Documentation in Finland

Santeri Kããriãinen and Tanja Lappalainen, Revico Grant Thornton Oy, Helsinki

Transfer pricing refers to the pricing of transactions between associated companies, that is, in general it applies to transactions between group companies. The international basis for transfer pricing is the arm’s length principle. According to the principle, the same terms have to be applied in transactions between associated companies as would be applied in transactions between independent companies. If the terms deviate from the arm’s length principle, the taxable income can be adjusted according to the applied transfer pricing. The purpose of the transfer pricing documentation is to prove that the transactions between associated companies have been made in accordance with the arm’s length principle.

l. Relevant tax laws and official guidelines

Regulations regarding transfer pricing documentation requirements entered into force in Finland in January, 2007.1 In addition to legislative rules, the Finnish Tax Administration provided an Official Guideline (Transfer Pricing documentation requirements, October 19, 2007) concerning how to establish, implement and document company’s transfer pricing policies….

Disclaimer

1 Relevant legislative rules are in §14 a-c, §31, §32, §75 and §89 of the Finnish Fiscal Assessment Act.

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