News |

Supreme Court ruling hobbles Liechtenstein tax probe

A Supreme Court ruling has allowed Finns suspected of tax evasion in Liechtenstein to avoid punishment. The loophole prevents tax authorities from notifying police about suspected tax evaders.

VEROhallinnon tunnus tyyliteltynä.
Image: Yle Uutisgrafiikka

Last November Yle’s A-Studio programme reported that the Finnish tax administration had received information on around 20 Finns’ bank accounts in the Liechtenstein bank LGT. The data came from the German intelligence service, which had purchased the data from a bank employee.

The case showed large-scale tax avoidance by Finnish citizens. Tax officials said some 50-60 million euros of investments were involved, with the account holders including “representatives of wealthy families, key employees at international companies and Finns enriched by selling their companies”.

The Tax Administration confirmed on Wednesday that the preliminary investigation has not progressed. That ensures the individuals involved will avoid criminal prosecution and their identities will remain confidential.

Supreme Court ruling blocking action

The reason is the Latin concept of ne bis in idem ("not twice in the same"), which corresponds to the principle of double jeopardy. As the tax office has investigated the cases, they cannot now be investigated by the police looking to file criminal charges.

In Finland, the practice has been for tax authorities to investigate and collect back taxes, while the police handle tax fraud charges. If the threshold for an investigation is reached, the case goes to trial.

In July, the Supreme Court made that procedure impossible by applying a ruling that is intended to make Finnish law consistent with judgements from the European Court of Human Rights. The new interpretation is that if a tax case has been investigated by the Tax Administration in pursuit of back taxes, it cannot then be passed to the police for criminal charges.

The loophole is expected to be fixed by a legislative change due to come into force at the beginning of next year, but that cannot be applied retrospectively to the Liechtenstein cases.

Latest in: News



Paper: Online collection scam took advantage of grieving family

Satasen seteleitä.

A family in the western coastal city of Pori lost their newborn child recently in a tragic series of events widely reported in the Finnish press. The family also incurred over 50,000 euros in debts during the ordeal. Moved by their plight, several private parties posted bank account numbers on various online forums in an effort to start a collection for the grieving family. Unfortunately, a local newspaper has revealed that at least one of the accounts has proven to be a clear incidence of scamming.

Our picks