4.  The applicant was born in 1971 and lives in Reykjavík.
5.  On 21 October 2010 the Directorate of Tax Investigation (Skattrannsóknarstjóri ríkisins) initiated an audit of the applicant’s tax return for the income year 2006. On 5 November 2010, the applicant was interviewed by the Directorate.
6.  The investigation was concluded with a report issued on 13 January 2011. By a letter of 14 January 2011 the Directorate informed the applicant that the case would be referred to the Directorate of Internal Revenue (Ríkisskattstjóri) for reassessment of his taxes. It also informed the applicant about the Directorate of Tax Investigation’s upcoming decision on possible criminal proceedings, listed possible ways of finalising the criminal procedure in the case and gave the applicant 30 days to comment. By letter of 18 February 2011, 5 days after the deadline, the applicant replied and requested the finalisation of the case with a decision by the Directorate, ordering him to pay a fine, or for the case to be sent to the State Internal Revenue Board (Yfirskattanefnd).
7.  On the basis of the Directorate of Tax Investigation’s report, the Directorate of Internal Revenue, ruling on 23 November 2011, found in particular that the applicant had failed to declare significant capital gains received in 2006. Therefore, it revised upward the amount declared as capital gains in his tax return for the income year 2006 and, consequently, re-assessed his taxes and imposed a 25% surcharge. The applicant paid the additional tax and tax surcharges.
8.  The applicant did not appeal to the State Internal Revenue Board against the decision, which thus acquired legal force three months later, in February 2012, when the time-limit for an appeal had expired.
9.  On 28 March 2012 the Directorate of Tax Investigation reported the matter to the Special Prosecutor. By a letter of the same day, the applicant was informed about it. On 14 September 2012 the applicant was interviewed by the police for the first time.
10.  On 10 October 2012 the Special Prosecutor indicted the applicant for aggravated tax offences. In particular, the applicant was charged with having under declared his income in his tax return of 2007. This included failure to declare significant capital gains received in 2006.
11.  By judgment of 16 May 2013, the District Court found that the applicant had acted with gross negligence, which was sufficient for criminal liability under the relevant provisions of the tax law, and therefore convicted the applicant of the charges against him. The court sentenced him to three months’ imprisonment, suspended for two years, and the payment of 24,006,000 Icelandic krónur (ISK; approximately 152,000 euros (EUR) at the material time). Furthermore, the applicant was ordered to pay legal costs of ISK 878,500 plus value added tax for his defence counsel.
12.  The applicant lodged an appeal against the District Court’s judgment.
13.  By a judgment of 22 May 2014, the Supreme Court rejected the applicant’s request to dismiss the case on the basis of Article 4 of Protocol No. 7 to the Convention. The court upheld the applicant’s conviction and confirmed his prison sentence. However, the Supreme Court sentenced the applicant to pay a fine of ISK 21,000,000 (approximately EUR 136,000 at the material time). In fixing the fine, the court had regard to the tax surcharge imposed. The applicant was ordered to pay legal costs of ISK 1,286,614, ISK 1,255,000 of that amount for his defence counsel.