separate general courts and administrative courts. In the court’s opinion, Article 4 of Protocol No. 7 had to be interpreted in the light of such special features in the national legal systems. While acknowledging that the European Court’s recent judgments in Sergey Zolotukhin v. Russia ([GC], no. 14939/03, judgment of 10 February 2009, ECHR 2009) and Ruotsalainen v. Finland (no. 13079/03, judgment of 16 June 2009) suggested a change in the Strasbourg case-law, the Supreme Administrative Court noted that they did not relate to the Swedish legal system and concluded that this system, allowing for both a conviction for a tax offence and an imposition of tax surcharges, was in conformity with the Convention. The court further found that an exemption from surcharges under Chapter 5, section 14 of the Tax Assessment Act could only be granted if the individual had received a severe fine or prison sentence. As that was not considered to be the case with regard to the applicant and, thus, his total penalty was not unreasonable, there was no ground on which to reduce the surcharges fixed by the Tax Agency. 13. The rules on taxes and tax surcharges relevant to the present case were primarily laid down in, as far as income tax was concerned, the Tax Assessment Act (Taxeringslagen, 1990:324) and, with respect to VAT, the Tax Payment Act (Skattebetalningslagen, 1997:483). Both laws have since been replaced by the Tax Procedure Act (Skatteförfarandelagen; 2011:1244). 14. A tax surcharge could – and still can – be imposed on a taxpayer in two situations: if he or she, in a tax return or in any other written statement, has submitted information of relevance to the tax assessment which is found to be incorrect (Chapter 5, section 1 of the Tax Assessment Act, and Chapter 15, section 1 of the Tax Payment Act) or if, following a discretionary assessment, the Tax Agency decides not to rely on the tax return (Chapter 5, section 2, and Chapter 15, section 2, respectively). It is not only express statements that may lead to the imposition of a surcharge; concealment, in whole or in part, of relevant facts may also be regarded as incorrect information. A discretionary tax assessment is made if the taxpayer has submitted information which is so inadequate that the Tax Agency cannot base its tax assessment on it or if he or she has not filed a tax return despite the obligation to do so. In certain circumstances, the tax surcharges may be exempted. 15. A person who intentionally furnishes incorrect information to an authority or fails to file a tax return or other required information, thereby causing a risk that taxes will be withheld from the public treasury or wrongly credited or repaid to him or her, is criminally liable under sections 2-4 of the Tax Offences Act (Skattebrottslagen, 1971:69). The possible sentence ranges from a fine for a tax misdemeanour (skatteförseelse) to imprisonment for a maximum of six years for an aggravated tax offence. Section 5 provides that a person who is not considered to have furnished incorrect information with intent but to have been grossly negligent in doing so (vårdslös skatteuppgift) may be sentenced to a fine or a maximum of one year in prison. The term “incorrect information” in the Tax Offences Act is considered to have the same meaning as in the above provisions on tax surcharges (Government Bill 2010/11:165, p. 1110). 16. In a judgment of 29 November 2000 the Supreme Court considered whether a person could be convicted of a tax offence in criminal proceedings following the imposition of a tax surcharge in tax proceedings (published in Nytt juridiskt arkiv (NJA) 2000, p. 622). Having noted that, under internal Swedish law, a surcharge is not considered a criminal penalty and does not prevent trial and conviction for a tax offence relating to the same act, the Supreme Court went on to examine the matter under the Convention. It first considered, in the light of the Court’s case-law, that there were weighty arguments for regarding Article 6 as being applicable under its criminal head to proceedings involving a tax surcharge. Even assuming this to be the case, it held, however, that the principle of ne bis in idem, as set forth in Article 4 of Protocol No. 7 to the Convention presupposed that the initial conviction or acquittal had been delivered in accordance with the penal procedure of the State. Therefore the principle did not prevent criminal proceedings from being brought against someone for an act in respect of which a surcharge had already been levied. This view was confirmed in later judgments delivered by the Supreme Court. 17. On 17 September 2009, in its judgment concerning the present case, the Supreme Administrative Court examined the reverse situation, that is, where the question of imposition of tax surcharges arose after a criminal conviction for a tax offence. It concluded that the Swedish legal system was in conformity with the Convention (see further paragraph 12 above). 