|Alder & Sound|
|Borenius, Taxand Finland|
|Firms to wach|
|Bird & Bird|
Although transfer pricing has become one of the hottest topics in mainstream media and public discussion in Finland, uncertainty remains around the subject of the impact of the OECD's BEPS project. There have been no regulatory changes as a result of BEPS, however, in December 2015 the Ministry of Finance published a draft bill outlining the project to implement updated TP documentation requirements including country-by-country reporting (CbCR). The bill would require companies to also file master and local files on financial years on or after January 2016, with effect from January 2017.
Advisers suggest the proposal will be implemented later this year but that before regulation changes, the authorities' attitudes are already aligning with BEPS. "The Finnish tax authorities have been actively involved in the OECD's BEPS project and therefore the different approaches presented in the BEPS discussions drafts and reports, final or not, have already been applied retroactively in the daily monitoring, ongoing audits and assessment processes," said Petteri Rapo, senior associate and acting CEO at Alder & Sound.
One major area that has felt the effect of the project is audit and assessment processes. The number of transfer pricing auditors has significantly increased over the past years and there has been a crackdown on transfer pricing practices. Multinationals are particularly feeling the pressure as the authorities challenge their structures more. "The biggest thing in the Finnish tax market is that the Finnish tax administration has been very aggressive in tax audits and in the court cases that are pending," said Janne Juusela, head of tax at Borenius, Taxand Finland.
While Finnish taxpayers in general are feeling a growing aggressive trend from the authorities, it is especially evident in transfer pricing cases. Advisers reported there have been an increase in audits in recent years as well as questionnaires relating to TP issues during the yearly tax assessment. "In some cases, the eagerness to act on the topic has not had support from the facts of the case, resulting in significant assessments and disputes without proper substance or sufficient argumentation to back up the adjustment measures," said Rapo.
Apart from the increase in audits and aggressive tax authorities, it has been a stable year in Finland. Juusela said: "The current government have been very passive on tax legislation so there hasn't been any major proposals." Transfer pricing professionals expect BEPS actions to be implemented later this year or next year.
Finnish Tax Administration
Finnish Tax Administration, OCR Service, Corporate, PL 200, 00052 VERO
Tel: 020 697 051 (from inside Finland); +358 20 697 051 (from outside Finland)
(As of April 2016)
|Corporate income tax||20%|
|Capital gains tax||20%|
|Branch tax rate||20%|
Net operating losses (years)
Source: EY 2016 Worldwide Corporate Tax Guide