Shareholder loans not subject to transfer tax in Finland

As from 2013 shareholder loans assumed by the buyer as a part of a share acquisition have been included in the tax base for the local transfer tax. The Supreme Administrative Court has in a recent ruling changed the interpretation such that shareholder loans are excluded from the said tax base, the reasoning being that the previous interpretation is not supported by the wording of the legislation.

As a consequence, a buyer who in connection with a share acquisition has acquired shareholder loans from the seller, is entitled to reclaim the transfer tax paid on such shareholder loan. The amount of tax is either 1.6% for business conducting companies or 2.0% for real estate companies. Subject to reclaims are transfer taxes paid on transactions completed in year 2014 or later.

For more information, please contact Sebastian Kellas.