Notification of the reporting entity – how to fill out the web form

Table of contents

1 Notification of the Reporting Entity

2 Definitions

3 List of details to give

3.1 Reporting Role of the Reporting Entity

3.2 Fiscal year (=Accounting period)

3.3 CbC Report filer’s identity (name, Business ID)

3.4 Other Constituent Entities located in Finland

1 Notification of the Reporting Entity

Country-by-country reporting involves two separate reports:

  • The notification of the reporting entity – this indicates the identity of the party that has the obligation to file the report
  • The country-by-country report

All group companies and permanent establishments located in Finland must file the Notification if they are part of a multinational enterprise group with at least €750,000,000 of turnover/annual net sales on its consolidated profit-and-loss account.

Tax returns can be filed electronically on the fillable web form or as a software-generated file that you send us via Ilmoitin.fi. This guidance only concerns the fillable web form.

For more information on e-filing, visit tax.fi: Country-by-country reporting.

1.1 First step: Ascertain that you are required to file, and find out whether an international agreement on exchange of information is in force

When you are planning on filing the Notification you must first find out whether:

  • The group’s Ultimate Parent Entity must submit it in its country
  • Finland and the Ultimate Parent Entity’s country have an agreement in force on information exchange

If the Ultimate Parent Entity does not submit a report in its country (=state of domicile) or if there is no agreement on information exchange with that country, the Finnish subsidiary must ascertain whether the parent entity has designated one of the group companies to submit reports on its behalf. Such a company would be referred to as a “surrogate parent entity”.  

1.2 Collect facts and information about the party filing the CbC Report

For preparing the Notification, you must have:

  • The name and Business ID of the group company (the parent) that files the CbC Report
  • Name of the country that receives the CbC Report
  • The foreign ID code of the filer in case the CbC Report filer is a foreign (parent) company

Where “foreign ID” is mentioned, it means an identity code that the foreign company uses e.g. on its income tax returns in its country, or an identity code issued for the foreign tax authorities’ electronic filing service.

At the end of the web form, there is a space for listing other subsidiaries or group companies located in Finland on behalf of which you are filing the return. For filling in this space, you must have the names and Business IDs of these. You do not need a separate authorisation from the other companies for filing the CbC Report on behalf of them.

2 Definitions

2.1 Ultimate Parent Entity

The group’s Ultimate Parent Entity is the parent that under the provisions of Accounting Act (or a legal statute comparable to Finland’s Accounting Act) must draw up consolidated financial statements for the group, or would have to draw them up if its equity interests were traded on a public securities exchange in its jurisdiction of tax residence. It is also required that the Ultimate Parent Entity is not directly or indirectly controlled by another entity that would have to prepare consolidated financial statements.

2.2 Surrogate Parent Entity

The group company that has been designated as by the Ultimate Parent Entity as the company filing the CbC Report. Surrogate parent entities must file the Report to their state of domicile. The international term Surrogate Parent Entity indicates that it acts on behalf of the parent company.

The e-filed reports addressed to the Finnish Tax Administration refer to the Surrogate Parent Entity with the Finnish words “nimetty selvitysvelvollinen”.

2.4 The Reporting entity
 
The Ultimate Parent Entity is the party responsible for filing i.e. the reporting entity.

2.5 TIN

TIN is an abbreviation for Tax Identification Number. Finnish businesses and any foreign companies that are treated as having a permanent establishment in this country must use the Finnish Business ID instead. If the party filing the report is a foreign company, (a parent), you are required to give its foreign ID code comparable to the Finnish Business ID in ”Foreign ID code”.

2.6 Secondary Reporting Entity

This may be a Finnish subsidiary or a Finnish-located permanent establishment with the responsibility to submit the entire CbC Report information (not just its own company details) to the Finnish Tax Administration. In an exceptional state of affairs, the responsibility for reporting may be transferred from a parent to its Finnish subsidiary/permanent establishment. This would happen if the parent 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 activated with Finland.
  • The foreign parent entity does not have to submit a country-by-country report to the tax authority of its state of domicile because the state does not have legislation in force on country-by-country reporting.
  • The foreign parent company has not designated a group company as a Surrogate Parent that would assume responsibility for reporting in a country with which Finland has an agreement on information exchange. It would in this case also be that the surrogate parent entity’s state of domicile does not have legislation concerning country-by-country reporting. 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.

2.7 Tax jurisdiction

For purposes of this guidance, this term refers to the country of residence of the company filing the CbC Report. This may be the Ultimate Parent Company’s country.  The country may be Finland – in this case, the company must send its CbC Report to the Finnish Tax Administration.

3 List of details to give

3.1 Reporting Role of the Reporting Entity

When you fill in the Notification, you must indicate whether the entity submitting it is a reporting entity (Ultimate Parent), surrogate parent entity, secondary reporting entity, or none of the above. The first three roles indicate that you must send the CbC Report to the Finnish Tax Administration. Whenever another entity (including a foreign Ultimate Parent) than the Finnish-based filer is responsible for CbC reporting, you must select “None of the above”.

Example 1: Your company is a subsidiary located in Finland. The tax residence of your group’s ultimate parent entity is Sweden.

The Swedish parent must file its CbC Report to the Swedish Tax Agency which in turn will send it on to the Finnish Tax Administration.

The role selection that you as the Finnish-located subsidiary must make is “None of the above”.

