Arrangements subject to the reporting obligation

No, you do not. If the first stage of the arrangement was realised prior to 25 June 2018, more recent actions included in the same arrangement need not be reported.

New actions must be reported, however, if they independently meet any of the characteristics of an arrangement to be reported when assessed separately from the previous actions.

Yes, you do, provided that the country is on the blacklist during the validity of the arrangement.

Payments between associated companies to blacklisted countries are reportable arrangements. Recurring payments need not be reported several times, however: all payments made with the same basis in the same country may be reported at once. The description of the arrangement must include the basis for the payments and the fact that the payments are recurring.

A separate report for a single payment must be submitted if the basis for the payment or the circumstances experience a material change as the result of which the payment can be considered a new arrangement.

Ordinary products of financial institutions include, for instance:

• Mortgages
• Investment products based on legislation, such as investment policies, funds, equity savings accounts and equity investments
• Pension policies compliant with legislation, such as statutory and voluntary pension products
• Life and non-life insurance products based on legislation

As a general rule, you do not.

Arrangements that are related to the avoidance or evasion of the reporting obligation concerning financial account information must be reported on the basis of the characteristic of automatic exchange of information.

• If a payment removes the assets from the payer’s possession, which is the case when paying an invoice, for example, the assets are not considered the payer’s assets that must be reported as financial account information.
• However, if it is a payment to transfer the assets to be invested in an investment fund, for example, the assets still remain in the payer’s possession. In such a case, it constitutes a reportable arrangement if the assets are transferred to outside the reporting of financial account information.

No, it is not. A Finnish limited partnership is an independent legal person that is a taxpayer based on the Income Tax Act (Tuloverolaki 1535/1992) and that is considered a person resident in Finland in terms of the tax treaties of Finland. Finland is the tax domicile of such a limited partnership. Hence, if the payment recipient is a Finnish limited partnership, the recipient has a tax domicile and the prerequisites for a reportable arrangement are not met on this basis alone.

Yes, it is. On the basis of the description, general transfer pricing regulations are not applied to the arrangement; instead, unilateral transfer pricing regulations of the states or jurisdictions (“safe harbour” rules) are used.

If the companies can prove that the pricing of the products is market-based as described in the OECD Transfer Pricing Guidelines, the arrangement need not be reported. However, a mere possibility or assumption does not eliminate the reporting obligation. The fact that the pricing may be market-based also from the perspective of the OECD Transfer Pricing Guidelines does not suffice.

Reporting is not necessary in the following case, for example:

A group company located abroad plans to assign its unique and valuable intangible assets to its parent company located in Finland. The foreign company was acquired to the group through a corporate acquisition a while back, and the company has been operating independently since the acquisition. The company is well-established and operates in a stable industry. The market-based price of the intangible assets is determined by applying regular cash flow based value determination methods. Cash flow forecasts are prepared for the assignment date based on management forecasts. The forecasts can be deemed reliable when considering the industry. The discount rate is diligently determined, and it is also based on reference materials. The determination of the discount rate does not involve any especially uncertain assumptions.

Even though the example involves unique and valuable intangible assets – for which there are no reliable comparison values – the price can be reliably determined using value determination methods. As the cash flow forecasts and other assumptions used in the value determination are not especially uncertain, it is not, as a rule, a question of intangible assets that are difficult to value.

Yes, it is. The prerequisite for reporting in the case of a cross-border assignment of operations or risk, or a cross-border transfer of assets within a group is meeting of the “EBIT test”, i.e. the EBIT of the assigning unit being less than 50% of what it would have been without the transfer or assignment for the next three years.

In the described case, the branch office assigns intangible assets cross the border to the Finnish company. When the branch office is closed, it is likely that the EBIT test or the reporting requirement will also be met. In such a case, the arrangement must be reported even if the value of the assigned intangible assets (such as agreements, customer relationships and lists of customers) is low.