GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE OF INFORMATION FOR TAX PURPOSES

GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE OF INFORMATION FOR TAX PURPOSES
Peer Review Report Combined: Phase 1 + Phase 2, incorporating Phase 2 ratings

FINLAND
Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews: Finland 2013
COMBINED: PHASE 1 + PHASE 2, INCORPORATING PHASE 2 RATINGS
November 2013 (reflecting the legal and regulatory framework as at December 2012)
This work is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the OECD or of the governments of its member countries or those of the Global Forum on Transparency and Exchange of Information for Tax Purposes. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.
Please cite this publication as: OECD (2013), Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews: Finland 2013: Combined: Phase 1 + Phase 2, incorporating Phase 2 ratings, OECD Publishing. http://dx.doi.org/10.1787/9789264205604-en
ISBN 978-92-64-20559-8 (print) ISBN 978-92-64-20560-4 (PDF)
Series: Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews ISSN 2219-4681 (print) ISSN 2219-469X (online)
Corrigenda to OECD publications may be found on line at: www.oecd.org/publishing/corrigenda.
OECD 2013
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TABLE OF CONTENTS 3
Table of Contents
About the Global Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 Information and methodology used for the peer review of Finland. . . . . . . . . . . .11 Overview of Finland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Compliance with the Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 A. Availability of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A.1. Ownership and identity information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A.2. Accounting records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A.3. Banking information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 21 40 46
B. Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 B.1. Competent Authoritys ability to obtain and provide information . . . . . . . . 52 B.2. Notification requirements and rights and safeguards. . . . . . . . . . . . . . . . . . 61 C. Exchanging Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C.1. Exchange-of-information mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C.2. Exchange-of-information mechanisms with all relevant partners . . . . . . . . C.3. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C.4. Rights and safeguards of taxpayers and third parties. . . . . . . . . . . . . . . . . . C.5. Timeliness of responses to requests for information . . . . . . . . . . . . . . . . . . 63 65 72 74 76 77
Summary of Determinations and Factors Underlying Recommendations. . . . 83
PEER REVIEW REPORT COMBINED PHASE 1 AND PHASE 2 REPORT FINLAND OECD 2013
4 TABLE OF CONTENTS Annex 1: Jurisdictions Response to the Review Report . . . . . . . . . . . . . . . . . . 87 Annex 2: List of All Exchange of Information Mechanisms . . . . . . . . . . . . . . . 88 Annex 3: List of All Laws, Regulations and Other Relevant Material . . . . . . . 96 Annex 4: People Interviewed During On-Site Visit . . . . . . . . . . . . . . . . . . . . . . 98
ABOUT THE GLOBAL FORUM 5
About the Global Forum

