Tax and Legal News, May 2022

Corporate Taxation

Does the Finnish Tax Administration’s updated guidance regarding the interest deduction limitation rules respond to the open questions related to the changes in the legislation?

Based on the legislative changes that came into force on 1.1.2022, the Finnish Tax Administration has updated its guidance regarding the interest deduction limitation rules. The changes in the legislation concern changes to the balance sheet exemption (equity/assets test), the public infrastructure exemption, and the way non-deductible interests from previous years can be deducted. 

In regard to the balance sheet exemption, going forward any debt to a shareholder with at least 10 % share of direct or indirect ownership of the taxpayer or its shareholder would be treated as equity when calculating the group equity ratio. The legislation’s definition of stakeholders and ownership covers a large variety of scenarios where the debt will be treated as equity on the group balance sheet. Because of this, it might be very challenging for the taxpayer, especially in large groups of companies, to find out and prove that there is no debt in the group that should be treated as equity when applying for the balance sheet exemption.

When applying for the balance sheet exemption, the burden of proof lies with the taxpayer. Unfortunately the Finnish Tax Authorities’ updated guidance does not respond to the above mentioned challenges especially when it comes to large groups and complicated ownership and financing structures. 

The new rules concerning the balance sheet exemption are applied first in tax year 2022.

Technology

Deploying SAP Analytics Cloud

In modern SAP environments, SAP Analytics Cloud (SAC) is considered as the default analytics tool. Earlier we have discussed how you should plan SAC deployment. In this article, we look into the main aspects of the deployment that you should take into consideration.

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