Country-by-country reporting

Country-by-country reporting on taxation applies to multinational group companies with a consolidated turnover of at least €750 million.

  • If the group company’s consolidated financial statement is prepared in a currency other than euros, the threshold is considered to be the turnover limit set in the legislation of the state of domicile of the group company’s ultimate parent entity roughly equivalent to €750 million based on the conversion rate in January 2015.
  • If the ultimate parent entity’s state of domicile does not have legislation concerning country-by-country reporting on taxation, the €750 million threshold is calculated by converting the currency used in the consolidated financial statement into euros with the January 2015 conversion rate.

Example: According to United States legislation, reporting obligation applies to multi-national company groups with a turnover of at least $850 million.

Country-by-country reporting involves two separate reports.

  • The notification of the reporting obligation - applies to all group companies and permanent es-tablishments in Finland.
  • The country-by-country report - applies mainly to the group company’s ultimate parent entity.

Guidance: Country-by-country report

Submit reports online

To submit a notification of reporting entity or a country-by-country report, you will need a Katso ID or Suomi.fi authorisation. If you use Katso, you must have one of the following Katso roles:

  • Master User
  • Parallel Master User

  • Income Tax Return Filer

  • Annual Information Returns

If an agent submits the reports, they must have authorisation for the role of Income Tax Return Filer or Annual Information Returns.The notification opens with the login page. After you have logged in, the service will link you to the correct form.

You can submit the notification of the reporting obligation in two ways:

 

You can submit the country-by-country report in two ways:

You can find reports you have filed earlier in My e-Services.

Country-by-country report

Usually, only the ultimate parent entity of the group company is obligated to submit country-by-country re-ports to the tax authority of its state of domicile. This authority will, in turn, provide the report to the Finnish Tax Administration. A Finnish group company or permanent establishment does not need to submit a sepa-rate country-by-country report to Finland if its ultimate parent entity has submitted the report to a state that has an information exchange agreement with Finland.

Example: The group company’s ultimate parent entity’s state of domicile is Sweden. The group company has a subsidiary in Finland.

The Swedish parent entity must submit its country-by-country report to the Swedish Tax Agency which in turn will send it on to the Finnish Tax Administration. The Finnish subsidiary does not need to compile a separate report, as the Swedish parent entity compiles it on the subsidiary’s behalf.

 

The Finnish subsidiary and permanent establishment must make sure whether the parent entity is obliged to provide country-by-country reports in its state of domicile. If the ultimate parent entity does not submit a report in its state of domicile, the Finnish subsidiary must ascertain whether the parent entity has designated one of the group companies to submit reports on its behalf. This company is referred to as a “surrogate parent entity”.

Country-by-country reports must be given on accounting periods that have started 1 January 2016 or later. Accounting periods are determined by the consolidated financial statement of the ultimate parent entity. The group company’s ultimate parent entity or surrogate parent entity will submit a country-by-country report to the tax authority of its state of domicile within 12 months from the end of the accounting period. This authority will, in turn, automatically provide the report to the Finnish Tax Administration.

Exceptions

Finnish group companies and permanent establishments located in Finland are obligated submit country-by-country reports to the Finnish Tax Administration only in exceptional situations.

A Finnish company must submit the report if its ultimate parent entity is foreign and one of the conditions listed below is fulfilled:

  • The tax authority of the foreign parent entity’s state of domicile does not provide the country-by-country report to the Finnish Tax Administration because the state does not have an information exchange agreement with Finland.
  • The foreign parent entity is not obligated to submit a country-by-country report to the tax authority of their state of domicile because the state does not have legislation concerning country-by-country reporting on taxation.
  • The foreign parent entity has only designated a surrogate parent entity in a state that does not have an information exchange agreement with Finland. The surrogate parent entity’s state of domicile does not have legislation concerning country-by-country reporting, either. In other words, under these circumstances the Finnish Tax Administration does not receive a report from the tax authority of the surrogate parent entity’s state of domicile due to the lack of relevant legislation and international agreements.

In this example, the Finnish limited liability company is obligated to submit country-by-country reports to the Tax Administration as a “secondary constituent entity”. More information on secondary constituent entities is available in the detailed guidance on country-by-country reporting in Finnish and Swedish.

If the situation is unclear, contact the ultimate parent entity to ascertain which group company is obligated to submit the reports. You can also contact the Tax Administration by e-mail: siirtohinnoittelu@vero.fi

Further information:

 

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