Copying and distributing are prohibited without permission of the publisher

Finland softens interest deduction restriction

09 October 2012

Matthew Gilleard - ITR

Earlier this year, the Finnish government announced its intention to introduce an interest deduction limitation for companies. The EBITDA-based interest deduction limitation proposal was met with opposition from various lobbyists, and the proposals have subsequently been amended.

The new rules should be applicable from the beginning of tax year 2014.

Before the April 12 draft proposal to limit the deductibility of interest paid by corporations or partnerships, Finland was quite liberal in the interest deductibility area, with an absence of thin capitalisation rules, for example.

The April draft proposed that net interest costs would be tax deductible only up to the larger of €500,000 ($646,800) or 30% of the EBITDA of the company. However, interest paid to non-dependent parties would be deductible.

"A back-to-back loan or collateral given by a dependent party to a non-dependent lender would taint the interest paid to such lender for the purposes of the restrictions and thus make it non-deductible," said Antti Lehtimaja, head of tax at Krogerus. "The restrictions were meant to...



This article is locked content, available to current subscribers or trialists.

  • Current subscribers or trialists - Please log in to view this article in full.
  • New users - Please take a free 7 day trial.
  • Expired subscribers or trialists - Please subscribe to gain immediate full access.

If you think you've received this message in error, please contact your account manager, Nick Burroughs:
Email: nburroughs@euromoneyplc.com, Tel: +44 (0)207 779 8379

Subscribe now

Subscribe today to gain full access to International Tax Review.

Subscribe

Free trial

Take a free trial now and gain 7 days of full access to International Tax Review.

Free trial





International Tax Review Profile

RT @StefLvc: EU reform --> of the ^^ Statutory Audit Market ^^ will be effective beginning 17 June 2016 with the Exception of Mandatory Fir…

Oct 24 2014 11:44 ·  reply ·  retweet ·  favourite
International Tax Review Profile

Welcome to our new followers @FrankCallanJr @vatlive @BDO_USA_Tax @MattisVGansbeke @LaghmouchiLaw @burrelle9621 @Feed_Lex

Oct 24 2014 11:09 ·  reply ·  retweet ·  favourite
International Tax Review Profile

RT @FinanceCanada: .@joeoliver1 tables second #EAP14 bill to support Jobs & Growth and return to balanced budgets in 2015 http://t.co/xhlxt

Oct 24 2014 08:42 ·  reply ·  retweet ·  favourite
International Tax Review Profile

.@FriedFrankTech announces double hire of Roman and Thornton http://t.co/Yhi3pN3DQ2

Oct 22 2014 01:37 ·  reply ·  retweet ·  favourite
International Tax Review Profile

RT @TPWeek: Registered for #AsiaTP2014 yet? Sign up here: http://t.co/AXdO49OKjJ #transferpricing #tax @IntlTaxReview

Oct 22 2014 01:18 ·  reply ·  retweet ·  favourite
International Correspondents

After the Irish budget, what would make you more likely to put more substance into Ireland?