Arrangements subject to the reporting obligation

Yes, you do, provided that the country is on the blacklist during the validity of the arrangement.

Payments between associated companies to blacklisted countries are reportable arrangements. Recurring payments need not be reported several times, however: all payments made with the same basis in the same country may be reported at once. The description of the arrangement must include the basis for the payments and the fact that the payments are recurring.

A separate report for a single payment must be submitted if the basis for the payment or the circumstances experience a material change as the result of which the payment can be considered a new arrangement.

Ordinary products of financial institutions include, for instance:

• Mortgages
• Investment products based on domestic legislation, such as investment policies, funds, equity savings accounts and equity investments
• Pension policies compliant with domestic legislation, such as statutory and voluntary pension products
• Life and non-life insurance products based on domestic legislation

As a general rule, you do not.

Arrangements that are related to the avoidance or evasion of the reporting obligation concerning financial account information must be reported on the basis of the characteristic of automatic exchange of information.

• If a payment removes the assets from the payer’s possession, which is the case when paying an invoice, for example, the assets are not considered the payer’s assets that must be reported as financial account information.
• However, if it is a payment to transfer the assets to be invested in an investment fund, for example, the assets still remain in the payer’s possession. In such a case, it constitutes a reportable arrangement if the assets are transferred to outside the reporting of financial account information.

No, it is not. A Finnish limited partnership is an independent legal person that is a taxpayer based on the Income Tax Act (Tuloverolaki 1535/1992) and that is considered a person resident in Finland in terms of the tax treaties of Finland. Finland is the tax domicile of such a limited partnership. Hence, if the payment recipient is a Finnish limited partnership, the recipient has a tax domicile and the prerequisites for a reportable arrangement are not met on this basis alone.

Reporting is not necessary in the following case, for example:

A group company located abroad plans to assign its unique and valuable intangible assets to its parent company located in Finland. The foreign company was acquired to the group through a corporate acquisition a while back, and the company has been operating independently since the acquisition. The company is well-established and operates in a stable industry. The market-based price of the intangible assets is determined by applying regular cash flow based value determination methods. Cash flow forecasts are prepared for the assignment date based on management forecasts. The forecasts can be deemed reliable when considering the industry. The discount rate is diligently determined, and it is also based on reference materials. The determination of the discount rate does not involve any especially uncertain assumptions.

Even though the example involves unique and valuable intangible assets – for which there are no reliable comparison values – the price can be reliably determined using value determination methods. As the cash flow forecasts and other assumptions used in the value determination are not especially uncertain, it is not, as a rule, a question of intangible assets that are difficult to value.

Yes. A cross-border transfer of intragroup functions, risks or assets is a reportable arrangement (section 22, paragraph 3 of the act on reportable arrangements in the field of taxation (Laki raportoitavista järjestelyistä verotuksen alalla 2019/1559)). In the merger, the Finnish company is dissolved without liquidation proceedings, and intragroup functions, risks or assets are legally transferred across the border from Finland to Sweden according to the principle of going concern. The projected annual earnings of the Finnish company before interest and taxes, i.e. EBIT, thereby permanantly decrease to less than 50%, because the company's activities in Finland are legally terminated.

However, an arrangement need not be reported to the Tax Administration if it does not fulfil the “EBIT test” specified in the provision. EBIT projections are used to evaluate whether the projected annual EBIT of the transferor, during the three-year period after the transfer, is less than 50% of what the projected annual EBIT of the transferor would have been if the transfer had not been made.

The service provider must report the arrangement to the Tax Administration within 30 days after a reporting threshold laid down in the act on reportable arrangements is exceeded. When the arrangement has been designed by a service provider, it can be regarded as having been made available for implementation at the very latest when an advance ruling can be requested on it. The requesting of an advance ruling or whether the ruling is positive or negative does not as such affect the reportability of the arrangement.

If the taxpayer does not request an advance ruling, the reporting threshold is exceeded when the service provider presents the plan to the client. The reporting threshold is exceeded even if the client decides not to implement the arrangement.