Finland: Transfer pricing documentation rules, country-by-country reporting proposal

Finland: Transfer pricing documentation rules

The Ministry of Finance on 21 December 2015 released for public comment a proposal to revise the transfer pricing documentation rules and introduce country-by-country (CbC) reporting.

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The proposal—released as a draft bill—includes CbC reporting, master file and local file requirements, and penalty provisions, and generally follows the recommendations of the OECD’s base erosion and profit shifting (BEPS) Action 13, Report on transfer pricing documentation and country-by-country reporting.

The Ministry of Finance has requested comments be submitted by 25 January 2016. The government intends for the provisions to be enacted and effective beginning 2017.

Country-by-country reporting

Multinational entities (MNEs) that have a global consolidated turnover exceeding €750 million would be required to prepare and submit a CbC report. 

The ultimate parent company of a group would be responsible for filing the CbC report with the tax authorities. However, when the ultimate parent company is a resident of a country that does not require CbC reporting, or if the Finnish tax administration is not able to receive the information through its information exchange network, the Finnish subsidiary then would be responsible for submitting the information to the Finnish tax administration. A failure to comply with the CbC reporting rules would be subject to a penalty, the maximum amount of €25,000.

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