Finland: Draft legislation regarding interest on tax refunds payable to non-residents
Further to our Taxflash T13086 dated 24 October 2013, the Finnish government has issued a draft legislation, confirming that interest1 on tax refunds must be paid to non-resident beneficial owners.
This corresponds to the Supreme Administrative Court ruling (KHO 2013:148), dated 25 September 2013.
Additionally, the draft legislation includes a proposal to introduce an interest on outstanding tax due by non-residents resulting from insufficient withholding at source.
The amended legislation is intended to enter into force as of 1 January 2015 and is to be applied retroactively to tax refunds made in 2014. In practice however, the Finnish Tax Administration has already implemented the Supreme Administrative Court ruling from last year and started to reimburse interest on refund request.
We continue to monitor the Finnish market for developments and will provide more information as it becomes available.
1. The interest rate applicable for 2014 is 0.5%. The rate is however adjusted on an annual basis.
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