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Finland | Interest Deduction Limitation Rules

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Earlier this year, the Finnish Ministry of Finance issued a draft bill to introduce interest deduction limitation rules in Finland, pursuant to which the deductibility of interest expenses on related-party loans would be limited to a maximum of 30% of EBITDA or EUR 500'000, while any non-deductible interest could be carried forward to future tax years.

The Ministry has recently published a new version of the draft bill, with certain amendments as regards, inter alia, the effective date and the scope of application of the proposed legislation.

Pursuant to the amended draft bill, in collateral arrangements, the scope of application would be limited to certain back-to-back loans. As a comparison, the new scope of application would rule out, for instance, share pledges as well as floating and fixed charges. Also cash pooling arrangements would generally fall outside the scope of the newly proposed provisions. Further, financial, insurance and pension institutes as well as for instance real estate investment business would be excluded from the proposed regime. Pursuant to the amended proposition, the restrictions would enter into force on 1 January 2014 (as opposed to the previously suggested beginning of 2013).

For further information, please contact Mr. Niklas Thibblin at This e-mail address is being protected from spambots. You need JavaScript enabled to view it , Mr. Jouni Kautto at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or Ms. Maria Pajuniemi at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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