18. By a decision of 31 March 2010 the Supreme Court examined the issue anew (NJA 2010, p. 168). It found again, by a majority of 3 votes to 2, that there was no reason generally to invalidate the Swedish system with double proceedings by virtue of Article 4 of Protocol No. 7. The court considered that, following Sergey Zolotukhin v. Russia If the later proceedings concerned identical or essentially the same facts as the earlier proceedings, it was a matter of proceedings concerning the same offence. However, the Supreme Court noted that the Strasbourg case-law left some room for several punishments for the same offence that could be decided by separate organs at different times and mentioned by way of example, inter alia, the conviction for a traffic offence and the resultant withdrawal of the offender’s driving licence. The Supreme Court further found that the invalidation of a Swedish system regulated by domestic law with reference to the Convention required that either the Convention itself or the European Court’s jurisprudence provided clear support for that conclusion and considered that neither Article 4 of Protocol No. 7 nor the jurisprudence provided such support in the matter at hand. 19. By a plenary decision of 11 June 2013 (NJA 2013, p. 502) the Supreme Court overturned its previous conclusions. In line with its 2010 decision, the court held that the imposition of tax surcharges and the conviction for a tax offence based on the same information supplied in a tax return are founded on identical factual circumstances and the relevant proceedings thus concern the same offence within the meaning of Article 4 of Protocol No. 7. However, where the court in 2010 had found that the invalidation of the Swedish system required clear support in the Convention itself or in Strasbourg case-law, the court now noted that the judgment of the European Court of Justice in the case of Åkerberg Fransson (26 February 2013, case no. C-617/10) already prohibited double proceedings and punishments with respect to VAT. As the Swedish system had thereby been partially invalidated, the legal and practical consequences of further changes were not so radical as to require the intervention of the legislature. The court also took into account that no legislative amendments had been made despite the developments in Strasbourg case-law since 2009 and that it would be inexpedient and difficult to apply different rules on similar contraventions within a system meant to be coherent. Consequently, the court held that there was sufficient support for concluding that the Swedish system of tax surcharges and tax offences was incompatible with Article 4 of Protocol No. 7. This conclusion applied not only to VAT, but also to income tax, employer’s contributions and similar payments. The Supreme Court further found that the protection under Swedish law against double proceedings and punishments was valid also in cases where the state exacted personal liability on an individual for tax surcharges imposed on a legal person. Having regard to the strong and systematic connection in Swedish law between the principles of res judicata and lis pendens, the court also held, although the Court’s jurisprudence was unclear on this point, that ongoing, not finalised proceedings on tax surcharges precluded a criminal indictment concerning the same factual circumstances. The procedural hindrance against an indictment materialised when the Tax Agency took its decision to impose surcharges. However, whereas the imposition of tax surcharges and the conviction for a tax offence based on the same factual circumstances concerned the same offence and were thus prohibited, the situation was different when the criminal conviction concerned a bookkeeping offence. According to the Supreme Court, which had regard to the case-law of the Court, the concrete factual circumstances forming the basis of a bookkeeping offence could normally not be considered inextricably linked to the factual circumstances leading to the imposition of tax surcharges. In addition to the breach of bookkeeping obligations under the Accountancy Act, the imposition of a tax surcharge involved a further factual element, namely the submission of incorrect information in a tax return. In the case at hand, which involved the imposition of tax surcharges against an individual in November 2009 and the criminal indictment of him in June 2010 for, inter alia, aggravated tax offences and an aggravated bookkeeping offence, the Supreme Court quashed the appealed judgment of the Court of Appeal in so far as it concerned the tax offence relating to his personal income tax and dismissed the indictment in that respect. However, nothing prevented the examination of the bookkeeping offence or the tax offences concerning VAT and employer’s contributions. In the latter respect, the conclusion was due to the tax surcharges relating to VAT and employer’s contributions having been imposed on the appellant’s limited liability company and not on him personally. 