Minister of Economic Affairs Wille Rydman (PS) gave a speech at a shipyard in Helsinki on 27 November 2023. Rydman on Tuesday welcomed the Supreme Administrative Court’s (KHO) ruling as the most important ruling in decades for preventing “trash journalism”. (Mikko Stig – Lehtikuva)
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THE SUPREME ADMINISTRATIVE Court (KHO) on Tuesday ruled that a Helsingin Sanomat journalist is liable for taxes on legal fees incurred during a trial connected to a much-discussed story about the Finnish Defence Intelligence Agency (VKoeL).
The District Court of Helsinki in January fined the journalist for disclosure of national secrets.
Also another journalist was found guilty of the crime, but the court forwent sentencing on account of their lesser role in the story. The immediate superior of the lead author was acquitted of charges on account that they did not participate in any capacity in the disclosure of national secrets.
The criminal case is presently being considered by Helsinki Court of Appeal.
KHO on Tuesday ruled that although the legal services used by the main defendant had been ordered by their employer, they should not be regarded as corporate costs but rather taxable income for the employee because the pre-trial investigation and trial concerned specifically the journalist. It is irrelevant, it added, whether the charges were dismissed and whether a sentence was imposed.
Helsingin Sanomat incurred a total of 2.4 million euros in legal costs during the trial. Pia Kalsta, the chief executive of Sanoma Media Finland, said the company will reimburse the journalist for the taxes and continue to cover the legal fees of journalists in similar situations.
“This is a very regrettable decision for media and journalism in Finland,” she said in an internal press release according to Helsingin Sanomat.
“It fails to take into account the wider implications for freedom of speech. The deterrence created by the ruling, at worst, limits the ability of editorial teams and media companies to pursue ambitious and especially investigative journalism,” she explained. “We have to make sure the ruling does not have an impact on the work and everyday decision-making of editorial teams. We will carefully examine the ruling’s contents and practical implications.”
Minister of Economic Affairs Wille Rydman (PS) contrastively welcomed the ruling.
“I consider the ruling right in terms of taxation, but it’s even more important for the press culture in Finland. After all, this may be the most important ruling in decades that prevents trash journalism,” he declared on X.
Rydman has criticised Helsingin Sanomat ever since the newspaper published a story in which several women accused him of inappropriate conduct. He called for a criminal inquiry into the story, accusing the newspaper of aggravated defamation and dissemination of information violating personal privacy.
The pre-trial investigation is ongoing.
Both the Finland Chamber of Commerce and Confederation of Finnish Industries (EK) on Tuesday voiced their concern about the possible implications of the ruling for businesses across industries.
Tomi Viitala, a tax expert at Finland Chamber of Commerce, said the implications are not limited to the media sector.
The chief financial officer of a listed company, for example, could be charged with an information offence concerning the securities market in a situation where there are suspicions that the company delayed the issue of a profit warning. The legal fees paid by their employer would under the ruling be regarded as taxable income also in the event that the officer was acquitted of charges after a years-long legal process.
“The tax legislation should be amended so that the legal fees paid by employers are not regarded as taxable income for the employee if the act that is under criminal investigation was conducted in professional capacity and the employee did not act in violation of employer instructions,” he proposed in a press release on Tuesday.
Aleksi Teivainen – HT
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Source: www.helsinkitimes.fi
