Reporting annual information on dividends paid to nominee-registered shares

The representative of the Authorised Intermediary must have a Finnish personal ID or a foreign individual’s unique identifier (UID) as well as a Suomi.fi authorization, so that it can use MyTax on behalf of the AI. The representative must request the UID and the Suomi.fi authorisation separately. If some other party, like a service provider, uses e-services on behalf of the AI, they need a Suomi.fi authorisation. For more detailed instructions on how to request UID and the Suomi.fi authorisation, see Suomi.fi authorisations for tax matters – how to grant and request authorisation.

An AI files the annual information return as a nil return (MessageTypeIndic: TRACE703), if it has not forwarded dividends during the reporting year in question. Therefore, the nil return is filed if the AI has not forwarded dividends in the custody chain nor taken responsibility of reporting the information on the dividend beneficiaries. In this case, the AI reports its own information in the annual information return but does not report any dividend payment information.

Principally, the AI closest to the dividend beneficiary reports the dividend of which 35 % tax has been withheld, along with information on a possible Contractual Intermediary. The AI shows the Tax Administration that it has not taken responsibility of the dividends in question by reporting the dividends and the tax at source of 35 per cent withheld from the dividends in its annual information return (see also instructions Authorised Intermediary question 5). In this case the dividend payor or the AI closer to the payor reports the dividends that have been forwarded to the AI in question.

The AI reports the identifying information of a CI (CI structure) when it has taken responsibility of dividends forwarded to the dividend beneficiary through the CI in question and it reports the identifying information of those dividend beneficiaries (Investor structure). The dividend payor reports the identifying information on the CI (CI structure) in its knowledge when there is no AI in the custody chain that would have taken responsibility of the dividends.

The information on the CI closer to the dividend beneficiary is reported also in situations where the identifying information on the dividend beneficiary can not be reported (tax at source is 35 %). In this case the name of the CI is reported in the Lastname element of the Investor structure. See also question 6.

When reporting dividends forwarded to another AI (OtherAI), the information of a possible CI inbetween is not reported.

Along with the identifying information of the AI (OtherAI), the information on the dividends forwarded to the AI in question are reported as well as the tax at source withheld from the dividends. The following information on the dividends is reported in the Payment structure: total amount of the dividends and the tax at source withheld on them along with the name of the dividend payor, the payment day and the ISIN code as specifying information.

If the dividend payments have been divided based on the beneficiaries' countries of residence or the applied tax rate, the payor or the AI can also report the applied tax rate if they so wish.

If the dividend payor or the AI does not have the identifying information of the dividend beneficiary, they can't report the information on the annual information return. In this case, tax at source of 35 % must have been withheld on the dividend at the time of payment (§ 8, Tax at Source Act). In these situations, the name of the CI closer to the dividend beneficiary is reported in the Lastname element of the Investor structure and the more detailed identifying information on the CI is reported in the CI structure. See also question 4.

In the annual information return, the legal form (EntityLegalType) of the dividend beneficiary is chosen based on what best describes the entity in accordance with the legislation in its country of residence. The options are sole proprietorship, corporation, government (including central bank of issue, agency or instrumentality), international organization, pension institution or fund, non-profit organization, collective investment vehicle, partnership, trust and estate. If none of the options describe the legal form of the beneficiary, the legal form is specified as "other) and possible further information about the legal form (LegalType) is reported as additional information (Investor/Organisation/OtherInfo).

If tax treaty benefits have been granted to the dividend beneficiary based on an Investor Self-Declaration (ISD), the legal form in accordance with the ISD is reported in the annual information return.

The AI must report the tax identification number (TIN) issued by the dividend beneficiary's country of residence. If the dividend beneficiary's country of residence does not issue TINs, the birth date of a natural person is reported instead and of an entity other identification number issued by an authority. If the dividend beneficiary has no identification number issued by an authority, then nine zeros are reported.
The TIN reported in the annual information return must correspond to the TIN specified in the tax-at-source card or the certificate of residence issued to the dividend beneficiary, or the TIN specified in the Investor Self-Declaration (ISD) that the beneficiary has provided.

The payment date that is reported in the annual information return is the date, when the dividend can be drawn in accordance with the dividend distribution decision, even though the dividend had been paid to the beneficiary's account on a later date.

When the beneficiaries of a flow-through entity are the beneficial owners of the dividend in accordance with the tax treaty and the tax treaty of the beneficiaries' country of residence has been applied at the time of payment, the beneficiaries of a flow-through entity are reported as dividend beneficiaries and the flow-through entity's name (EntityName) and tax identification number or other registration number (EntityID) are reported as additional information (Investor/OtherInfo).

If the tax treaty of the beneficiaries' country of residence is not applied at the time of payment, the identifying information of the flow-through entity who is the dividend beneficiary is reported (Investor/Organisation). In this case, the flow-through entity is not reported as additional information.

If the dividend beneficiary has a non-disclosure for personal safety reasons in the Population Information System, either in Finland or some other country, the address that is under the non-disclosure should not be reported. Instead, some other address, which is public and safe for the person in question, should be reported.  
 
