Communicated on 20 December 2013
FOURTH SECTION
Application no. 53753/12
Timo Veikko KIIVERI
against Finland
lodged on 22 August 2012
STATEMENT OF FACTS
The applicant, Mr Timo Veikko Kiiveri, is a Finnish national who was born in 1960 and lives in Tampere. He is represented before the Court by Mr Jaakko Tuutti, a lawyer practising in Tampere.
A. The circumstances of the case
The facts of the case, as submitted by the applicant, may be summarised as follows.
Taxation proceedings
The applicant owns 90% of the shares in a limited liability company which was active in the construction and decoration business. The applicant is the CEO and the director of the board of the company.
In 2005 the tax authorities carried out a tax inspection of the company and concluded that it had failed to declare and pay a considerable amount of tax and that it had, inter alia, paid salaries off the books and undertaken other fraudulent activity.
On 8 September 2008 the tax authorities imposed additional income tax and also tax surcharges (veronkorotus, skatteförhöjning) both on the company and on the applicant for the tax years 2002, 2003, 2005 and 2006. The applicant apparently did not appeal against those decisions and the bailiff seized the imposed sums from the applicant. The period set for appeal in tax matters is five years counted from the beginning of the calendar year following the year when the initial taxation decision was taken. Therefore the taxation concerning the tax years 2002, 2003 and 2005 became final on 31 December 2008, 2009, and 2011 respectively. The period for appeal for the tax year 2006 lapsed on 31 December 2012.
Criminal proceedings
In June 2007 the police started a criminal investigation into the applicant’s activities. On 6 March 2009 the prosecutor brought charges against the applicant for aggravated accounting offence (törkeä kirjanpitorikos, grovt bokföringsbrott) and aggravated tax fraud (törkeä veropetos, grovt skattebedrägeri) on two counts. The first count concerned the tax years from 2000 to 2006 and the applicant’s activities as CEO and director of the board of the company. The applicant was accused of aggravated tax fraud as he had deducted fabricated receipts, failed to declare the company’s real income, paid salaries off the books and, consequently, the tax imposed on the company had been too low. The second count concerned the tax years from 2001 to 2007. The applicant was accused of aggravated tax fraud as he had failed to declare his own income and, consequently, the 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.
On 9 September 2009 the District Court of Tampere (käräjäoikeus, tingsrätten) convicted the applicant of two counts of aggravated tax fraud concerning the periods from 2000 to 2006 and 2001 to 2007 and one accounting offence which included the whole period from 2000 to 2007. He was sentenced to 3 years’ imprisonment and ordered to pay the tax authorities 685,080.66 euros plus interest as compensation. It was noted that the sums already seized from the applicant in the administrative proceedings could be deducted from the compensation. In addition, he was banned from undertaking business activities for six years.
By letter dated 9 October 2009 the applicant appealed to the Court of Appeal of Turku (hovioikeus, hovrätten), requesting that the District Court’s judgment be quashed and the charges dismissed. He relied also on the principle of ne bis in idem and the Court’s case-law in that respect.
On 15 September 2010 the Court of Appeal, after having held an oral hearing, upheld the judgment for the most part, but considered in part that the accounting offence was aggravated and ordered the applicant to pay 20,000 euros more compensation to the State. The court considered that as long as the time-limit for appeal had not lapsed with regard to the tax years 2003, 2005 and 2006 at the moment of bringing the charges against the applicant in 2009, there was no issue of ne bis in idem. Furthermore it considered that, as regards the tax year 2002, the time-limit for appeal had lapsed on 31 December 2008 and thus the taxation had become final before the charges were brought against the applicant. However, as there still existed another kind of tax appeal which the applicant could have used, the Court of Appeal finally considered that the ne bis in idem principle did not prevent the examination of the charges against the applicant also concerning the tax year 2002.
By letter dated 12 October 2010 the applicant appealed to the Supreme Court (korkein oikeus, högsta domstolen), reiterating the grounds of appeal already presented before the Court of Appeal. He also requested an interim order staying the execution of the lower judgment.
On 27 February 2012 the Supreme Court quashed the part of the criminal conviction that concerned the tax year 2002, as it considered that the fact that the tax surcharges imposed on the applicant had become final in 2008, before the charges had been brought against the applicant in March 2009, prevented the examination of the matter. Otherwise the lower court’s judgment was upheld. The court considered that as long as the time-limit for appeal had not lapsed with regard to the other tax years at the moment when the charges were brought against the applicant, there was no issue of ne bis in idem. As part of the applicant’s conviction was quashed, his sentence was accordingly also lowered to 2 years and 10 months’ imprisonment. On 21 August 2012 the applicant lodged an extraordinary appeal with the Supreme Court requesting the reopening of the case based on incorrect application of the law and the prohibition on self-incrimination.
There is no information about the outcome of that appeal.
B. Relevant domestic law and practice
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 submit 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.
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.
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).
COMPLAINT
The applicant complains under Article 4 of Protocol No. 7 to the Convention that he was tried and punished twice as he was first ordered to pay tax surcharges and subsequently convicted in criminal proceedings and sentenced to imprisonment on the basis of the same facts.
QUESTION TO THE PARTIES
Has the applicant been tried or punished twice for the same offence in the territory of the respondent State, as prohibited by Article 4 § 1 of Protocol No. 7? In particular, has this been the case in respect of tax years 2003, 2005 and 2006? If so, did the proceedings fall within the exceptions envisaged by Article 4 § 2 of Protocol No. 7?
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