Finnish media, journalist groups sound alarm over tax decision
15/12/2023 16:54
By Anne Kauranen
HELSINKI, Dec 14 (Reuters) - A decision by Finland's
Supreme Administrative Court this week that work-related legal
expenses are taxable income for all employees has alarmed
Finnish media and advocacy groups who are concerned it could
curb investigative work by reporters.
Finland generally scores well for press freedom, ranking 5th
on the Reporters Without Borders (RSF) global media freedom
index.
Union of Journalists in Finland chairwoman Hanne Aho said
the essence of journalism was tackling controversial issues,
including those that may lead to lawsuits, and the court's
decision means journalists could now face personal financial
risk doing their jobs.
"Financial liability can lead to self-censorship, meaning
that a journalist will not want to write about risky topics, and
this narrows freedom of speech," Aho told Reuters.
In its decision on Monday, the Supreme Administrative Court
said legal expenses paid by employers on behalf of employees
accused in work-related criminal cases are to be considered
taxable income, making employees personally liable for
corresponding income taxes.
The court's decision in principle can not be appealed in
Finland although opponents could potentially take it to European
courts if they argued it contravened the wording of the European
human rights declaration.
The decision was related to a separate and ongoing court
case against Finland's largest daily, Helsingin Sanomat and
three of its journalists, two of whom were found guilty in
January of revealing state secrets with a story they wrote back
in 2017 about Finland's military intelligence operations.
Sanoma SANOMA.HE , the media group that owns the paper, had
paid lawyers at least 2.4 million euros ($2.6 million) in
expenses to defend its journalists in the case, court documents
showed in January, meaning the related personal income taxes
would amount to hundreds of thousands of euros for the
journalists.
The Finnish tax authorities said they took the dispute over
the taxation of one of the convicted journalists' legal expenses
in the case to the Supreme Administrative Court due to
"ambiguity and judicial inclarity" of the tax rules.
Although the journalist's "duties had included preparing
articles to be published in the newspaper, his duties were not
to be considered to have included being a defendant in a
criminal trial," the court said in its decision.
"This is a very regrettable decision from the point of view
of the Finnish media and journalism as a whole, and it does not
take into account the broader effects on freedom of speech,"
Sanoma Media Finland CEO Pia Kalsta said of the tax ruling.
Kalsta said the company would pay its journalists' taxes in
the case, although it was not clear if this in itself would be
considered taxable income. A Sanoma spokeswoman told Reuters the
company was looking at ways to handle the matter.
The Council for Mass Media in Finland warned the decision
could have "extensive and serious consequences" for journalism
in Finland and called for changes to tax legislation, as did
several Finnish editors-in-chief.
Kai Telanne, CEO of another large Finnish media group, Alma
Media ALMAC.HE , said the tax decision was unreasonable, adding
that, "at worst, the policy leads to self-censorship in
newsrooms and endangers the independence of the media".
The Supreme Administrative Court declined to comment, in
line with its usual policy of not commenting on decisions.
Prime Minister Petteri Orpo was not available for comment, a
spokeswoman said.
The prosecutor, the three journalists who were charged, the
Finnish Defence Forces as well as Sanoma Media Finland have
appealed the verdict in the court case against Helsingin Sanomat
over revealing state secrets, the paper reported in June.
($1 = 0.9269 euros)
(Reporting by Anne Kauranen in Helsinki
Editing by Frances Kerry)
((anne.kauranen@thomsonreuters.com; +358401895560;))