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Instructions for filling out the form – Annual information return for payments to nonresidents (persons with limited tax liability) 2019

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

Table of contents

Overview of changes on the previous year
Introduction
Information on the payor
Information on the recipients/beneficiaries
 Beneficiary's name and address (7-11)
 Beneficiary's Finnish personal ID, Business ID, or date of birth (12)
 Personal ID or Business ID (TIN) issued in the country of tax residence (13)
 Country code of the country of tax residence (14)
 Type of Payment (16)
 Amount on which tax has been withheld at source, or ordinary domestic withholding has been carried out (17)
 Taxes collected at source, or withheld as withholding tax (18)
 Deduction for the Finnish tax at source (€510 per month or €17 per day) (21)
 Health insurance premium (24)
 Pension that has been reclaimed (26)

Overview of changes on the previous year

If the payment of wages or other earned income took place on 1 January 2019 or later, the payor must file the information to the Incomes Register instead. The Incomes Register has caused many changes to payors’ information-reporting process regarding nonresident beneficiaries. This guidance takes account of the changes.

We have additionally updated the following chapters and sections:

The “Introduction” section

The Introduction has a number of updates.

Beneficiary's name and address (7-11)

Updated for the part that concerns the C6 Type of Payment.

Personal ID or Business ID (13) issued in the country of tax residence

Updated for the part that concerns the C6 Type of Payment.

Pension that has been reclaimed (26)

The year is updated.

ISIN code or product name of the payment (097)

The instructions for this data element are updated.

Introduction

You must submit this information return to the Tax Administration by the end of January following the year when you have made payments to a nonresident, i.e. to a person with a limited tax liability in Finland. Payments to be reported are: pensions, social benefits subject to income tax, dividends, interest and certain other payments.

You must file the annual information return regardless of whether tax at source was collected, and regardless of whether you carried out ordinary domestic withholding on the payment. This way, interest paid to persons/corporate bodies with limited tax liability must always be reported, although interest is usually exempt from tax under § 9, act on income taxation. 

You can use e-services to submit your information return: Ilmoitin.fi, Tyvi services 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 your information returns electronically if you had five or more beneficiaries. However, the requirement of e-filing does not concern filers who are natural persons or estates of deceased people.

If you use electronic filing, the return must be submitted no later than 3 February 2020. If you file on paper, it must be submitted by 31 January 2020. If the deadline falls on a Saturday, Sunday or other holiday, the due date is extended to the next business day, i.e. the submitted filing must arrive at the Tax Administration on that day.

Read more about the different filing channels in Submitting the annual information return.

Making corrections; completing the data elements for identification

For more information, see “Making corrections to submitted annual information” (tax.fi > Forms > Annual information return forms).
The usual correction process involves that the most recent filing is the one that remains in force, replacing the previous filing(s). For one beneficiary, there can be no more than just one filing with the same identification information. If the data elements related to identification contain an error, the data set must be reset to zero. The filing must be replaced with a new one.
The identification items relating to this information return are:

  • Identifier
  • Type of Payment
  • Year of payment
  • Payor's ID
  • Beneficiary's personal identity code or Business ID
  • Beneficiary's date of birth
  • Beneficiary's last name, or full business name of a corporate entity
  • Beneficiary's first names
  • Personal ID or business ID code (TIN) issued in the country of tax residence
  • Country code of the country of tax residence  
  • Account operator’s Business ID
  • ISIN code or product name of the payment

Non-residency

Nonresidents are persons who do not live in Finland. An organisation is treated as a nonresident taxpayer if it has not been set up in accordance with Finnish legislation, or if its registered domicile is not Finland.

Read more on full liability and limited liability to pay tax.

Information on the payor

You must give the payor-specific details also on the VSOSVYHT summary.

Information on the recipients/beneficiaries

Year of payment

This is the calendar year when the money was paid or when dividends/profit surplus were ready for cash payment to the beneficiary.

