Corporate tax deadline approaching - time to get your Finnish compliance in place

When operating in the Finnish market, several compliance obligations have to be considered for legal and tax purposes. Meeting country specific compliance obligations is not always easy and local advice might be needed, especially as compliance has been seen to become increasingly complex also in Finland.

Greater Focus on Transfer Pricing and on Branches

In 2017, the Finnish Tax Administration (FTA) launched a new tax return form 6U for branches and permanent establishments. The following year, in 2018, the FTA made a considerable update to the tax form 78 (Explanation of Transfer Prices), with several new information requirements. The new form 78 resembles the actual transfer pricing documentation. Therefore, the form 78 should be prepared with special care and in accordance with the transfer pricing documentation.

Cost and income allocations may be subject to increased attention by the FTA. It is crucial to pay attention to the careful preparation of tax forms 6U and 78.

Further, in 2018, the FTA published guidelines regarding cost and income allocation for Finnish branches and permanent establishments. It can be seen that with these recent updates, the tax authorities have become more concerned with transfer pricing and particularly foreign groups’ operations in Finland.

Good to know regarding e-filing

FTA is using the e-filing authorisation KATSO only until the end of 2019. Starting from November 2018, FTA introduced Suomi.fi service for authorising another party to manage tax matters and file returns. A company or a branch working in Finland needs to authorise the party submitting the tax return in good time, as the process may be time-consuming.

New tax law changes that are applicable from tax year 2018 onwards

The tax assessment period will end on a company specific basis. In practice, for most companies the tax assessment period will end sooner than in previous years.
FTA may impose a penalty payment for the late filing of the corporate income tax return, or a tax increase for incomplete filing.
Revised interest deductibility restrictions will come into force from 1 January 2019.

Should you have any questions, we are happy to help!