The Global Forum on Transparency and Exchange of Information for Tax Purposes is the multilateral framework within which work in the area of tax transparency and exchange of information is carried out by over 120 jurisdictions, which participate in the Global Forum on an equal footing. The Global Forum is charged with in-depth monitoring and peer review of the implementation of the international standards of transparency and exchange of information for tax purposes. These standards are primarily reflected in the 2002 OECD Model Agreement on Exchange of Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax Convention on Income and on Capital and its commentary as updated in 2004, which has been incorporated in the UN Model Tax Convention. The standards provide for international exchange on request of foreseeably relevant information for the administration or enforcement of the domestic tax laws of a requesting party. Fishing expeditions are not authorised but all foreseeably relevant information must be provided, including bank information and information held by fiduciaries, regardless of the existence of a domestic tax interest or the application of a dual criminality standard. All members of the Global Forum, as well as jurisdictions identified by the Global Forum as relevant to its work, are being reviewed. This process is undertaken in two phases. Phase 1 reviews assess the quality of a jurisdictions legal and regulatory framework for the exchange of information, while Phase 2 reviews look at the practical implementation of that framework. Some Global Forum members are undergoing combined Phase 1 and Phase 2 reviews. The Global Forum has also put in place a process for supplementary reports to follow-up on recommendations, as well as for the ongoing monitoring of jurisdictions following the conclusion of a review. The ultimate goal is to help jurisdictions to effectively implement the international standards of transparency and exchange of information for tax purposes. All review reports are published once approved by the Global Forum and they thus represent agreed Global Forum reports. For more information on the work of the Global Forum on Transparency and Exchange of Information for Tax Purposes, and for copies of the published review reports, please refer to www. oecd.org/tax/transparency and www.eoi-tax.org.
EXECUTIVE SUMMARY 7
Executive Summary
1. This report summarises the legal and regulatory framework for transparency and exchange of information in Finland as well as the practical implementation of that framework. The international standard, which is set out in the Global Forums Terms of Reference to Monitor and Review Progress Towards Transparency and Exchange of Information, is concerned with the availability of relevant information within a jurisdiction, the competent authoritys ability to gain timely access to that information, and whether that information can be effectively exchanged with the jurisdictions exchange of information partners. 2. Finland is a Nordic country situated in the Fennoscandian region of Northern Europe with approximately 5.4 million inhabitants. Finlands economy is primarily based on the service, manufacturing and refinery sectors. Finland has a comprehensive income tax system for natural and legal persons and has been concluding double taxation conventions (DTCs) allowing for the international exchange of information since the late 1960s. 3. Finlands legal and regulatory framework for the maintenance of ownership information ensures that such information is available with respect to relevant entities and arrangements. In practice, to reply to most requests concerning ownership information, the Finnish competent authority can simply access its databases, where relevant information collected from taxpayers and third parties is stored. The quality of the framework is recognised by Finlands peers who confirmed that Finland has an excellent track record in delivering ownership information whenever requested. Finland prohibited the issuance of bearer shares since 1 January 1980, and there are mechanisms in place to identify the holder of bearer shares issued prior to that date that might still be in circulation in Finland. 4. Relevant legal entities and arrangements are required to keep full accounting records and underlying documentations for a period of 10 years and 6 years, respectively. 5. In Finland, the Ministry of Finance is the designated competent authority for DTCs and Tax Information Exchange Agreements (TIEAs), the Multilateral
8 EXECUTIVE SUMMARY
Convention on Mutual Administrative Assistance in Tax Matters (Multilateral Convention) and certain EU legislation. The Ministry has delegated its competent authority to the tax authority in most cases. The competent authority has access to information held in its own databases as well as the databases maintained jointly with the National Board of Patents and Registration of Finland (NBPRF). The competent authority also has broad powers to obtain bank, ownership, identity, and accounting information and measures are in place to compel the production of such information. The application of rights and safeguards in Finland does not restrict the scope of information that the tax authority can obtain. Inputs received from Finlands peers suggest that Finland has not encountered any difficulties accessing information to respond to an EOI request. 6. Finland has a longstanding involvement in international exchange of information in tax matters. Currently, Finland is able to exchange information in tax matters through a broad network of EOI arrangements covering 119 jurisdictions. Out of these 119 jurisdictions, 71 of those are DTCs and 39 are TIEAs. The remaining nine jurisdictions are parties only to the Multilateral Convention and/or the Nordic Mutual Assistance Convention on Mutual Administrative Assistance in Tax Matters. Out of the 110 DTCs and TIEAs, 95 are currently in force. Finland was one of the first countries to sign and ratify the Multilateral Convention and the 2010 protocol. The 2010 protocol was ratified and is in force since 1 June 2011. A domestic tax interest requirement does not exist in Finland and there are no restrictions in the Finnish legislation as regards the competent authoritys access to information held by banks. Finlands EOI arrangements cover all its relevant partners including major trading partners as well as the EU and the OECD member jurisdictions. 7. Regarding the effectiveness of exchange of information, Finlands competent authority has more than adequate resources to exchange information effectively. There is sufficient professional staff with clear responsibility for processing requests and retrieving and obtaining the requested information. The staff members also possess the required expertise and have undergone training specific to international exchange of information. Inputs received from Finlands peers suggest that Finlands practices in terms of exchange of information are of a very high standard and they consider Finland to be a reliable, efficient and cooperative exchange of information partner. Out of 220 incoming requests on direct taxation matters received from 2009 to 2011, Finland managed to answer 93.2% of the cases within 90 days and 4.6% of the cases within 180 days. No cases took more than one year for Finland to furnish a reply.
EXECUTIVE SUMMARY 9
8. Finland has been assigned a rating 1 for each of the 10 essential elements as well as an overall rating. The ratings for the essential elements are based on the analysis in the text of the report, taking into account the Phase 1 determinations and any recommendations made in respect of Finlands legal and regulatory framework and the effectiveness of its exchange of information in practice. On this basis, Finland has been assigned a rating of Compliant for each essential element. In view of the ratings for each of the essential elements taken in their entirety, the overall rating for Finland is Compliant. 9. A follow up report on the steps undertaken by Finland to answer the recommendation made in this report should be provided to the PRG within twelve months after the adoption of this report.
1.
This report reflects the legal and regulatory framework as at the date indicated on page 1 of this publication. Any material changes to the circumstances affecting the ratings may be included in Annex 1 to this report.
INTRODUCTION 11
Introduction
Information and methodology used for the peer review of Finland

