Transfer Pricing
Country Summary
Finland

This document summarizes the transfer pricing requirements and regulations in Argentina. Finland is an OECD member and has fully incorporated BEPS Action 13 requirements into its tax legislation. The country’s transfer pricing laws and regulations comply with OECD guidelines. Transactions with foreign related parties and domestic companies require transfer pricing documentation. A 2018 guidance document replaces the 2007 version and adds Master Files and Local Files. There are no specific rules for APAs, but advance rulings can be applied in certain cases. The audit practice may focus on high-risk companies, business restructurings, intangibles, and more.

Overview:

Transfer Pricing Regulations in Finland

Finland is a proud member of the OECD and has diligently implemented all BEPS Action 13 requirements into its tax legislation, aligning with international best practices. Transfer pricing rules are outlined in the Act on Assessment Procedure, with specific references to the arm’s length principle and detailed documentation requirements.

Definition of Related Party

The National Board of Taxes defines associated companies in a manner consistent with international standards. A relationship is considered non-independent and non-arm’s length when a taxpayer holds an ownership interest exceeding 50% in shares, votes, or holds the right to nominate over half of another company’s board members, or holds a powerful position for other reasons. Documentation is required for transactions between domestic and foreign related parties and foreign companies with permanent establishments in Finland.

Advance Pricing Agreement (APA)

Finland does not have specific APA rules. However, an advance ruling can be sought for transfer pricing purposes in certain cases, with the relevant regulations found in the Act on Assessment Procedure.

Transfer Pricing Documentation

Finland requires detailed documentation for related party transactions. When transaction amounts are below EUR500,000, functional, comparability, and financial analyses are not required.

Inter-company (IC) Legal Agreement

Inter-company legal agreements have reduced importance in light of the OECD’s 2017 Guidelines, which prioritize the “conduct of parties.”

Production Process for TP Relevant Returns, Documents, Forms, and Financials

Different documentation obligations apply to small and medium-sized enterprises (SMEs). For large companies, documentation should be presented within 90 days upon the request of tax authorities. The statute of limitations is typically 5-6 years following the end of the relevant fiscal year. Documents in English, Finnish, or Swedish are accepted, with translation provided if necessary.

Penalties and Interest Charges

Non-compliance with documentation requirements can result in penalties of up to €25,000. There are also penalties for Country-by-country (CbC) reporting, ranging from EUR 150 to EUR 25,000 if reports are not provided or contain errors or omissions.

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