Finland: Tax Treatment of Final Tax Losses in breach of EU Law
On 14 May 2020, the European Commission called on Finland to bring its rules on the tax deductibility of cross-border group contributions in line with EU law.
On 14 May 2020, the European Commission called on Finland to bring its rules on the tax deductibility of cross-border group contributions in line with EU law. Furthermore, on 15 May 2020, the Finnish Supreme Administrative Court (“SAC”) issued a precedent (KHO 2020:51) concerning the utilisation of a foreign subsidiary’s tax losses after a cross-border merger and especially the definition of final tax losses.
Although the two cases relate to different tax-related questions, namely cross-border group contributions and cross-border mergers, the underlying phenomenon is the same – Finnish tax legislation concerning the cross-border balancing of profits may be in breach of the freedom of establishment.
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