10. The assessment of the legal and regulatory framework of Finland and the practical implementation and effectiveness of this framework was based on the international standard for transparency and exchange of information as described in the Global Forums Terms of Reference to Monitor and Review Progress Towards Transparency and Exchange of Information, and was prepared using the Global Forums Methodology for Peer Reviews and NonMember Reviews. The assessment was based on the laws, regulations, and exchange of information mechanisms in force or effect as at December 2012, Finlands responses to the Phase 1 and Phase 2 questionnaires, other information, explanations and materials supplied by Finland during the on-site visit that took place in Helsinki on 14 to 16 August 2012, and information supplied by partner jurisdictions. During the on-site visit, the assessment team met with officials and representatives of the relevant Finland government agencies including the Ministry of Finance, the Financial Supervisory Authority, the National Board of Patents and Registration of Finland, the Finnish Tax Administration and the Uusimma Tax Auditing Unit (see Annex 4). 11. The Terms of Reference break down the standards of transparency and exchange of information into 10 essential elements and 31 enumerated aspects under three broad categories: (A) availability of information; (B) access to information; and (C) exchanging information. This review assesses Finlands legal and regulatory framework and the implementation and effectiveness of this framework against these elements and each of the enumerated aspects. In respect of each essential element a determination is made regarding Finlands legal and regulatory framework that either: (i) the element is in place, (ii) the element is in place but certain aspects of the legal implementation of the element need improvement, or (iii) the element is not in place. These determinations are accompanied by recommendations for improvement where relevant. In addition, to reflect the Phase 2 component, recommendations are made concerning Finlands practical application of each of the essential elements and a rating of either: (i) compliant, (ii) largely
12 INTRODUCTION
compliant, (iii) partially compliant, or (iv) non-compliant is assigned to each element. An overall rating is also assigned to reflect Finlands overall level of compliance with the standards. 12. The assessment was conducted by a team which consisted of two assessors and two representatives of the Global Forum Secretariat: Mr. Frederick Strauss, Deputy Tax Attach, Internal Revenue Service of the United States; Mr. Bulent Citci, Senior Tax Inspector, Tax Inspection Board of Turkey; Mr. Robin Ng and Ms. Renata Teixeira from the Global Forum Secretariat. 13. The ratings assigned in this report were adopted by the Global Forum in November 2013 as part of a comparative exercise designed to ensure the consistency of the results. An expert team of assessors was selected to propose ratings for a representative subset of 50 jurisdictions. Consequently, the assessment teams that carried out the Phase 1 and Phase 2 reviews were not involved in the assignment of ratings. These ratings have been compared with the ratings assigned to other jurisdictions for each of the essential elements to ensure a consistent and comprehensive approach. The assignment of ratings was also conducted at a different time from those reviews, and the circumstances may have changed in the meantime. Readers should consult Annex 1 for information on changes that have occurred.
Overview of Finland
14. Finland is a Nordic country situated in the Fennoscandian region of Northern Europe with an area of 338 424 square kilometres. It has borders with Sweden to the west, Norway to the north, the Russia Federation to the east and Estonia to the south across the Gulf of Finland. Finland is the most heavily forested country in Europe covering approximately 86% of the countrys total area. There are also 187 888 lakes and 179 584 islands in Finland. Finland has a population of approximately 5.4 million inhabitants and 15. an average population density of 16 inhabitants per square kilometre. Finnish and Swedish are the official languages of Finland. 16. Finland has a highly industrialised mixed economy with a per capita output matching those of France, Germany, United Kingdom and Belgium. Gross Domestic Product (GDP) in 2011 was EUR 171 billion with 66% of its GDP generated by the service sector and 31% by the manufacturing and refinery sectors. Finland adopted the EURO currency on 1 January 2002.
INTRODUCTION 13
17. Finlands main trading partners are Russia, Germany, Sweden, China, Netherlands, the United States and the United Kingdom. 2 Main investors in Finland in recent years have been Sweden, the United States, Spain the United Kingdom and Denmark. 3 18. Finland is one of the founding members of the Organisation for Security and Co-operation in Europe (OSCE) and the World Trade Organisation (WTO), and a member of the International Monetary Fund (IMF) and the World Bank (since 1948), the United Nations (1955), the Organisation for Economic Co-operation and Development (1969) and the Council of Europe (1989). Finland acceded to the European Union (EU) on 1 January 1995 and was one of the 12 original EU countries of the euro zone. As an OECD country, Finland has been a member of the Global Forum on Transparency and Exchange of Information for Tax Purposes since its creation.
General information on legal system and the taxation system Legal system
19. Finland has a Nordic civil law legal system. Laws are codified as Acts of Parliament, but customary laws are also recognised. Major sources of law are the 1999 Constitution, Acts, Regulations, precedents, government bills and customary law. International treaties on tax matters are brought into force by Acts in Finland (s. 95, Constitution). In cases of inconsistencies between domestic law and international treaties, international treaties take precedence. Moreover, Finland is a signatory of the Vienna Convention on the Law of Treaties. 20. Finland has a mixed presidential/parliamentary system with executive powers divided between the President and the Prime Minister. The President directs national security and foreign affairs policies while the Prime Minister has primary responsibility for all other areas, including European Union (EU) issues. The President is elected for a term of six years and may remain in office for a maximum of two consecutive terms. The supreme decision-making authority in Finland is vested with the Parliament that approves the state budget, enacts legislation and raties international treaties. The 200 Members of Parliament are elected once every four years. The court system for civil and criminal jurisdiction consists of District 21. Courts (krjoikeus), Courts of Appeal (hovioikeus), and the Supreme Court (korkein oikeus). The administrative branch of justice consists of
