Preliminary Tax Discussions with the Finnish Tax Administration Reduce Uncertainty in Taxation

This submission seeks to ensure that the authorities have sufficient information to issue a decision on the matter either as soon as the discussions end or shortly thereafter. The written guidance provided by the Tax Administration in the discussion provides the taxpayer with the same protection of legitimate expectations as a preliminary ruling does. The taxpayer can also adjust its plans based on the guidance received in the discussions.

The Large Taxpayers’ Office has already been using preliminary discussions for some time. The Tax Administration decided to test their use with other corporate taxpayers in 2018 and has now extended the test to the tax year 2019. At best, this provides a faster route to obtaining a binding preliminary ruling than a normal written process, which at worst can last a year before a binding ruling—not to mention the possible appeal process.

Preliminary discussions are intended for challenging tax questions of corporate taxpayers. Though the system is still new, we have already assisted, for example, Danske Bank and Ilmarinen in confirming the tax treatment of the transactions concerned through preliminary discussions.

If you think your company could benefit from this new preliminary guidance channel or you would like more information on carrying out a preliminary discussion procedure in practice, we would be happy to help.

Please contact:
Mikko Alakare
Sari Laaksonen
Emmi Mäkäräinen