For more information, see “Tax to be withheld on paid-out dividends” – Ennakonpidätys osingosta ja Verohallinnolle annettavat ilmoitukset (in Finnish and Swedish, link to Finnish). The rules on payment and reporting of dividends and surplus also apply to nonresident taxpayers.

Beneficiary's name and address (7-11)

For nonresident taxpayers that are your beneficiaries, enter the address in the foreign country of residence (not an address in Finland). If your beneficiary is a company, enter the full business name (7). If it is a natural person, enter his or her last name and first names in (7) and (8), respectively. The country of tax residence is the country where the beneficiary's permanent home is located and where his or her family members live. The country of residence of a beneficiary that is not a natural person is deemed to be the country where the headquarters, main office, place of management, etc. is located.

Note: it is important to fill in the address in a foreign country also in cases where you have paid out dividends or interest. In order for the payor to withhold various taxes at lower rates, the beneficiary’s identification information must be made available (in reference to §10, act on the taxation of nonresidents' income (Laki rajoitetusti verovelvollisen tulon verottamisesta 627/1978).

If you — or the accounting firm representing you — do not have precise information on the beneficiary’s/recipient’s name, address, country of tax residence, and date of birth (if the beneficiary is an individual), you are expected to withhold 30% as tax at source. If the payment consists of dividends (E3 Type) to a nominee-registered beneficiary for which only the country name is known (a country with which Finland has a tax treaty), enter the country code in this data element. Then fill in the appropriate data elements with the foreign asset-management company’s name, address, identity code etc.

As for the C6 Type of Payment, further instructions are given under Type of Payment (16) > Interest payments > C6 Interest for which no beneficial owner is reported.

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

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

Enter the beneficiary’s Finnish personal identity code if the beneficiary is a natural person. This is a required data element for the RE, B1–B0 and P4–P7 Types. If the payment falls into another category and no Finnish personal identity code is available, enter the beneficiary's date of birth. Personal identity code format is ddmmyy-NNNT and the format for the date of birth is ddmmyyyy.

If the beneficiary is a company that has been given a Finnish Business ID, enter the Business ID (however, on the Form, it would go to the column for the Finnish personal identity code). You can only give a Business ID when Type of Payment is C2–C6, D1 or E1 – E5. You must enter a Business ID if payments falling into the E3 Type have been made to parties entered in the Foreign Custodian Register that are holders of a Finnish Business ID. Use the 0123456-2bb format.

Personal ID or Business ID (13) issued in the country of tax residence

If you are aware of the beneficiary’s Tax Identification Number (TIN), enter it here.

As for the C6 Type of Payment, further instructions are given under Type of Payment (16) > Interest payments > C6 Interest for which no beneficial owner is reported.

Country code of the country of tax residence (14)

The country code of the tax-residency country is a required data element. For a nonresident taxpayer, it cannot be Finland (FI).

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

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

For E3 and C6 Types of Payment, and situations where you do not know the country, you can enter XX.

Type of Payment (16)

Enter the code in line 16. If you have a beneficiary that received many payments falling into several categories, you must file separate annual information returns to show each Type of Payment you have made.

Payments of pension

B1 Pension for retirement from work, paid by public corporate body (not from business activity)
B2 Other payments based on social-security legislation (such as employment pension, farm closure pension or accident indemnity pension)
B3 Pension, not retirement from work, paid by the Social Insurance Institution of Finland (KELA) or State Treasury
B4 Contract-based pension regarded as earned income (including voluntary retirement pension contracts signed either by the beneficiary or by the employer)
B5 Pensions earned in a public corporation engaged in business
B7 Other pension type than referred to above in B1-B5 and B8 below (e.g. motor accident insurance contract, other risk insurance contracts)
B8 Contract-based pension deemed as capital income (including voluntary retirement pension contracts signed by the beneficiary).
B9 Pensions based on voluntary retirement pension insurance contracts, raised by 20 percent (enter the original amount, without the 20-percent increase)
B0 Pensions based on voluntary retirement pension insurance contracts, raised by 50 percent and taxed as capital income

Social benefits

AE Social benefit (subject to tax at source)

Enter the AE Type of Payment for any paid-out social benefit (such as a student grant, unemployment allowance, parental allowance) if tax was withheld at source when you paid the benefit to a nonresident.