2. 3. Statistics Finland (www.stat.fi/tup/suoluk/suoluk_kotimaankauppa_en.html# foreigntrade). Invest in Finland (www.investinfinland.fi/).
14 INTRODUCTION
Administrative Courts (hallinto-oikeus) and the Supreme Administrative Court (korkein hallinto-oikeus). In addition to the regular courts, there are also some special courts in certain branches of administration. For instance, there is a High Court of Impeachment (valtakunnanoikeus) for criminal charges against certain high-ranking officeholders and also the Market Court (markkinaoikeus), the Labour Court (tytuomioistuin), the Insurance Court (vakuutusoikeus) and the Prison Court (vankilaoikeus). The independence of the judiciary is enshrined in the Constitution.
Tax system
22. Under the Finnish Constitution, the right of taxation lies with the State (central government), the municipalities (communes) and the local communities of the Evangelical-Lutheran and Orthodox Churches. Income tax is levied under the Finnish Income Tax Act (TVL). Under 23. this Act, resident taxpayers are subject to tax on their worldwide income, while non-residents are taxed on income originating from Finland (ss. 9 and 10, TVL). An individual is deemed to be resident in Finland if he has his main place of abode in Finland or if he is continuously present in Finland for a period of more than six months. A presence is deemed continuous irrespective of temporary absence. Finnish nationals are considered a resident of Finland for three years after the end of the year in which he left the country, unless he shows that he has not maintained essential ties in Finland during the tax years concerned. However, under the terms of tax treaties, the three-year rule may be negated if the individual is deemed resident in another country. 24. An individual is taxed separately on earned income and income from investment. Earned income is subject to national income tax, municipal income tax and church tax. Earned income includes salaries, wages and benefits in kind. Taxes on wages and salaries paid by an employer are collected via a withholding tax mechanism. Investment income includes dividend income, capital gains, certain interest income and income from rental activities. As from 2006, all taxpayers (except legal persons) are within an assessment system where they are not required to file an income tax return on their own initiative. The tax authority sends pre-completed tax return to the taxpayer in the month of March or April of the year following the tax year. The precompleted tax return contains an estimated assessment based on information collected from various sources such as the employers, banks, pension funds, insurance companies and the stock exchange. The individual taxpayer must sign and return the pre-completed tax return by 8 or 15 May (as provided for on the form) only if he has corrections or amendments. Assessment of taxable income for a non-resident is determined under the same procedure as for residents. Individuals are subject to a progressive income rate for earned income and a flat rate for investment income. The taxation on earned income consists
INTRODUCTION 15
of the progressive state rate (6.5% to 29.75%), communal tax (between 15.5% and 21.5% or average of 19.25%), social security contribution (2%) and church tax (between 1% and 2.15%). The overall tax rate for earned income ranges from 0% to about 55%. Tax rate for investment income is 30% and 32% for capital gains exceeding EUR 50 000. 25. Basic tax regulations relating to corporations are contained in the Business Income Tax Law (EVL). The net business income of all taxpayers is determined in accordance with the Act. If the Business Income Tax Law does not contain a relevant provision dealing with the stream of income, then the TVL will be applied as it can be applied to both companies and individuals. Companies that are treated as corporate bodies are subject to corporate income tax at a flat rate. There is no local or municipal taxation on corporate taxpayers. Resident private companies (Oy), public companies (Oyj), co-operatives, European companies (SEs), branches and permanent establishments of foreign companies are subject to corporate income tax. General and limited partnerships and European economic interest groupings (EEIGs) are not recognised as separate taxpayers and their profits are taxed in the hands of the partners (ss. 4, 9 and 16a, TVL). The tax rate for corporations is 24.5% with effect from 1 January 2012. 26. The TVL does not contain provisions defining the meaning of residence with regard to corporate bodies but according to present practice, a corporate body is regarded as resident in Finland only if it is registered (incorporated) in Finland or otherwise established under Finnish Law. Generally, foreign companies are not considered resident of Finland even if they are effectively managed in Finland. Nevertheless, such presence may create a permanent establishment if the conditions in the domestic law and the relevant Double Taxation Conventions (DTCs) definitions are met. Resident companies are subject to tax on their worldwide income. Branches of non-resident companies are taxed on their Finnish-sourced income and on income attributable to the branch. 27. A company must file a tax return with the tax authority within 4 months from the end of each accounting year. A non-resident or a branch of a foreign company must also submit its tax return to the Corporate Tax Office of Uusimaa. However, if the assessment of the non-resident is under the purview of the Tax Office for Major Corporations, the tax return must be submitted to it. In addition, the tax return can be submitted to any tax office in Finland or a foreign embassy of Finland that will forward it to the Corporate Tax Office of Uusimaa or Tax Office for Major Corporations. In addition, assessments must be completed within 10 months from the end of the last month of the accounting year.
16 INTRODUCTION
International exchange of information for tax purposes