20. In a further decision, taken on 16 July 2013 (NJA 2013, p. 746), the Supreme Court examined the question whether a former defendant could be granted a re-opening of criminal proceedings (resning) under Chapter 58, section 2 of the Code of Judicial Procedure (Rättegångsbalken) if he or she had been convicted of an offence under the Tax Offences Act in a manner incompatible with Article 4 of Protocol No. 7, as interpreted by the decision of 11 June 2013. The court concluded that, on the basis of the Convention, in particular Article 13, a Swedish court may decide, in certain situations, that a case is to be re-opened notwithstanding the special conditions specified in Chapter 58, section 2. The court also took the position that the incompatibility of Swedish legislation regarding sanctions for tax-related offences with Article 4 of Protocol No. 7 had arisen by virtue of the Sergey Zolotukhin judgment (cited above), thus on 10 February 2009. The Supreme Court’s decision led to criminal proceedings being re-opened in respect of an individual’s conviction for an offence under the Tax Offences Act. As a result, the possibility of being granted a re-opening of criminal proceedings applies retroactively to judgments having been delivered in criminal proceedings as from 10 February 2009. 21. On 25 July 2013 the Supreme Court took another decision of relevance (NJA 2013, p. 780). It stated therein that, if criminal proceedings have commenced before the Tax Agency has decided to impose tax surcharges, the prohibition against ne bis in idem cannot result in a criminal judgment that has become final being re-opened and quashed. Instead, it is the second set of proceedings to be commenced – the tax proceedings involving surcharges – that are contrary to the law. The violation of the right not to be tried or punished twice for the same offence is therefore in this situation a matter for the administrative courts. 22. By a plenary judgment of 29 October 2013 (HFD 2013 ref. 71), the Supreme Administrative Court (now Högsta förvaltningsdomstolen) reversed the position taken in its judgment of 17 September 2009 and confirmed in a judgment of 21 December 2010 (RÅ 2010 ref. 117). Agreeing with the conclusions drawn by the Supreme Court, the Supreme Administrative Court found that the same principles should apply when the order of the tax and criminal proceedings is different, that is, when the tax proceedings are commenced later. Accordingly, a criminal indictment constitutes a procedural hindrance against imposing tax surcharges based on the same submission of incorrect information. In the case at hand, where the individual had been indicted in February 2005 and surcharges had been imposed by the Tax Agency in April 2005, the Supreme Administrative Court concluded that the latter decision violated Article 4 of Protocol No. 7. The appeal made against the appellate court’s judgment on tax surcharges was accordingly granted and the surcharges set aside. 23. The Supreme Administrative Court has since examined several petitions for the re-opening of tax proceedings in which tax surcharges had been imposed. In a decision of 2 December 2013 (cases nos. 5850-13 and 5851-13) it rejected the petition, stating that the earlier criminal proceedings had not led to an indictment of the individual but to a decision by the prosecutor to discontinue the preliminary investigation and that, accordingly, no violation of the prohibition against double proceedings had occurred. In a judgment of 5 June 2014 (cases nos. 1112-14 and 1113-14) it granted a re-opening, noting that, pursuant to the Supreme Court’s decision of 16 July 2013, the applicant would have had a right of re-opening of the criminal proceedings if the tax surcharge decision had preceded the indictment and finding that the situation at hand, which was the reverse, should not be treated differently. The Supreme Administrative Court accordingly re-opened the tax proceedings and quashed the tax surcharges in question. The latter case had already been examined by the Supreme Administrative Court as part of the original tax proceedings in December 2010 – prior to the recent developments in Swedish case-law – and had then been considered not to involve a breach of Article 4 of Protocol No. 7. 