lawyer in Finland and criminal law in Finland, tax fraud and white-collar crimes

Criminal Law in Finland

In Finland most of the crimes are listed in the penal code of Finland. However, some crimes are listed on other laws, thus making it difficult to know the relevant clauses.

In terms of the most common crimes committed, it is important to highlight the role of white-collar crimes. These crimes are not violent in nature, but they do however pose a serious threat to the economic society and have a personal effect on multiple individuals. The objective behind these crimes is to gain personal interest and business advantages by obtaining money, services, and property and also, by avoiding personal losses. 

Forms of white-collar or economic crimes are:

  1. Tax offences
  2. Accounting offenses
  3. Offenses by a debtor
  4. Fraud 
  5. Embezzlement 
  6. Securities market offenses
  7. Forgery
  8. Bribery
  9. Money laundering
  10. Identity thefts
  11. Intellectual property infringements
  12. Extortion 
  13. Insider trading

According to the Finnish Ministry of the Interior, tax fraud is the most common economic crime. The police in Finland receive around 2000 reports a year of potential offenses. Around 700-800 of these relate to tax fraud, whereas 400-500 relate to debtors’ offenses.

1. Tax offenses

Chapter 29 of the Criminal Code of Finland regulates offenses against public finances. 

Section 1 regulates tax fraud:

1. A person who 

(1) gives a taxation 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 statutory duty pertaining to taxation that is of significance in the assessment of tax, or 

(4) otherwise acts fraudulently, 

and thereby causes or attempts to cause a tax not to be assessed, a tax to be assessed too low or a tax to be unduly refunded, shall be sentenced for tax fraud to a fine or to imprisonment for at most two years.

On the other hand, Section 4 regulates tax violation:

1. A person who, in order to gain financial benefit for himself or herself or another, fails to pay in time one of the following for a reason other than insolvency or a stay on payments imposed by a court: 

(1) a withholding tax, a tax-at-source or a conveyance tax, 

(2) a turnover tax calculated per calendar month or a comparable tax payable on certain insurance premiums, 

(3) a value-added tax, or 

(4) an employer’s social security contribution 

shall be sentenced, unless the act is punishable as tax fraud, for a tax violation to a fine or to imprisonment for at most six months. 

2. However, a slight failure which has been rectified without delay is not deemed a tax violation.

The first clause of the provision includes the definition of the offense and its consequent sanction, such as fine or imprisonment.

The second clause of the provision regulates an attempt punishable. If such a clause is not included in the provision, the attempt cannot be punishable. 

An attempt of tax fraud is punishable, whereas an attempt of tax violation is not. This is much due to the fact that taxpayers are obligated to avoid failure to pay in time their taxes, as defined in the provision. 

It is also important to note that tax fraud is the primary offense, therefore the tax violation provision regulates the offense only as punishable unless it is punishable as tax fraud.

2. Accounting offenses

Chapter 30 of the Finnish Criminal Code regulates business offenses.

Section 9 regulates accounting offenses:

1. If a person with a legal duty to keep accounts, his or her representative, a person exercising actual decision-making authority in a corporation with a legal duty to keep books, or the person entrusted with the keeping of accounts, 

(1) in violation of statutory accounting requirements neglects the recording of business transactions or the balancing of the accounts, 

(2) enters false or misleading data into the accounts, or 

(3) destroys, conceals, or damages account documentation 

and in this way impedes the obtaining of a true and sufficient picture of the financial result of the business of the said person or of his or her financial standing, he or she shall be sentenced for an accounting offense to a fine or to imprisonment for at most two years.

Accounting offenses are often related to other economic crimes as well, as their main objective is often to cover up other crimes committed. As defined in the provision, the person has to have a legal duty to keep accounts and the action impedes obtaining a true and sufficient picture of the financial information of the business.

3. Offences by a debtor

Chapter 39 of the Finnish Criminal Code regulates offenses by a debtor.

Section 1 regulates dishonesty by a debtor:

1. A debtor who 

(1) destroys his or her property, 

(2) gives away or otherwise surrenders his or her property without an acceptable reason, 

(3) transfers his or her property abroad in order to place it beyond the reach of his or her creditors or 

(4) increases his or her liabilities without basis 

and thus causes his or her insolvency or essentially worsens his or her state of insolvency, shall be sentenced for dishonesty by a debtor to a fine or to imprisonment for at most two years.

Section 2 regulates fraud by a debtor:

1. A debtor who, in order to obtain unlawful financial benefit for himself or herself or another in bankruptcy, enforcement, debt adjustment or restructuring proceedings 

(1) conceals his or her property, 

(2) reports a liability that is false in full or in part, or based on a sham transaction, 

(3) gives other false or misleading information on a circumstance that is significant from the point of view of the creditors, or 

(4) fails to report a liability, 

shall be sentenced for fraud by a debtor to a fine or to imprisonment for at most two years

2. If the debtor rectifies the misleading information or otherwise prevents the effect of his or her actions on the proceedings before he or she attests to the correctness of the estate inventory or before the misleading information otherwise affects the proceedings, the act is not deemed fraud by a debtor.

As previously stated, approximately 400-500 reports relating to debtors’ offenses are received by the police yearly. Dishonesty by a debtor is very common in Finland, especially hiding assets by creditors and avoiding liability to pay. 

It is important to note the second paragraph of the fraud offense. The sentence will not be fraud if the debtor corrects their previous actions or statements before the beginning of proceedings.

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The penal code of Finland:

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