28. The negotiations of tax agreements, including any types of EOI arrangements are under the purview of the Ministry of Finance. Finland has an extensive network of EOI agreements. Of these agreements, 71 are DTCs and 39 are Tax Information Exchange Agreements (TIEAs). Finland is also a party to the multilateral Convention on Mutual Administrative Assistance in Tax Matters (Multilateral Convention) and the Nordic Mutual Assistance Convention on Mutual Administrative Assistance in Tax Matters (Nordic Convention). In 2009, 2010 and 2011, Finland received 220 requests for information on direct taxation matters from its EOI partners.
Overview of the financial sector and relevant professions

29. The financial sector in Finland has to comply with a number of EU regulations and directives. Most of the participants in the financial sector, such as the investors, banks, intermediaries, stock exchanges and central securities depositories (CSDs), must provide information to Finnish national authorities. The Financial Supervisory Authority (FIN-FSA) 4 is the supervisory authority for Finlands financial and insurance sectors. The supervised entities include banks 5, insurance and pension companies, investment firms, fund management companies and the Helsinki Stock Exchange. The activities subject to supervision include trade reporting, insider trading, public offers, investment services and banking services. The supervision of the stock exchange and the CSDs is divided between the Ministry of Finance and FINFSA. The Bank of Finland (acting as central bank) also plays a major role in oversight of the CSD. The financial sector supervisory authorities in the EU co-operate and 30. exchange information through three European Supervision Authorities the European Banking Authority, the European Securities and Markets Authority and the European Insurance and Occupational Pensions Authority.
Anti money laundering/combating financing of terrorism legislation

31. In Finland, responsibility for the development of anti-money laundering legislation is vested with the Ministry of the Interior while the FIN-FSA and other assigned national bodies are responsible for ensuring that the procedures, risk management and internal control of supervised entities meet the
4. 5. www.finanssivalvonta.fi/en/About_us/Pages/Default.aspx. There are 14 commercial banks, 211 member banks of the OP-Pohjola Group, 36 local co-operative banks, 33 saving banks and 16 branches of foreign banks authorised to accept deposits operating in Finland as at 31 December 2011.
INTRODUCTION 17
statutory requirements. The Finnish Financial Intelligence Unit (FIN-FIU) operating in cooperation with the National Bureau of Investigation deals with reports submitted to it on suspicious transactions. The Act on Preventing and Clearing Money Laundering and Terrorist 32. Financing (AML Law) transposing the requirements of the EUs third AntiMoney Laundering Directive and its complementary European Commission Directive became effective in Finland on 1 August 2008. The Act is further supplemented by Government Decrees 616/2008, 1204/2011, Ministry of the Interiors decision 156/2012 and Governments decision 1022/2010. Finland went through the FATF mutual evaluation in 2007, and the mutual evaluation report was adopted by the FATF plenary in June 2007. Since 2007, seven follow-up reports have been submitted with the latest one in October 2012.
Recent developments
33. The Finnish authority advised that it is currently in negotiations or planning negotiations with Albania, Botswana, Chile, Egypt, Jamaica, Panama, Oman, the United Arab Emirates, Kuwait, Peru, Qatar, Saudi Arabia, Tunisia, Turkmenistan, Uzbekistan and Russia for EOI agreements. They have also initialled the EOI agreement with Malaysia in November 2011 and with Hong Kong, China and Tajikistan in May and June 2012, respectively.
COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 19
Compliance with the Standards
A. Availability of Information
Overview
34. Effective exchange of information requires the availability of reliable information. In particular, it requires information on the identity of owners and other stakeholders as well as information on the transactions carried out by entities and other organisational structures. Such information may be kept for tax, regulatory, commercial or other reasons. If such information is not kept or the information is not maintained for a reasonable period, a jurisdictions competent authority 6 may not be able to obtain and provide it when requested. This section of the report describes and assesses Finlands legal and regulatory framework for availability of information. It also assesses the implementation and effectiveness of this framework. 35. Finnish law provides for the formation of a wide range of legal entities and arrangements. Private limited liability company is the most common form of legal entity in Finland. Comprehensive obligations are consistently imposed on companies and partnerships to ensure that ownership information is available in the hands of public authorities, the entity itself or custodians. The issuance of bearer shares has been forbidden in Finland since 1 January 1980 and there are mechanisms in place to identify the holder of bearer
6. The term competent authority means the person or government authority designated by a jurisdiction as being competent to exchange information pursuant to a double tax convention or tax information exchange agreement.
20 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

