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Finland: Changes to the exit tax on exchange of shares


Amendments to the regulations concerning the taxation of share exchanges have been proposed in a recent government bill.

The amendments are expected to be applicable for the first time in the assessment of tax year 2012. Due to the extension of the time limit, the amendments would be applicable to share exchange arrangements which have taken place after January 1 2009. Under Finnish law a tax neutral exchange of shares is at stake when a limited liability company acquires shares in another limited liability company to give it the majority of the voting rights, or when a company which already has a sufficient number of shares acquires more shares. The acquiring company should issue new or already existing shares in exchange for the acquired shares. In case money is used as consideration, the proportion of payment in money should not exceed 10% of the nominal value of the shares used as consideration.

Finnish tax law includes an exit tax provision according to which the tax neutrality is forfeited if the shareholder moves abroad from Finland within three years after the end of the year of the share exchange. In case of this exit tax, the taxable profit is counted as the difference between the acquisition cost of the original shares and the value of the shares received in exchange.

According to the proposed regulations, the exit tax is triggered when the shareholder moves outside of the EEA or forwards the shares after moving to another EEA country within five years after the end of the year of the share exchange. This means that the exit tax is applicable in fewer cases since moving within the EEA does not trigger the taxation, but on the other hand the time limit has been extended from three years to five years.

Janne Juusela (

Borenius – Taxand

Tel: +358 9 615 333


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