A company can apply for a preliminary ruling in transfer pricing matters

This guidance will be updated.

A company can apply for a preliminary ruling for a specified transfer pricing matter by submitting a written application to the Finnish Tax Administration. The decisive preliminary ruling is binding on the Finnish Tax Administration if the company demands it to be applied in tax assessment. However, the preliminary ruling is not binding on tax authorities in other countries.

Before applying for a preliminary ruling

In order to receive the maximum benefit from the preliminary ruling procedure in its transfer pricing matter, the company should consider the following questions before submitting the application:

• Is the risk related to the transfer pricing so substantial that the company should apply for a preliminary ruling? Or is the matter in question of simpler nature so that it could be resolved without a formal procedure?
• If the matter is complicated yet also urgent, is the preliminary ruling procedure a suitable tool, considering the possibility of lengthy processing?
• Is the company prepared to describe the matter in a detailed and open manner so that a preliminary ruling can be issued?

The Finnish Tax Administration will provide guidance and advice in selecting the most suitable procedure. When a company considers whether to apply for a preliminary ruling in a transfer pricing matter, its representatives may discuss issues such as the most suitable procedure, prerequisites for a preliminary ruling and the information to be included in the application in a preparatory meeting with the representatives of the Finnish Tax Administration.

Required content of the application

The company must include in its application the information required for resolving the matter. The application should include at least the following:

• functional analysis
• details of applying the proposed transfer pricing method
• essential financial information
• agreements concerning the transaction in question.

The Finnish Tax Administration may request additional information from the company. The company may also provide additional information during the processing of the application spontaneously.

Meetings may be arranged during the processing of the application

As part of the preliminary ruling procedure concerning a transfer pricing matter, there may be informal discussions on the tax risks involved and different options for finishing off the process. During the processing of an application for a preliminary ruling in transfer pricing matter, there are often arranged meetings with the representatives of the company in question for clarifying the matter. The views and evidence presented at the meetings are documented in writing in order to be considered when the preliminary ruling is being issued.

More information on the preliminary ruling procedure

The transfer pricing unit of the Finnish Tax Administration handles all applications for preliminary rulings on transfer pricing matters as urgent. Despite the urgent processing, the complexity of the matters involved in the preliminary rulings may result in rather lengthy processing times.