shares issued prior to that date. The obligations to keep ownership information under company law and tax laws are complemented by the anti-money laundering legislation. Enforcement provisions are in place to ensure the availability of ownership and identity information. 36. The concept of trusts that exists under common law does not exist under Finnish law. However, there are no obstacles for a Finnish person to act as trustee of a foreign trust. The Finnish tax authorities indicated that they are not aware of any instances where foreign trusts have been administered by Finnish persons. The combination of general record-keeping requirements under the tax law and the customer due diligence requirements under the AML Law appears to allow information on settlor(s) and beneficiaries of foreign trusts with a Finnish resident trustee to be made available to the Finnish authorities. 37. As far as accounting information is concerned, the Finnish Accounting Act requires all relevant entities and arrangements to keep accounting records and underlying documentations for a period of 10 years and 6 years, respectively. 38. Enforcement provisions are in place to ensure the availability of information in accordance with the international standards. 39. With regard to banking information, the Accounting Act and the AML Law require banks and other financial institutions to keep transaction records and conduct customer due diligence. Consequently, information of account holders, including all records pertaining to the account holder, bank accounts and transactions is available. 40. The Finnish tax authority possesses a very comprehensive database that contains extensive information on taxpayers. The database is updated frequently through periodical tax information provided by taxpayers and third parties (banks, employers, stock exchange etc.). Comments received from Finlands treaty partners indicate that ownership, accounting and banking information was available when requested.
A.1. Ownership and identity information

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities.
Companies (ToR 7 A.1.1) Types of companies

41. Companies in Finland are formed pursuant to the Limited Liability Companies Act 624/2006 (LLCA). A limited liability company can be formed by one or more persons. The liability of shareholders is limited to the subscribed capital. Under Chapter 1, Section 1(1) of the LLCA, a limited liability company may be a: Private Company (Oy): The shares of a private company cannot be admitted to public trading. The minimum share capital required of a private company is EUR 2 500. Public Company (Oyj): The minimum share capital required of a public company is EUR 80 000. The shares of a public company can be offered to the public and traded on stock markets.
42. Both private and public companies are subject to mandatory registration with the National Board of Patents and Registration of Finland (NBPRF) within 3 months from the date of signing the articles of association (Chapter 2, Section 8(1) of the LLCA). 43. In addition to the private and public company incorporated pursuant to the LLCA, there are also European Companies (SEs). SEs are regulated by Council Regulation (EEC) No. 2157/2001 on Statute for a European Company which was transposed into Finnish law under the Finnish European Companies Act, 742/2004. Pursuant to Section 10 of the Council Regulation, the rules that apply to SEs are the same as those applicable to public limited companies. In Finland, the requirements applicable to public companies apply mutatis mutandis to SEs. 44. As at 30 June 2012, there are 229 048 private companies, 204 public companies and 1 SE registered in the Trade Register in Finland.
7.
Terms of Reference to Monitor and Review Progress Towards Transparency and Exchange of Information.
Information held by government authorities Registration of companies

