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Pre-emptive discussions are a service form to deal with challenging tax questions

Limited-liability companies and other business enterprises can ask the Tax Administration to arrange a pre-emptive discussion. For example, these discussions can assess the tax impacts of various changes or new arrangements in the organisation.

Pre-emptive discussions with the Tax Administration are intended to ensure greater predictability and certainty of taxation. A further objective is to guide the corporate entity to operate correctly. With pre-emptive discussions, the Tax Administration wants to facilitate the treatment of tax issues and improve the transparency of administrative operations. No fees are charged for the arrangement of pre-emptive discussions.

Check the situations where a pre-emptive discussion is suitable

Corporate entities may have tax questions to clear up in many different situations, and no answers can easily be found in the Tax Administration’s publications and guides. In these circumstances, it may be a good idea to ask the Tax Administration to arrange a pre-emptive discussion. The suitability of the pre-emptive discussion as a service form must first be assessed, and each case is decided separately.

It is possible for the Tax Administration’s representatives to provide instructions for conducting corporate arrangements. The discussion would in this case outline the planned corporate arrangements, and the resulting conclusion would provide the entity with information on the tax impacts of different alternatives. However, it is up to the entity or organisation itself to decide which alternative to implement.

Conducting a pre-emptive discussion

As a minimum, two employees of the Tax Administration with high qualifications normally participate in the discussion while the corporate entity is represented by at least one representative – or by an outside party with an appropriate authorisation. If necessary, members of the Tax Administration’s specialist management may be included. It is possible to organise the discussions in Teams instead of arranging a physical meeting at the corporation’s premises or at a tax office. See a diagram showing the discussion process (pdf).

The corporate entity will primarily receive advice and guidance during the discussion. Written guidance may be prepared later as necessary. After the discussion is finished, the Tax Administration’s representatives write a memorandum about it. One memorandum may cover a series of pre-emptive discussions if the tax issue has called for several meetings. After discussion, the Tax Administration sends a copy of the memorandum to the corporate entity’s MyTax account.  However, on request by the corporate entity, the memorandum is kept outside the MyTax account and not saved there. See an outline of the memorandum’s contents below.

Memoranda on a pre-emptive discussion must include the following:

  • Background information including reasons for arranging the discussion
  • Time and place of the meeting or meetings
  • The participants’ names
  • Description of what was talked about, a presentation of the corporate entity’s tax case, information on the way the issue has been interpreted
  • Information on any guidance or instructions given during the discussion.

Pre-emptive discussions on subjects connected to transfer pricing

In addition to the above, pre-emptive discussions may focus on transfer pricing matters.  In that case, one of the goals of the discussion is to state whether it is enough to provide a memorandum that contains guidance on transfer pricing to the company or would it be better if the company submit a request for an advance ruling on the pricing question. Various cross-border situations, with a limited number of foreign countries, a procedure called Cross-Border Dialogue is available as a replacement of the pre-emptive discussion. See further guidance on transfer pricing below.

The general objective of pre-emptive discussions is to work together with the taxpayer company in order to make sure that transfer pricing is arm’s length, which is a way to improve the predictability of corporate income taxation for the company. In the same way, it may strengthen legal certainty. Pre-emptive discussions are well suited for various appraisals of transfer pricing, including:

  • Pricing of a regularly repeated business transaction between companies in an associated relationship.
  • Appraisal of new suggested transactions between associated companies from an arm's length perspective.
  • Current need for updating the MNE group’s transfer pricing model.
  • Impact of a suggested business reorganisation on associated transactions inside the MNE, including pricing (relocations of production plants, rearrangements of sales districts).
  • Transfer of intangibles (for example, selling an intangible asset, or transferring the right to use an intangible asset).

The objective of Cross-Border Dialogue is the same as that of pre-emptive discussions: to guide the taxpayer companies to carry out actions that will be acceptable from the point of view of taxation before their planned arrangements are conducted. The Cross-Border Dialogue as a service form is useful in circumstances involving several countries, where the representatives of the MNE group need instructions about a tax question or problem from the tax authorities of 2 or more countries. It should be noted that matters connected to transfer pricing are particularly suitable for Cross-Border Dialogues.

However, the interpretations and statements received from different countries and their tax authorities are based on the respective country’s national tax legislation. Under the Finnish Act on Assessment Procedure, if the tax authority of Finland has given a written instruction to the taxpayer company, it must be treated as binding for the issuing tax authority on the conditions listed under (§26 of) the Act on Assessment Procedure. Cross-Border Dialogues cannot replace domestic or internationally prepared advance rulings, against which appeals can be lodged. Likewise, they do not replace Advance Pricing Agreements, APAs.

Protection of legitimate expectations

The guidance and instruction that the Tax Administration may give during pre-emptive discussions is treated the same as that given during tax audits and various control visits to the taxpayers’ premises.

If the matters brought up during a discussion have already a precedent in the established tax-assessment practice or in the case-law of courts, the corporate entity may receive a written guidance from the Tax Administration when the discussion is finished. The issued written instructions are binding for the Tax Administration if the conditions laid out in the Act on Assessment Procedure are fulfilled (§ 26, act on assessment procedure (Laki verotusmenettelystä 1558/1995) or §6 of the act on assessment procedure for self-assessed taxes (Laki oma-aloitteisten veron verotusmenettelystä 768/2016)).

If no established case-law or tax-assessment practice is in existence, or if there is disagreement between the participants on the issue of legal interpretation, we prompt the company to submit a request for an advance ruling on the matter. Advance rulings are subject to a fee. Read more about requesting an advance ruling.

How can my company request the arrangement of a pre-emptive discussion?

Pre-emptive discussions are designed for solving difficult tax questions encountered by corporate taxpayers, provided that the Tax Administration’s instructions and guidance do not contain the precise information that would be needed. However, in matters that do not coincide with the above definition of the pre-emptive discussion, we prompt you to familiarize yourself with the contents of Please contact our Telephone Service to obtain guidance.

You can request a pre-emptive discussion in MyTax. After logging in to MyTax, select Report or request information in a limited scope. When a representative requests a pre-emptive discussion through this functionality, the details they give are not connected in any way to their personal tax information.

Submit a request for a pre-emptive discussion

In MyTax, we will ask you to provide more details on the tax question or situation which the requested pre-emptive discussion would concern. Giving details on the matter will speed up the processing of the request. After we receive your request, we evaluate your particular case to decide whether a pre-emptive discussion would be a suitable service form. If necessary, we will ask you to provide more information.

If the suggested pre-emptive discussion concerns an insider-trading issue, please call the Tax Administration on the telephone or send your request with enclosures to the following postal address: Verohallinto PL 10 00052 VERO.

Page last updated 11/19/2023