Annual notification for payments to persons with limited tax liability in Finland 2020 – Instructions

This guidance concerns both the electronically supplied VSRAERIE and VSOSVYHT filings and the paper-printed Form 7809e.

Overview of changes from the previous year

The following payment types have been added:

C8 Interest paid to an equity savings account
E7 Dividend paid to an equity savings account
E8 Dividend paid to the final beneficiary, on which tax at source has or has not been collected based on the tax-at-source card
J2 Loss attributed to an endowment insurance contract
J3 Loss attributed to a capitalization agreement
J4 Loss attributed to fixed-period voluntary pension insurance
J5 Loss attributed to certain insurance contracts, subject to special tax treatment

A new field for “Amount of loss” has been added to the annual return.

When and how must an annual return be filed?

You must file an annual information return on payments you have made to non-resident taxpayers, i.e. persons with limited tax liability in Finland. Such payments include pensions, taxable social benefits, dividend and interest payments.

You must file the annual return regardless of whether tax at source has been withheld or ordinary tax withholding carried out in Finland. For example, interest income paid to a non-resident taxpayer must be reported even though it is usually exempt from tax under § 9 of the act on income tax (Tuloverolaki 1535/1992).

Submit your annual information return by 1 February 2021.

You can use e-services to submit your information return: Ilmoitin.fi, Apitamo/ApitamoPKI-interface and the Tax Administration’s fillable web forms are available. Information returns can also be filed on a paper form that you can download and print out.

You must file the information electronically if the annual information return concerns five or more beneficiaries. The e-filing requirement does not concern natural persons or estates.

Read more at How to report annual information.

How to make corrections to an annual information return

A new annual return submitted with the same identifying information always replaces the previous return. There can be only one return with the same identifying information for the same beneficiary. If there is an error in the identifying information, the information must be cleared and new information entered.

The identifying information of the annual information return includes:

• Identifier
• Type of payment
• Year of payment
• Payer's ID
• Beneficiary's Finnish personal ID or Business ID
• Beneficiary's date of birth
• Beneficiary's last name or corporate taxpayer’s full name
• Beneficiary's first names
• Non-Finnish personal ID or Business ID, or TIN issued in country of residence
• Country code of the residence country
• Account operator’s Business ID
• ISIN or name of product

Read more about making corrections to annual information returns.

Limited tax liability (non-residency)

A person has limited tax liability in Finland if they do not reside in Finland (non-resident taxpayer). An organisation is a non-resident taxpayer if it has not been established in accordance with Finnish legislation or if its registered domicile is other than Finland.

Read more about Tax residency and non-residency.

Information on the payer

In the case of dividends, payer-specific information must also be stated in the summary VSOSVYHT/7812Y/7812.

Information on recipients/beneficiaries

Year of payment

The year of payment is the calendar year when the payment was made or when the dividend or profit surplus could be drawn.

For more information about filing dividends and surplus, see the guidance Tax withheld on dividends, and returns to be submitted to the Tax Administration (in Finnish and Swedish, link to Finnish). The guidance also concerns non-resident taxpayers.

Recipient's name and address (7–11)

The beneficiary’s name and address in the foreign country of residence must be stated in full. If the beneficiary is a company, enter its full name (7). A natural person’s last name (7) and first names (8) are entered in different fields.

The country of residence is the country where the beneficiary has their permanent home and family. The country of residence of a beneficiary that is not a natural person is the country in which the company's actual headquarters are located.

It is important to fill in the address in a foreign country when you report dividends or interest. The payer needs the beneficiary’s identifying details in order to apply reduced tax rates (§10, act on the taxation of nonresidents' income (Laki rajoitetusti verovelvollisen tulon verottamisesta 627/1978)).

If the payer or the account operator does not know the beneficiary’s name, address, residence country and date of birth (if the beneficiary is a natural person) when they make the payment, they must withhold tax at source at 30%. If you are paying dividend on nominee-registered shares and the beneficiary’s only identifying detail you have is the tax treaty country (payment type E3), enter here the code for the tax treaty country, and in the name and address fields, enter the details of the foreign custodian.

As for payment type C6, more detailed instructions are given under Payment type (16) > Interest payments > C6 Interest, for which details of the final beneficial owner are not reported.

Read more at Payments of dividends, interest and royalties to nonresidents.

Beneficiary's Finnish personal ID, Business ID, or date of birth (12)

If the beneficiary is a natural person, enter their Finnish personal ID in the form ddmmyy-NNNT. If the person has no Finnish personal ID, enter their date of birth in the form ddmmyyyy. However, the Finnish personal ID is required for payment types RE, B1–B0 and P4–P7.