45. Under Chapter 2, Section 8(1) of the LLCA, both private and public companies are required to be registered in the Trade Register maintained by the NBPRF within 3 months from the date of signing the articles of association. The official names of the founding shareholders must be recorded in the articles of association and submitted to the NBPRF. While subsequent changes to the share ownerships do not need to be reported to the NBPRF, this information must be provided to the tax authority or be kept by the company or a custodian, as analysed below.
Information provided to the tax authority

46. Under Section 7 of the Act on Assessment Procedure 1558/1995 (AAP), all private and public companies are required to submit a tax return to the Finnish Tax Authority. Section 10 of the AAP provides that the Tax Authority will publish precise information detailing the information that must be provided in the tax return by each type of taxpayers. The tax return for companies must include among other particulars, information on the names, business IDs or personal identity codes and the number of shares held by each shareholder that owns at least 10% of all shares of the company (Form 6B and Form 72). The same information is also required to be provided in relation to every shareholder if the company has less than 10 shareholders. 47. All the information provided by the companies in the prescribed forms is captured and stored electronically in the database maintained by the tax authority. Information is maintained in the database for a period of 10 years. This period is counted from the year following the year of taxation (e.g. the taxation for year 2013 is finalised on 31 October 2014 and the information is stored in the database until 31 December 2024). 48. The transfer of securities (including shares of private companies) is an event subject to the transfer tax (section 1, Asset Transfer Tax Act). The transferee is required to file a prescribed form (Form 6012e) with the tax authority. The information provided in the form includes the name, personal or business ID number of the transferor and transferee and the interest transferred. The form must be filed and the transfer tax must be paid within two months from the date of transfer (section 21, Asset Transfer Tax Act). Securities that are publicly traded are generally exempt from the transfer tax if they fulfil the conditions for exemption in section 15a of the Asset Transfer Tax Act. Notwithstanding the above, information relating to the ownership of publicly traded shares is kept in the central securities depository (CSD) as indicated in the subsequent paragraphs.
Information held by the companies

49. Shares of companies may be issued either in book-entry form or in the form of share certificates. 50. There are currently 168 companies in Finland with shares issued in book-entry form, of which 134 are publicly traded. All publicly traded companies must maintain their shares in book-entry form. There are also other reasons for companies to maintain shares in the book-entry system. For instance, by having shares electronically registered in the book-entry system, the company will have access to up-to-date shareholder information and allows an efficient management of ownership changes and dividend distributions. 51. In Finland, shares issued in book-entry form are maintained in a computerised shareholder register kept by the central securities depository (CSD) (Chapter 4, Section 3 of the LLCA). Euroclear Finland is the CSD of Finland and holds the register for shares and debt securities traded in the Finnish financial markets. Pursuant to the LLCA, the shareholder register maintained by the CSD must contain the name of the shareholder (or the nominee, in case of nominee ownership), the shareholders (or nominees) personal identity code, contact details, payment address, taxation information, the quantity of shares by share class and the account operator maintaining the book-entry account. An account operator is defined under Chapter 1, Section 2b of the Act on Book-Entry System to mean an organisation that has been granted the right to make registration in the book-entry register. In the case of a transfer of shares, the transferee is required to inform the account operator to update the shareholder register. The LLCA does not specify a time frame for which the transfer of shares has to be updated in the shareholder register but under Chapter 4, Section 2(1) of the LLCA, the transferee cannot exercise his shareholder rights in the company until his name is entered into the share register. 52. Most companies in Finland issue shares in certificate form. In relation to those companies, the board of directors of the company is required to keep a Share Register under Chapter 3, Section 15(1) of the LLCA. The register must contain a list of the shares or the share certificates in numerical order, their dates of issue and the names and addresses of the shareholders. If there is a transfer of shares, the transferee of the share is required to provide the company with evidence of the transfer as well as evidence of the payment of the transfer tax. The company must verify the evidence of the transfer as well as the payment of the transfer tax and update the Share Register immediately (Chapter 3, Section 16(1) of the LLCA). The LLCA does not specify a time frame for which the transferee has to inform the company of the transfer of shares. Nevertheless, under Chapter 3, Section 2(1) of the LLCA, the transferee cannot exercise his shareholder rights in the company until his name is entered into the share register.
Foreign companies
53. The Finnish Income Tax Act does not contain provisions defining residence with regard to corporate bodies but according to present practice, a corporate body is regarded as resident in Finland only if it is registered (incorporated) in Finland or otherwise established under Finnish Law. Generally, a foreign company is not considered resident of Finland even if it is effectively managed from Finland. Nevertheless, such presence may create a permanent establishment (e.g. a branch) if the conditions under the domestic law and the relevant treaty are met. There are 1 104 branches of foreign companies registered in the Trade Register as at 30 June 2012.
Registration of branch of a foreign company

54. A foreign company is required to submit a Start-up Notification concerning the establishment of a branch to the Trade Register before commencing business operation in Finland. If the company is from a country outside the EEA, a permit issued by the NBPRF for the establishment of the branch is also required. However, no ownership information of the company is provided to the NBPRF in the Start-up Notification or in relation to applying the permit.

