Finland: Supreme Administrative Court decision regarding withholding tax on dividends
The Supreme Administrative Court of Finland (Korkein hallinto-oikeus, KHO) issued a new withholding tax related decision on 13 January 2015 (KHO:2015:9). Details of the case on which the decision was taken can be found on the KHO website.
Based on the court case, foreign investment funds (resident in a non-EU member state) which can be regarded comparable to either a Finnish limited liability company or a Finnish investment fund may be exempted from Finnish withholding tax. The requirement for the exemption is, however, that there is a regulatory framework on exchange of (tax) information between Finland and the non-EU member state and that sufficient information on the comparability is provided.
Due to the above requirements, it is usually not possible to apply 0% withholding rate at the withholding stage (at source) unless the recipient has either obtained an advance ruling or Tax Authority’s refund decision confirming the withholding tax exemption.
We recommend that recipients consult their tax advisors and check the applicability of the above court case and examine possibilities to get refunds of earlier withheld taxes and/or obtaining the advance ruling for future withholding tax purposes.
We continue to monitor the Finnish market for developments and will provide more information as it becomes available.
| This Taxflash is intended to provide customers with general information gathered from different sources that are generally believed to be reliable. Clearstream Banking S.A. does not guarantee the accuracy or completeness of the information and does not undertake to keep it up to date. Use of the information made available in this Taxflash is at the customer’s own risk and Clearstream Banking S.A., its subsidiaries and affiliates expressly disclaim any liability for any errors or omissions reflected herein. The information in this Taxflash does not constitute legal or tax advice. |