24. In a judgment of 19 June 2014 (cases nos. 7110-13 and 7111-13) the Supreme Administrative Court examined a different situation where tax surcharges had been imposed on a person by a decision of the Tax Agency in May 2011, upheld by the County Administrative Court in February 2012. During the subsequent examination before the Administrative Court of Appeal, the person in question was, in separate criminal proceedings, indicted for a tax offence but acquitted thereof by a judgment of the District Court in April 2013 which soon afterwards acquired legal force. As a consequence, the Administrative Court of Appeal, in September 2013, quashed the surcharges that had been imposed. The Supreme Administrative Court agreed with this course of action, noting that the Court had established in several judgments (including Nykänen v. Finland, no. 11828/11, 20 May 2014) that, in the event that one of two concurrent sets of proceedings becomes final, Article 4 of Protocol No. 7 required that the other set of proceedings be discontinued. The Supreme Administrative Court’s judgment was delivered in ordinary proceedings which had not involved any re-opening. Furthermore, all the decisions and judgments in the case were delivered after the Sergey Zolotukhin judgment. 25. Following the above judicial changes, the Prosecutor-General (Riksåklagaren) and the Economic Crime Authority (Ekobrotts-myndigheten) decided to examine all tax cases where there may have been double punishments in accordance with the conclusions by the two supreme courts. Whenever the conditions were met, the prosecutor would file a petition for the criminal proceedings to be re-opened, provided that the individual agreed to this course of action and had not already sought a re-opening him- or herself. The undertaking, expected to be finalised by mid-March 2014, was to cover all cases ending with a judgment, an order of summary punishment (strafföreläggande) or a decision not to prosecute (åtalsunderlåtelse) since 10 February 2009. On 25 April 2014 the Swedish newspaper Dagens Nyheter, basing itself on information provided by the Economic Crime Authority, reported that close to 3,000 cases concerning tax offences had been examined. Out of more than 110 individuals who were serving prison sentences, 42 had been released. Those who had not been released had been convicted also for other crimes than tax offences. A further number of persons who were about to start serving prison sentences did not have to do so. 800 individuals who had already served their sentences had been asked whether they wished assistance in filing petitions for re-opening of proceedings and, so far, 541 of them had accepted and 128 cases had been re-opened. In some re-opened cases the convictions had been quashed in their entirety; in others, involving several offences, the proceedings had to be repeated. 26. Section 4 of the Act on Compensation for Deprivation of Liberty and Other Coercive Measures (Lagen om ersättning vid frihetsberövande och andra tvångsåtgärder; 1998:714) stipulates that a person who has served a prison sentence is entitled to compensation if, following an appeal or a re-opening of proceedings, he or she is acquitted or given a less severe sentence or the judgment containing the conviction is quashed. Under section 7 of that Act, compensation is awarded for costs, loss of income, interference in business activities and suffering. Normally, in accordance with the practice of the Chancellor of Justice (Justitiekanslern), compensation for suffering is set at a rate of SEK 30,000 (approximately EUR 3,300) for the first month, SEK 20,000 (EUR 2,200) for each additional month up to and including the sixth month and SEK 15,000 (EUR 1,600) per month after that. Certain circumstances can lead to a higher rate of compensation. This is primarily the case if the suspicions have concerned a particularly serious crime or if the matter has attracted extensive media attention. 27. An action for damages can also be based on the Tort Liability Act (Skadeståndslagen, 1972:207). Under Chapter 3, section 2 of that Act, compensation is awarded for damage caused by fault or negligence on the part of a public authority. Requests can be lodged with the Chancellor of Justice. If dissatisfied with the Chancellor’s decision, the individual has the option of bringing an action for damages against the State in the general courts. He or she may also institute such proceedings directly without having made a request to the Chancellor. 28. In addition, the Supreme Court has developed case-law which provides that, in order to provide redress for victims of Convention violations, compensation may be awarded without direct support in Swedish law. Based on this case-law, the Chancellor of Justice has awarded compensation in many cases following requests from individuals. The Court has had regard to this development and has concluded that, following a Supreme Court judgment of 3 December 2009 (NJA 2009 N 70), there is an accessible and effective remedy of general applicability, capable of affording redress in respect of alleged violations of the Convention (see, for example, Eriksson v. Sweden, no. 60437/08, §§ 48-52, 12 April 2012, and Marinkovic v. Sweden (dec.), no. 43570/10, § 43, 10 December 2013, and – in regard to the domestic case-law developments – the latter decision, §§ 21-31).