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Tax and Legal News, August 2021

Corporate taxation

The Supreme Administrative Court has issued two rulings on the treatment of losses in mergers

The Supreme Administrative Court has issued rulings concerning the utilization of carry-forward tax losses in case of mergers. The rules generally require that the receiving company and/or its shareholders have held at least 50% of the shares in the merging company from the beginning of the loss year. Based on the issued rulings the ownership requirement may also be constituted indirectly in the merging company (presumably as long as shares are also held directly). Further, the shareholding in the receiving company has to be established equally from the beginning of the loss year, at which point also indirect holdings qualify. 

The Supreme Administrative Court issued a decision concerning the time of ownership of shares subscribed for in a tax-neutral transfer of business

Since the shares in the case had been subscribed for in proportion to and on the basis of former shareholding, the holding period of the subscribed shares was calculated from the time of acquisition of the shares on the basis of which the subscription right was acquired. Consequently, in the subsequent sale of the shares during the same year all shares were considered to have been held for at least a year, meaning in that case that the income from the sale was considered tax exempt.

OECD outlines the timetable for the international income tax reform project

OECD’s two-pillar framework reached a milestone June 1st when 130 countries and jurisdictions joined a plan to move forward with the international income tax reform project. Pillar One focuses on taxation of digital services of multinational enterprises allowing countries to tax these companies whether they have a physical presence in the country or not. Pillar Two introduces a global minimum corporate tax rate.

OECD states that some details still need work, but OECD aims to complete the project by the end of 2021 or at latest early 2022. Countries should be able to start implementing the new rules in 2023.


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Rami Karimeri

Rami Karimeri

Corporate Taxation, PwC Finland

Tel: +358 (0)20 787 7841

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