PIETILÄINEN AND SANOMA MEDIA FINLAND OY v. FINLAND

Published on 30 June 2025

SECOND SECTION

Application no. 9929/24
Tuomo Sakari PIETILÄINEN and SANOMA MEDIA FINLAND OY
against Finland
lodged on 3 April 2024
communicated on 12 June 2025

SUBJECT MATTER OF THE CASE

The application concerns the impact of tax treatment on freedom of expression in a situation where a journalist’s legal expenses accrued in criminal proceedings against him were paid on his behalf by his employer, a media house, and when this payment was considered to be his taxable income.

The first applicant is a journalist who works for the second applicant, one of the largest media houses in Finland which publishes, inter alia, the “Helsingin Sanomat” newspaper.

In 2017, the first applicant wrote, together with another person, an article about a new, upcoming piece of legislation concerning civilian and military intelligence which was to give the Finnish Security and Intelligence Service and the Finnish Defence Forces new powers to gather information by means of network traffic intelligence. On 16 December 2017 the article was published in the Helsingin Sanomat print newspaper and in its online magazine with the following headlines: “The secret unit would be allowed to intercept your e-mails” (“Salainen yksikkö saisi siepata sähköpostejasi”) and “A secret in the depths of the rock – virtually no one knows what the Finnish Intelligence Research Centre does, but now documents obtained by H[elsingin] S[anomat] reveal the mystery" (“Salaisuus kallion uumenissa – juuri kukaan ei tiedä, mitä tekee Puolustusvoimien Viestikoekeskus, mutta nyt HS:n saamat asiakirjat avaavat mysteerin”). The article contained information on the Finnish military intelligence and especially on the Finnish Defence Forces’ Intelligence Research Centre located in Tikkakoski, Jyväskylä.

On 16 December 2017 the Finnish Defence Forces filed a police report regarding the article. The National Bureau of Investigation finished its pre‑trial investigation in December 2020.

On 29 October 2021 the Deputy Prosecutor General decided to bring criminal charges against the first applicant for disclosure of a national secret for drafting and intending to publish subsequent articles containing classified information. The prosecution claimed that the article was partly based on confidential military documents or otherwise contained classified information concerning the military, and that it contained information regarding the missions, functioning, organisation, performance and acquisitions of Finnish military intelligence. The prosecution also requested that the second applicant be ordered to remove the article from the Helsingin Sanomat online publication, and that the applicants be ordered to pay, together with some other people, the State’s legal expenses in the amount of 25 932.50 euros.

On 27 January 2023 the Helsinki District Court convicted the first applicant of disclosure of a national secret and sentenced him to a fine of 4 200 euros. The second applicant was ordered to remove the article from the Helsingin Sanomat online publication. The applicants, together with a third person, were ordered to pay jointly 17 490 euros in order to compensate the Finnish Defence Forces’ legal fees. The first applicant’s legal expenses amounted to 987 896 euros and the second applicant paid them in their entirety.

The prosecution, the Finnish Defence Forces, and the applicants all appealed against the Helsinki District Court’s judgment to the Helsinki Court of Appeal where the appeal is currently pending.

On 13 June 2022 the first applicant filed an application for a preliminary ruling with the Central Tax Board, concerning the tax treatment of the legal expenses paid by his employer, the second applicant.

On 28 October 2022 the Central Tax Board issued its preliminary ruling. It held that the advisory and legal costs paid by the second applicant were not taxable income for the first applicant, regardless of whether he was convicted of the crimes he was charged of, or not. It held that the actions at stake in the criminal proceeding had taken place within the publishing activity which was under the responsibility of Helsingin Sanomat and that neither the second applicant or the editorial staff of Helsingin Sanomat had claimed that the first applicant had acted against their instructions or against his employer’s interests. Furthermore, the Central Tax Board held that the legal costs had a direct link to the second applicant’s business activities.

On 1 December 2022 the Tax Recipients’ Legal Services Unit, which is tasked with overseeing the rights and interests of the tax recipients (i.e. the State), appealed against the Central Tax Board’s preliminary ruling to the Supreme Administrative Court. The Legal Services Unit claimed, inter alia, that the legal expenses of the first applicant should be taxable as his salary, in contradiction with the official guidelines, regardless of the outcome of the criminal proceedings against him. Even if the legal expenses were directly linked to the second applicant’s business activities, they were still the first applicant’s personal expenses and paying them constituted a benefit taxable as pay. Moreover, the Legal Services Unit claimed that the interest of the employer in such a criminal case was always secondary to the interests of the employee.

On 11 December 2023 the Supreme Administrative Court accepted the appeal and quashed the preliminary ruling of the Central Tax Board. It held that the first applicant’s legal expenses paid by the second applicant were to be considered as the first applicant’s taxable salary, regardless of the outcome of the criminal proceedings. The court held that the pre-trial investigation and the criminal proceedings were directed against the first applicant and therefore the legal costs were to be considered as his personal expenses. The first applicant had thus received a financial benefit, which under the wide interpretation given to the term “income” in Finnish taxation law, was to be treated as the employee’s taxable salary. Although it was within the first applicant’s work-related responsibilities to write articles, being a defendant in a criminal court could not be considered to be one of his work-related responsibilities. The court held that the situation was not to be evaluated differently on the basis of the first applicant’s assertion that it was the duty of the media and journalists to test the limits of freedom of expression.

By an agreement between the applicants, the second applicant has committed to cover also the applicable taxes on behalf of the first applicant. The second applicant has insured journalists for legal risks and the insurance policy will likely cover most, if not all, of the first applicant’s legal costs.

The first applicant complains under Article 10 of the Convention that writing an article and defending himself relating to that article has led to disproportionate tax consequences. It has also a chilling effect since journalists may not dare to conduct investigative journalism and write articles, if they risk effectively being punished with dire financial consequences of defending themselves. The second applicant complains that the Supreme Administrative Court’s decision has a chilling effect which prevents its journalists from writing on controversial topics or topics that the authorities wish to keep from the public discussion. Without journalists willing to write on important issues, there is nothing of relevant substance for the second applicant to publish. The situation is aggravated by the fact that Finland has one of the highest tax rates on salary income in the world.

QUESTION TO THE PARTIES

Has there been an interference with the applicants’ freedom of expression, in particular their right to impart information and ideas, within the meaning of Article 10 § 1 of the Convention by the Supreme Administrative Court’s decision to consider the first applicant’s defence costs in criminal proceedings, which had allegedly been paid by the second applicant, as the first applicant’s taxable salary? If so, was that interference prescribed by law and necessary in terms of Article 10 § 2? Furthermore, did this taxation decision have a chilling effect on the exercise of journalistic freedom of expression and prevent access to a court (see, mutatis mutandis, Gîrleanu v. Romania, no. 50376/09, §§ 68 ss., 26 June 2018; and Bedat v. Switzerland [GC], no. 56925/08, § 79, 29 March 2016)?