On December 21, 2015, the Finnish Ministry of Finance released for public comment a draft bill (the ‘proposal’) to revise the transfer pricing documentation rules and introduce country-by-country (CbC) reporting. The proposal includes CbC, master file and local file requirements, and penalty provisions. The contents of the proposal follow the OECD BEPS final 2015 report for Action 13.
Multinational enterprises (MNEs) whose global consolidated turnover exceeds €750 million would be obligated to prepare and submit a CbC report. The ultimate parent company of a group would be responsible for filing the CbC report with the tax authorities. However, in cases where the ultimate parent company is a resident of a country which does not require the preparation of a CbC report or the Finnish Tax Administration is not able to receive the information through its information exchange network, the Finnish subsidiary would be liable for submitting the information to the Finnish Tax Administration.
CbC Report Information. Specifically, the CbC reporting would contain the following country-specific information:
- Profit before taxes;
- Paid and accrued income taxes, including withholding taxes;
- Retained earnings;
- Number of employees; and
- Tangible fixed assets, other than cash and comparable property.
Penalties. Any company that fails to file the CbC report would be subject to a maximum penalty of €25,000.
The Ministry of Finance has requested comments on the proposal by January 25, 2016. The government intends for the provisions to be enacted at the beginning of 2017.