September 2024
The Supreme Court of Finland: a financial benefit of over 1,000 euros is not deemed as a petty tax fraud
A failure to report income in the Finnish income tax return may cause administrative penalties or have criminal consequences. Criminal sanctions, for petty tax fraud, tax fraud or aggravated tax fraud, are stipulated in Chapter 29 of Finland’s Criminal Tax Code. Petty tax fraud arises if “the tax fraud, when assessed as a whole, with due consideration to the amount of financial benefit sought and the other circumstances connected with the offence, is to be deemed petty.” The maximum sentence for petty tax fraud is always a fine, while for “basic” tax fraud the sentence is either a fine or imprisonment for at most two years.
On September 12, 2024, the Supreme Court of Finland published a new precedent (KKO:2024:51) outlining the monetary threshold for a basic tax fraud. In the case, an individual had failed to report, in their personal income tax return, investment (capital) income of 4,558.67 euros. The avoided capital income tax was 1,094.08 euros.
In its reasoning, the Supreme Court noted that there was no precedent defining the threshold between a petty tax fraud and a tax fraud. The Supreme Court also observed that “the financial benefit” in financial crimes, i.e. in crimes committed with respect to property, should always be evaluated in a similar manner, irrespective of whether it concerned private property or public funds. Consequently, the Supreme Court concluded in its precedent that, when the financial benefit sought exceeds 1,000 euros, tax fraud can no longer be deemed as petty. Since, in this particular case, there were no other mitigating factors related to negligence in reporting income in the tax return, the individual was sentenced to a fine for tax fraud.
On September 12, 2024, the Supreme Court of Finland published a new precedent (KKO:2024:51) outlining the monetary threshold for a basic tax fraud. In the case, an individual had failed to report, in their personal income tax return, investment (capital) income of 4,558.67 euros. The avoided capital income tax was 1,094.08 euros.
In its reasoning, the Supreme Court noted that there was no precedent defining the threshold between a petty tax fraud and a tax fraud. The Supreme Court also observed that “the financial benefit” in financial crimes, i.e. in crimes committed with respect to property, should always be evaluated in a similar manner, irrespective of whether it concerned private property or public funds. Consequently, the Supreme Court concluded in its precedent that, when the financial benefit sought exceeds 1,000 euros, tax fraud can no longer be deemed as petty. Since, in this particular case, there were no other mitigating factors related to negligence in reporting income in the tax return, the individual was sentenced to a fine for tax fraud.
Legal Disclaimer
The information in this site has been prepared for general informational purposes only and it should not be used as a substitute for consultation with a professional tax, legal or other competent advisor. While we have made every attempt to ensure that the information contained in this site has been obtained from reliable sources, Effektiivi Oy is not responsible for any errors or omissions, or for the results obtained from the use of this information.
The information in this site has been prepared for general informational purposes only and it should not be used as a substitute for consultation with a professional tax, legal or other competent advisor. While we have made every attempt to ensure that the information contained in this site has been obtained from reliable sources, Effektiivi Oy is not responsible for any errors or omissions, or for the results obtained from the use of this information.