If the beneficiary is a company with a Finnish Business ID, enter the Business ID (on the form, enter the Business ID in the column for Finnish personal ID). You can enter the Business ID only for payment types C2–C6, D1 and E1 – E5. The Business ID is mandatory for the payment type E3, if the beneficiary is in the Custodian Register and has a Finnish Business ID. Enter the Business ID in the form 123456-2bb.

Tax identification number (TIN) of residence country, personal ID or Business ID (13)

Enter the Tax Identification Number (TIN) issued by a country of residence other than Finland.

• Check the TIN

As for payment type C6, more detailed instructions are given under Payment type (16) > Interest payments > C6 Interest, for which details of the final beneficial owner are not reported.

Country code of residence country (14)

Always enter the country code for the beneficiary’s country of residence. Please note that the country of residence of a non-resident taxpayer cannot be Finland (FI).

If the payment type is E3 or C6 and you do not know the country of residence, use the code XX.

Check the country code (ISO 3166) (www.iso.org).

Country codes for the tax treaty countries are also listed in the list of tax treaties in force.

Type of payment (16)

Enter the code for the type of payment. If you have made payments of various types to the same beneficiary, you must file a separate annual information return on each payment type.

Pensions

B1 Employment pension paid by public bodies (not from business activity)
B2 Other payment based on social security legislation (such as employment pension, farm closure pension or accident indemnity pension)
B3 Other than employment pension, paid by Kela or Finnish State Treasury
B4 Bought pension treated as earned income (such as voluntary pension contracts signed by the taxpayer or the employer)
B5 Pension paid by public bodies, derived from business activity
B7 Other pensions than those referred to in sections B1–B5 and B8 (such as pension based on vehicle insurance or other risk insurance)
B8 Bought pension treated as capital income (such as voluntary pension contracts signed by the taxpayer)
B9 Pensions based on voluntary individual pension plans, treated as capital income and tax raised by 20%
B0 Pensions or other payments based on voluntary individual pension plans, treated as capital income and tax raised by 50%

Benefits

Benefits include for example study grants, unemployment allowance and parental allowance.

AE Benefit (subject to tax at source)

If tax at source was withheld, the payment type is AE.

RE Benefit paid to a non-resident, subject to ordinary tax withholding

If tax was withheld based on a non-resident taxpayer’s tax card, the payment type is RE.

Interest

C2 Interest on deposits
C3 Interest on bonds and debentures, or a secondary market compensation
C4 Annual investment-fund profits
C5 Other interest
C6 Interest for which no beneficial owner is reported

Always use the payment type C2 for interest on deposits.

If interest was paid on a bond or if a secondary market compensation was paid, it is not mandatory to specify the beneficiary. Instead, you can specify such a reporting financial entity of a participating country or a US reporting financial entity as provided in the FATCA agreement between the USA and Finland that holds the financial account with funds on which the interest or secondary market compensation was paid.

In this case, enter the name, address in the country of residence and GIIN of the reporting financial entity. If no GIIN is available, enter the taxpayer identification number issued by the country of residence, and the country code for the interest beneficiary’s country of residence. Financial entity here refers to an entity where the interest beneficiary’s bond is held in a financial account.

C7 Interest accrued on assets saved under a long-term savings agreement
C8 Interest paid to an equity savings account

Other payments

D1 Other payment (e.g. scholarship, life insurance indemnity, etc.)
D2 Other yields on assets saved under a long-term savings agreement

Dividends and cooperative surpluses

Also use the following payment types for distribution of reserves of unrestricted equity.

Read more about the tax treatment of dividends paid to non-residents and about the tax withheld at source at Payments of dividends, interest and royalties by nonresidents.

E1 Dividends of direct-investment character according to the Parent-Subsidiary Directive or tax treaty
E2 Dividends, if the underlying shares are nominee-registered but the information of the actual final beneficiary, i.e. the owner, is reported in the annual return.
E3 Dividends, if the underlying shares are nominee-registered but a simplified procedure is followed and the information of the registered account operator is reported in the annual return, or if the information of the beneficial owner is not given and tax at source was withheld using the general rate.

If tax at source was withheld using the general rate and the final beneficiary's details are not reported, enter the name and address of the foreign custodian.

The Business ID is mandatory if the custodian is in the Custodian Register and has a Finnish Business ID.

