Finland: Speeding Up The Taxation Procedure And Other Changes Relating To Advance Ruling And Tax Loss Application Procedures

Amendments to the regulations concerning the system of appeal in taxation cases have been proposed in the recent government bills 74/2012 and 76/2012. Further, preliminary rulings with regard to income taxation would become appealable and the scope of leave to appeal extended. The amendments are scheduled to become effective in 2014. 

Claim for adjustment against the preliminary rulings of the Board of Adjustment

According to the proposal it should become possible to claim for adjustment directly to the Supreme Administrative Court (SAC) against the Board of Adjustment's preliminary rulings on income tax, real estate tax and estate & gift taxation, instead of to the Administrative Court as nowadays. Such an amendment will speed up establishing case law on the interpretation of the law. Notable is that the government stresses the fact that the claims for adjustment against the preliminary ruling should be looked upon as an exception and used only to establish a point of law.

The current system of appeal can be deviated from under special circumstances. The SAC may grant an application for leave to appeal on the grounds that the case would establish a precedent. Either party in the taxation process has the right to claim for adjustment within 60 days from receiving of the ruling. The process requires a written consent from the counterparty, a so called license application. If the counterparty does not agree to the process, the case would be directed towards the Administrative Court. In accordance with the current process, the counterparty in the proposed process would always be the Tax Recipient's Legal Services Unit.

Appealable preliminary rulings

The present procedure of preliminary rulings with regard to income taxation would be replaced by the possibility to claim for adjustment against preliminary rulings and consequently the rul-ings would become appealable in the same way as other preliminary rulings passed by the Tax Administration. Thus the three step system of appeal now in force can be applied to preliminary rulings with regard to income taxation and tried before the SAC as a last instance.

Tax loss procedure in the SAC

Accordingly to the proposal the SAC would not automatically hear e.g. the appeals relating to the tax loss applications. The effect of this is that leave to appeal must be separately applied for and received from the SAC, before any procedure in the SAC.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.