FOURTH SECTION
Application no. 35232/11
Harry Veijo Juhani PIRTTIMÄKI
against Finland
lodged on 9 June 2011
STATEMENT OF FACTS
The applicant, Mr Harry Veijo Juhani Pirttimäki, is a Finnish national, who was born in 1955 and lives in Jyväskylä. He is represented before the Court by Mr Ossi Taurén, a lawyer practising in Helsinki.
A. The circumstances of the case
The facts of the case, as submitted by the applicant, may be summarised as follows.
The applicant owned shares in a limited liability company. In 2001 and 2002 a tax inspection was conducted in the company for the tax years 1996 to 2001. The tax inspectors found that the company was not owned by four different English companies but in reality the applicant and three other Finnish persons owned it, with equal shares.
Administrative proceedings against the company
On 26 February 2003 additional taxes and tax surcharges (veronkorotus, skatteförhöjning) were imposed on the company for the tax years 1997 to 1999 and 2001.
The company sought rectification from the local Tax Rectification Committee (verotuksen oikaisulautakunta, prövningsnämnden i beskattningsärenden).
On 16 March 2005 the Tax Rectification Committee partly accepted, partly rejected the company’s applications.
The applicant, in the name of the company, appealed to the Administrative Court (hallinto-oikeus, förvaltningsdomstolen), claiming that he owned the whole company through four English companies.
On 28 February 2007 the Helsinki Administrative Court rejected the company’s appeal and upheld the taxation decisions. It found that there was no proof that the English companies had in fact been sold to the applicant but, on the contrary, the case documents showed that in reality all four Finnish persons behind the English companies had equally exercised their powers in the company.
On 10 August 2009 the Supreme Administrative Court (korkein hallinto-oikeus, högsta förvaltningsdomstolen) refused the company leave to appeal.
Administrative proceedings against the applicant
In connection with the company taxation, additional taxes and tax surcharges were also imposed on the applicant as he had received disguised dividends from the company. He was to pay 8,500 Finnish marks (FIM) in tax surcharges for the tax year 1997 (1,429.60 euros, EUR), FIM 5,000 for the tax year 1998 (EUR 1,021.43), FIM 6,000 for the tax year 1999 (EUR 1,211.64) and FIM 10,000 for the tax year 2001 (EUR 1,904.50).
The applicant sought rectification from two local Tax Rectification Committees.
On 25 April 2005 the Sisä-Suomi Tax Rectification Committee rejected the applicant’s applications in respect of the tax years 1998, 1999 and 2001.
On 31 May 2005 the Kaakkois-Suomi Tax Rectification Committee rejected the applicant’s application in respect of the tax year 1997.
The applicant appealed to the Administrative Court, claiming that there was no reason to impose additional taxes and tax surcharges as he was the only shareholder in the company.
On 16 April 2007 the Hämeenlinna Administrative Court rejected the applicant’s appeal against the decisions concerning the tax years 1998, 1999 and 2001. It found that in reality the company was owned by four Finnish persons with equal shares and therefore the taxation decisions were not incorrect.
On 30 December 2008 the Kouvola Administrative Court rejected the applicant’s appeal against the decision concerning the tax year 1997. It found, like the other courts, that the applicant could not be regarded as the sole owner of the company.
On 10 August 2009 the Supreme Administrative Court refused the applicant leave to appeal against any of the above-mentioned tax decisions.
Criminal proceedings against the applicant
On 7 March 2002, on the basis of the tax inspection, the tax authorities requested the police to investigate the matter. The applicant was arrested on 4 June 2002 and his office was searched the same day. He was questioned by the police for the first time on 5 June 2002 and was released thereafter. The pre-trial investigation was concluded on 29 December 2006.
On 11 July 2008 the public prosecutor pressed charges against the applicant. The applicant was accused of an accounting offence (kirjanpitorikos, bokföringsbrott) for having introduced incorrect and misleading information in the company bookkeeping between 1997 and 2001, and of aggravated tax fraud (törkeä veropetos, grovt skattebedrägeri) for having given incorrect information to the tax authorities between 1998 and 2002. As a result, the company had evaded 59,335.69 euros in taxes.
On 30 September 2009 the Kotka District Court (käräjäoikeus, tingsrätten) convicted the applicant as charged and sentenced him to a one year suspended sentence. As to the length of the proceedings, the court noted that the proceedings had lasted by then 7 years and 4 months. The proceedings had been unusually long and the length was not attributable to the applicant. The proper sentence for the applicant would have been imprisonment for one year but due to the excessive length it was turned into a suspended sentence.
The applicant appealed to the Appeal Court (hovioikeus, hovrätten), requesting that the charges be dropped as he had already been convicted in the matter: tax surcharges had been imposed on him and a final decision delivered.
On 2 July 2010 the Kouvola Appeal Court upheld the District Court’s judgment. As to ne bis in idem, the court found that the decisions containing tax surcharges had become final on 10 August 2009. As the charges had been pressed before that, on 11 July 2008, there was no impediment to the examination of the case as the charges had been brought before the administrative proceedings had become final. As to the merits, the court found that the applicant’s true position in the company had been concealed in order to avoid his responsibilities and that in reality he had been as much involved as the other shareholders. He could thus be held responsible for the company’s bookkeeping as well as the incorrect information given to the tax authorities.
By letter dated 30 August 2010 the applicant appealed to the Supreme Court (korkein oikeus, högsta domstolen), reiterating the grounds of appeal already presented before the Appeal Court and claiming in particular that he had been convicted twice in the same matter. He also pointed out that the proceedings had already lasted for more than 8 years.
On 14 December 2010 the Supreme Court refused the applicant leave to 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 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 tax payer shall be ordered to pay unpaid taxes together with an 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 recent 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 accorded to pending cases (lis pendens) crossing from administrative proceedings to criminal proceedings or vice versa.
COMPLAINTS
The applicant complains under Article 6 § 1 of the Convention about the excessive length of the criminal proceedings against him.
He complains that Articles 6 § 2 and 7 of the Convention were violated when he was convicted of an accounting offence and aggravated tax fraud even though he had had nothing to do with the company bookkeeping or tax declarations. He claims that he was not even in a position in the company to be able to commit these crimes.
Finally, the applicant complains under Article 4 of Protocol No. 7 to the Convention that he has been tried and convicted twice for the same offences as the taxation decisions had become final on 10 August 2009 and he was convicted of an accounting offence and aggravated tax fraud thereafter.
QUESTIONS TO THE PARTIES
1. As far as the applicant’s personal taxation and the aggravated tax fraud charge are concerned, has he 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? If so, did the proceedings fall within the exceptions envisaged by Article 4 § 2 of Protocol No. 7?
2. Was the length of the criminal proceedings in the present case in breach of the “reasonable time” requirement of Article 6 § 1 of the Convention?
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