If tax at source withheld on dividends has been refunded, report the dividends as E5 instead.

E4 Dividends other than mentioned above, and profit surplus paid by a cooperative society
E5 Dividends paid to final beneficiaries if tax withheld at source has later been refunded by the payer

Only report here the amount of tax at source that remains after the refund.

E6 Dividends on assets saved under a long-term savings agreement

E7 Dividend paid to an equity savings account

E8 Dividend paid to the final beneficiary, on which tax at source has or has not been collected based on the tax-at-source card

Payment type E8 is used in situations where tax at source was withheld or was not withheld based on the tax-at-source card when dividend was being paid, or the payment was adjusted during the year of payment but after the payment of dividends.

Losses

J2 Loss attributed to an endowment insurance contract
J3 Loss attributed to a capitalization agreement
J4 Loss attributed to fixed-period voluntary pension insurance
J5 Loss attributed to certain insurance contracts, subject to special tax treatment (§ 35 b, subsection 5, act on income tax (Tuloverolaki 1535/1992))

Payments based on long-term savings contracts

Revenues during the investment period

Revenues during the investment period may consist of dividend, interest and capital gain, etc. Report them under their usual types of payment (C7, D2 or E6).

If the payment type for dividend revenues is E6, also report them on the dividend summary VSOSVYHT/7812Y/7812.

Payments based on long-term savings contracts

Use the following types of payment for payments made after the expiry of a long-term savings contract. In payment types P6 and P7, enter the amount without interest.

P4 Payments derived from long-term savings contracts, treated as earned income
P5 Payments derived from long-term savings contracts, treated as capital income
P6 Payments derived from long-term savings contracts, treated as capital income and tax raised by 20%
P7 Payments derived from long-term savings contracts, treated as capital income and tax raised by 50%

Reporting payments deposited in long-term savings accounts

Payments made by the account owner on the basis of a long-term savings contract during the year are reported on the annual return 948/71/2009 (individual taxpayers' voluntary pension insurance premiums and payments based on long-term savings contracts). The information can only be submitted electronically.

Gross pay amount as basis for taxes (17)

Enter the amount of income (e.g. pension or dividend) on which tax has been withheld at source or tax withholding has been carried out, or on which tax would have been withheld, had it not been prevented by a tax treaty, directive or law.

When you use payment type B9, B0, P6 or P7, enter the amount of tax without the raise, i.e. do not use the raised tax rate specific to the payment type. The Tax Administration will calculate the raise during the tax assessment.

Taxes withheld (18)

Enter the tax at source withheld or ordinary tax withholding carried out. If the payer did not withhold tax and remit it to Finland, leave this section empty.

Deduction for tax at source (€510 per month or €17 per day) (21)

Report the deductions made from the payment during the year under the act on the taxation of nonresidents' income (Laki rajoitetusti verovelvollisen tulon verottamisesta 627/1978). Report the tax-at-source deduction only if the payment type is AE or D1.

When tax at source is withheld, €510 per month is deducted from the total amount of income to which a tax-at-source rate of 35% is applied. If the income accrued over a period of less than one month, the deduction from the total amount is €17 per day. However, the deduction cannot be greater than the amount of income. A precondition for the deduction is that the taxpayer presents a tax-at-source card to the payer.

Health insurance premium (24)

Report the insured person’s health insurance contribution withheld from the payment only if the person is covered by Finnish health insurance and no tax has been withheld based on a non-resident taxpayer’s tax card.

Pension that has been reclaimed (26)

Enter the amount of pension reclaimed by the payer, if the pension was originally paid in 2019 or earlier.

Amount of loss (27)

Enter the amount of loss (concerns new payment types J2, J3, J4 and J5).

When reporting loss, you must enter 0 in the field "Gross pay amount as basis for taxes (17)".

ISIN or name of product (097)

You can submit the ISIN of the payment or the name of product electronically (VSRAERIE).

The maximum length allowed is 25 characters. If the name is too long, you must truncate it at the beginning or end, whichever is better for the identification of the fund or the payment. When making corrections, make sure the name is identical in the original filing and the corrected filing.

In the case of dividends paid on nominee-registered shares, add a line number after the ISIN or product name to facilitate identification of the payment. Instead of the ISIN or product name, you can enter other identifying details, such as a line number.

Transaction code (049)

This code identifies the transaction of making a payment to the dividend or interest beneficiary, for example. The code is generated by the book-entry system of Euroclear Finland and is therefore not given on paper forms.