RE Social benefit paid to a nonresident, subject to ordinary withholding

Enter the RE Type of Payment for any paid-out social benefit (such as a student grant, unemployment allowance, parental allowance) if tax was withheld as instructed by a nonresident beneficiary’s tax card when you paid the benefit.

Payments of interest

C2 Interest on deposits
C3 Interest on bonds and debentures or a paid aftermarket bonus
C4 Annual investment-fund profits
C5 Other interest amounts
C6 Interest for which no beneficial owner is reported

Use the C2 Type of Payment for deposits that earn interest.

If interest payments were made on bonds, and if aftermarket bonus was paid, it is permissible to not identify the beneficiary. Instead, you can refer to the reporting financial entity of a participating country or the U.S. reporting financial entity, as provided in the FATCA agreement between the USA and Finland, indicating the identity information of the relevant entity that has the financial account connected to the interest or aftermarket bonus you had paid.

In this case, enter the name of the reporting financial entity, its address in the country of residence, its GIIN number – or if no GIIN is available, its Taxpayer Identification Number issued by the residence country, and the country code of the beneficiary’s country of tax residence. For purposes of this guidance, “financial entity” is the entity where the beneficiary’s bond security is being placed in a financial account.

C7 Interest on assets saved under a long-term savings agreement

Other payments

D1 Other paid amounts such as scholarships, and benefits or a settlement from a life insurance policy, etc.
D2 Other types of yields on assets saved under a long-term savings agreement

Dividends and cooperative surplus

Read more about the tax treatment of dividends paid to nonresidents in Receipts of dividends, interest and royalties by nonresidents.

E1 Dividends of direct-investment character within the meaning of the Parent-Subsidiary Directive or a tax treaty
E2 Other dividends, if the underlying shares are nominee-registered, but management is offered to the account holder as a service
E3 Other dividends, if the underlying shares are nominee-registered, but a simple reporting process is in use and the annual information return contains the name of the registered account operator, or, the beneficial owner’s information is not given and tax was withheld at a generally valid rate of tax at source.

If a source tax was collected using such a general rate, and the true beneficiary's details are not being reported (Type of Payment E3), enter the name and address of the foreign account operator or management firm in the fields for name and address.

You must enter a Business ID if payments falling into the E3 Type have been made to parties entered in the Foreign Custodian Register that have a Finnish Business ID.

If source taxes on paid-out dividends have been refunded at a later stage, you must report the dividends as E5 instead of E3.

E4 Dividends other than the previous Types of Payment, profit surplus paid by a cooperative society

E5 Payment of dividends to final beneficiaries if the withheld tax has later been refunded by the payor

Use E5 instead of E3 if a refund of tax at source took place. Only report the remaining amount of the source tax (under E5) that remains after the refund.

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

The above Types of Payment must be used not only for dividends, but also for any distributions made by cooperative societies.

Any distributions from the unrestricted corporate equity are treated the same way as distributions of dividends, and consequently, the above Types of Payment must be used.

Long-term savings transactions and payments (on Individual Retirement Accounts)

Reporting inbound payment based on long-term savings agreements

When a nonresident Long-term savings account holder has deposited money in the course of the reporting year, the account operator must file the annual information return with the data format specification (948/71/2009) — Annual information return to be submitted by insurance companies and 'PS' service providers: premiums of individuals' voluntary pension insurance contracts and deposits to individual retirement accounts. This information return can only be filed electronically.