The none-of-the-above role should also be selected by Finnish-located subsidiaries and permanent establishments in multinational enterprise groups that have Finland as the tax residence of the Ultimate Parent Entity.

Example 2: Your company is a subsidiary located in Finland. The tax residence of your group’s ultimate parent entity is the “X” country.

The foreign parent entity does not have an obligation to file a CbC Report to the tax authorities of “X”, its state of domicile. For this reason, the parent has designated its German subsidiary as the Surrogate Parent Entity that sends the CbC Report to the tax authority of Germany.

The role selection that you as the Finnish-located subsidiary must make is “None of the above”.

Example 3: Your company is the Ultimate Parent Entity and your state of domicile is Finland.

You, the ultimate parent entity of the group company must file Country-By-Country Reports to the Finnish Tax Administration, the tax authority of the state of domicile.

The role to be selected is “Ultimate Parent Entity”.

Example 4: Your company is a subsidiary located in Finland. The tax residence of your group’s ultimate parent entity is the “X” country.

The foreign parent entity does not have an obligation to file a CbC Report to the tax authorities of “X”, its state of domicile. The foreign parent, i.e. the Ultimate Parent Entity, has designated the Finnish subsidiary as the Surrogate Parent Entity. In this case, it must file the reports in Finland on behalf of the entire group.

The role to be selected is “Surrogate Parent Entity”.

3.2 Fiscal year (=Accounting period)

Indicate the start and end dates of your group’s ultimate parent entity’s fiscal year.

Illustration: This way, if the ultimate parent’s fiscal year is the calendar year, and your CbC Report is for 2018, enter:

2018-01-01     2018-12-31

3.3 CbC Report filer’s identity (name, Business ID)

Business ID and name

If the filer is a Finnish company, (a parent that is Finnish) or a permanent establishment, fill in its name and Finnish Business ID.

If the party filing the report is a foreign company, (a parent), fill in its name and foreign ID code (the TIN, Tax Identification Number). If a TIN is not available for the foreign company, fill in another identity code by which it can be identified.

Example 5: Your company is a subsidiary located in Finland. The tax residence of your group’s ultimate parent entity is Sweden.

The Swedish ultimate parent entity of the group must file Country-By-Country Reports to the Swedish Tax Agency.

You as the Finnish subsidiary must fill in the Swedish parent’s name and organization ID number.

Tax jurisdiction

You must indicate the country where the national tax authority will receive the CbC Report. In the circumstances described above in Example 2, you should select “Germany” because the report is filed there. In the circumstances described above in Example 5, you should select “Sweden” because the report is filed there.

Role of the party filing the CbC Report

The roles are either “Ultimate Parent Entity” (for the group’s parent) or “Surrogate parent entity”. Fill in this item only if your role when submitting the Notification is “none of the above”. This means that you are not filing a CbC Report to the Finnish tax authority.

Example 6: Your company is a subsidiary located in Finland. The party responsible for filing the CbC Report is the group’s ultimate parent company. Its country of tax residence is Sweden.

The role selection that you as the Finnish subsidiary must make is “Ultimate Parent Company”, referring to your Swedish parent company.

Example 7: Your company is a subsidiary located in Finland. The foreign parent entity does not have an obligation to file a CbC Report to the tax authorities of its state of domicile.

For this reason, the parent has designated its German subsidiary to provide the CbC Report to the tax authority of Germany.

The role selection that you as the Finnish subsidiary must make is “Surrogate Parent Entity”, referring to your group’s subsidiary in Germany.

Optional description

This section is for additional, more precise information. An example of what could be filled in here is that your multinational enterprise group has been sold in the middle of the year, which would mean that your group’s Ultimate Parent Entity has changed, and the company that bears responsibility of CbC Report filing is therefore a different company than previously.

3.4 Other Constituent Entities located in Finland

“Constituent Entities” are the businesses to be covered by the CbC Report, i.e. the report must contain information on these businesses. A group may have several Constituent Entities in Finland that must be included in the report content. The section below is intended to make the reporting requirement simple when a CbC Report must contain more than one Finnish-located group entities. It is enough if just one of the Finnish entities – a subsidiary or a permanent establishment – gives the details of all the other entities located in Finland. There is no need, in this section, to repeat the details of the party filing the report.

Example 8: The tax residence of an ultimate parent entity is Finland. The Finnish parent wants to send a report on behalf of all Finnish-located subsidiaries and permanent establishments.

When filling in the form, the parent company should enter the Business IDs and names under “Constituent Entities resident in Finland”. It is not necessary for the parent to repeat its own information in this section.

Example 9: “X Limited” is the foreign Ultimate Parent Entity of a multinational enterprise group and it must file a CbC Report to the authorities of its state of domicile. The Finnish “A” and “B” are group subsidiaries. Both of them must provide a Notification of the Reporting Entity.

In this case, “A” files its Notification stating that “X Limited” will file a CbC Report in its state of domicile. In addition, “A” indicates that “B”, a Finnish company, is also a subsidiary of the group. As a result, there is no need for “B” to file a report at all. When filling in the form, “A” fills in the “Constituent Entities resident in Finland” section with “B’s” name and Business ID.

However, if “A” does not do this, “B” must file a report of its own. If this happens and “B” fills in the form with its details, it must leave “Constituent Entities resident in Finland” blank.