More information:  Digital and Population Data Services Agency, A non-disclosure for personal safety reasons 

The grounds for granting tax at source benefits are specified in the RateReason element (Payment/WhtRate) when the applicable tax rate has not been the general tax rate based on a treaty. If in accordance with a special article of tax treaty, the applicable rate has been lower than the general tax rate of the treaty, the reason is specified in the RateReason element. The options are direct investment dividend according to a tax treaty (TRACEFINTREATY1) and special articles of a tax treaty (TRACEFINTREATY2).

The grounds for granting tax at source benefit are specified in the element also when the tax rate in accordance with the Finnish domestic tax legislation is lower than the general tax rate (20 or 30 %) for dividends in accordance with the Tax at Source Act. The options are comparability to a corresponding tax exempt Finnish entity (TRACEFINDOM1), dividend in accordance with the Parent-Subsidiary Directive (TRACEFINDOM2) and other reason based on national legislation (TRACEFINDOM3). Other reasons based on national legislation may be for example dividends paid to long term savings accounts or equity savings accounts, or dividend paid to an individual who works in a foreign diplomatic mission or for a special organisation in Finland (§ 12(1), Income Tax Act).

No information is reported in the element in situations where the tax withheld is 20, 30 or 35 % in accordance with the Tax at Source Act or the tax has been withheld in accordance with the general tax rate in the applicable treaty (e.g. Sweden 15 % or France 0 %). No information is reported in the element either when reporting information on dividends forwarded to another AI (OtherAI). In these situations the value "XX" is reported in the element.

If the dividend has been paid in assets other than cash (dividend in kind), the number of shares of the company distributing dividend that beneficiary owned on the dividend record date must be reported as additional information (Payment/OtherInfo) in the annual information return.

If the dividend has been paid as shares, the name of the company whose shares have been received and ISIN-code of shares received is reported as additional information. Also the number and total euro value of shares received as well as the market value per share received is reported.

If also cash dividends have been paid in the same dividend distribution, for example fractions, or the transfer tax has been paid on behalf of the shareholder, this additional information is reported as dividends paid in cash (CashPaid).

More information on the taxation on non-cash dividends in the guidance Taxation on non-cash dividends.

If the dividend payor has paid the transfer tax on behalf of the dividend beneficiary, also the amount of the transfer tax is reported as dividend income in the annual information return. In this case the portion of the transfer tax is additionally reported as dividends paid in cash (CashPaid) even though no tax at source could have been withheld on it. More information on the transfer tax that is dividends paid as securities in the guidance Taxation on non-cash dividends.

The account holders of the joint account must be reported separately in the annual information return. For each of the account holders, the portion of the dividend that the beneficiary in question is entitled to as well as the tax at source withheld on this portion are reported.

If the account holders of the joint account are known and 30 per cent tax has been withheld on the dividend, but there is no further evidence on the amount of the portions that each beneficiary is entitled to, the dividend can be divided in the annual information return into equal parts between the account holders.

The amount of dividend and tax at source withheld from them is always reported in euros. The amount of dividend in euros that the dividend distributing company has paid to the beneficiary, is reported in the annual information return. If, for example a foreign deposit bank has paid the dividend forward to the holder of the depository receipt in local currency, the euro amount of the dividend is reported as it was when distributing the dividend.

The annual information return is corrected by submitting a correction return, in which the previously reported information is corrected or deleted. The corrections are then assigned to individual structural elements of the annual information return. When correcting or deleting information in a separate structure, the whole structure must be resubmitted. For example, when correcting the dividend beneficiary's address, all information on the dividend beneficiary must be resubmitted including the dividend payment information. However, the previously submitted annual information return is not resubmitted in full.

Corrections are always submitted by the use of a schema that is valid at the time of correction. The correction procedure for the annual information returns is described in more detail in the technical guidance: Annual information returns & Instructions.

If the previously submitted annual information return is completely incorrect, it can be deleted by submitting a deletion return. When deleting the previous return, all related correction returns must also be deleted. If the payor or the AI deletes the previously submitted annual information return, it must submit a new annual information return in full.

A deletion return for the previous year can be submitted until the end of February. For example, an annual information return for 2021 can be deleted until 28 February 2022. If the previously submitted annual information return is completely incorrect and it is necessary to be deleted after the aforementioned date, the filer must contact the Tax Administration.

The submittal of a deletion return is described in more detail in the technical guidance: Annual information returns & Instructions.

If after the payment year the AI notices that tax at source was under-withheld from the dividend, it has to notify the Tax Administration of the error. The Tax Administration then imposes the tax on the AI that has assumed responsibility of the dividend. In this case, the amount of tax is not corrected in the annual information return. If the tax has been left unwithheld due to a reason other than the negligence of the AI, the Tax Administration imposes the tax on the dividend beneficiary.

If after the payment year the AI notices that too much tax at source has been withheld and the withholding has not been corrected, the dividend beneficiary can apply for a tax refund from the Tax Administration.