Using the 7809e annual information return to report the yields

When a nonresident Long-term savings account holder has received yields or returns on his or her investment, the account operator must report them every year. The returns may consist of dividends, interest and capital gains and other types of yields, and the account operator should report them under their usual Types of payment such as C7, D2 or E6. Finland will not levy tax on them, but the information will be sent forward to the nonresidents' countries of tax residence.

When a nonresident beneficiary has had receipts of dividends, reported as E6, Form 7812, the annual information return on paid dividends, must be completed and submitted (item 24).

Using Form 7809e to report the outbound payments of long-term savings

When a nonresident account holder receives benefits after the savings period is over, the account operator must file an annual information return on Form 7809e.  When the raised tax rates connected with the P6 and P7 Types of Payment are reported, only enter the amount without the raise, because the Tax Administration will apply the higher rate of tax when carrying out the assessment of the nonresident beneficiary's income taxes.

P4 Payments derived from long-term savings contracts, deemed as earned income
P5 Payments derived from long-term savings contracts, deemed as capital income
P6 Payments derived from long-term savings contracts, taxable as 20% higher, and as capital income
P7 Payments derived from long-term savings contracts, taxable as 50% higher, and as capital income

Amount on which tax has been withheld at source, or ordinary domestic withholding has been carried out (17)

Enter the amount (of income, such as pension income or dividend income) from which the withholding tax (or tax at source) has been withheld or from which it would have been withheld, had there been no exemption on the basis of a bilateral tax convention, an EU Directive, or internal legislation (for example, a deduction relating to social-benefit income).

When the raised tax rates connected with the B9 and P7 Types of Payment are reported, only enter the amount without the raise, because the Tax Administration will apply the higher rate of tax when carrying out the assessment of the nonresident beneficiary's income taxes.

Taxes collected at source, or withheld as withholding tax (18)

This line is for reporting how much was withheld, either as tax at source or as ordinary domestic withholding. Enter nothing if you actually did not withhold the tax on the amount you paid to the beneficiary and did not pay it on to the Finnish Tax Administration.

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

Enter the total of deductions, for the entire year, made from wages in accordance with § 6 of the act on the taxation of nonresidents' income and capital (Lähdeverolaki, 627/1978). This deduction requires the AE or D1 Type of Payment.

When tax at source is being withheld, €510 per month is deducted from the gross amount subject to tax at the 35-percent rate. If the amount you paid relates to a shorter time than one month, the deduction should be based on €17 per day. However, the resulting deduction cannot be higher than the beneficiary’s income. Receiving the deduction requires that the beneficiary presents the payor with a tax-at-source card with an entry for the deduction.

Health insurance premium (24)

If you paid a nonresident beneficiary who carries a health insurance within the Finnish insurance scheme, enter the insured party’s health insurance premium here in line 24.

If the nonresident has presented a nonresident's tax card (instead of a card for tax-at-source), the insurance premium is included in the amount withheld. In this case, do not enter it in line 24 because it is included in what you enter in line 18.

Pension that has been reclaimed (26)

Enter the amount of pension that has been reclaimed back by the payer. This line is intended for pension amounts that were originally paid out during 2018 or earlier.

ISIN code or product name of the payment (097)

You can use an electronic filing channel to report the ISIN code or product name on the VSRAERIE information return.

Maximum length is 25 characters. If you enter a name, you must truncate it at its end or beginning. It must provide easy identification of the fund name or payment. If you make any corrections later, be sure to use the same name. Product name must be the same in the original filing and the correction.

If the dividends are for a nominee-registered share, add a line number after the ISIN code or product name in order to facilitate identification of the payments. The entry in this data element may also be a line number or another detail that uniquely identifies the payment, not necessarily an ISIN or a name.

Transaction code (049)

This code is for identifying transactions of payment of dividends or interest to their beneficiaries. The book-entry system generates the code. For this reason, it is not used on paper forms.