Supreme Administrative Court Brings Clarity to Asset Transfer Taxation of Option Rights

The Supreme Administrative Court also took a position on the asset transfer tax of shares directed by a company to itself in a share issue. To date, the Finnish Tax Administration has held that the offering of shares by a company for subscription by itself is deemed a transfer of securities subject to asset transfer tax. According to the Supreme Administrative Court’s decision, if a company directs a share issue without charge to itself in accordance with Chapter 9, section 20 of the Limited Liability Companies Act, no asset transfer tax is payable on such transfers of securities. As no outside party has subscribed for such shares, the transfer of shares is comparable to the subscription for new shares, which is exempt from asset transfer tax. However, the transfer of other treasury shares possessed by the company is still subject to asset transfer tax. This decision is significant, for example, to share issues and capital markets arrangements, because it will allow companies to direct issues to themselves and then give these shares onwards without the delay involved in issuing new shares.

It is possible to seek repayment of groundlessly paid asset transfer tax. We will be happy to provide more information.