Finland has introduced a new amendment to the Tax Assessment Procedure Act which entered into force on 1 January 2022. The new amendment widens the scope of the Finnish transfer pricing adjustment provision by enabling the Finnish tax authorities to:
- Disregard or recharacterize intra-group transactions agreed by the parties under certain circumstances, and
- Apply the OECD Transfer Pricing Guidelines in full in proportion to transfer pricing adjustments in Finland.
Action item: Taxpayers should take steps to prepare high-quality transfer pricing documentation, detailed functional analysis, and focus on in-depth comparability analysis so that adequate proof of the transfer pricing method and pricing chosen exists to lessen the likelihood of transfer pricing adjustments initiated by the Finnish Tax Administration.