55. A branch is required to file a tax return and disclose ownership information pursuant to the same rules concerning ownership information that has to be filed for Finnish private and public company (ss. 7 and 10, AAP). More specifically, the tax return for branches of foreign companies must include among other particulars, information on the name, business ID or personal identity code and the number of shares held by each shareholder that owns at least 10% of all shares of the company. The same information is also required for each shareholder if the company has less than 10 shareholders. The sanctions for non-compliance for private and public companies are equally applicable to a branch of a foreign company. 56. Similarly, all the information provided by the branches of foreign companies in the prescribed forms is data-captured and stored electronically in the database maintained by the tax authority.
Nominees
57. The concept of nominee ownership exists in Finland in relation to shares in book-entry form.
58. Shares issued in certificate form are deemed by the Finnish authorities to be owned by the person whose name is recorded in the share register maintained by the company. In this regard, all the benefits and consequences of owning the shares will apply to the persons reflected as the owner of the share in the share register. Therefore, nominee ownership is not recognised in respect of shares in certificate form.
Information held by Nominees

59. Finnish law expressly allows shares to be held by nominees when the shares are in book-entry form. Under Section 5a of the Act on BookEntry Account, shares in book-entry form owned by a foreign individual, a corporation or a foundation can be held in a nominee account maintained by a custodian with the CSD. When the account is a nominee account, the CSD will record the identity information of the custodian instead of the beneficial owner of the shares. There is also a requirement that the account explicitly indicate that it is a nominee account. The account holder of a custodial nominee account may be a central securities depository, a central bank, an account management organisation or a credit institution (s. 5(a), Act on the BookEntry Accounts). The holder of a custodian nominee account is required to know the identity of the person he is acting for under Section 28 of the Act on the Book-Entry System.
Conclusion and Practice

60. Ownership information for private and public company established in Finland is kept by the company in the Share Register or by the CSD in the shareholder register. Ownership information on shareholdings of at least 10% in private, public and foreign companies is held by the Finnish tax authority. The holder of a custodian nominee account under the book-entry system is required to know the identity of the person he/she is acting on behalf. 61. In practice, the Finnish competent authority can simply access its database to reply to most requests concerning ownership information. Ownership information may be accessed directly by the tax auditors from the computers connected to the tax authoritys computer network and the access to the information is almost instantaneous. The Finnish authorities advised that tax authoritys databases are updated on a constant basis whenever new data or information is made available to them. 62. With regard to ownership information of shares in book-entry form, the CSD keeps ownership information in its database. Reports identifying owners of shares in book-entry form can be generated within a few business days whenever a request is made to the CSD.

63. In the three-year period under review (2009-11), Finland received requests concerning ownership information of companies. The Finnish authorities maintain consolidated statistics concerning incoming requests concerning information on the identity or ownership information of legal entities (including companies, partnerships, etc.). In the period under review, 23 EOI requests concerning identity or ownership information were received. Generally, response times were within 90 days (an average response time of 71 days). The comments provided by Finlands EOI partners confirmed that ownership information of companies was one of the common categories of information requested. They have also reported that there were no instances where the requested information was not provided to them.
Bearer shares (ToR A.1.2)

64. Bearer shares cannot be issued in Finland since 1 January 1980, resulting from the repeal of the Limited Liability Companies Act (LLCA) of 1895, and the issuance of the LLCA of 1978. The LLCA of 1978 was repealed and replaced by the existing LLCA of 2006 that contains the same prohibition on the issuance of bearer shares. The Finnish authority advised that the decision to prohibit the issuance of bearer shares in 1978 was based on three reasons: (i) the use of bearer shares was not prevalent and they were mainly used by publicly traded companies; (ii) the need for companies to know its shareholders; and (iii) to prevent shareholders from misusing voting rights. 65. It is possible that some bearer shares issued prior to 1 January 1980 by companies that were in existence at that time are still in circulation in Finland. Finland estimates that there are approximately 9 400 companies that were incorporated before 1 January 1980 which are still in existence and active today. This represents less than 5% of the total number of all companies currently in existence. These 9 400 companies could have potentially issued bearer shares if their articles of association allowed them to do so. There are no specific statistics on how many of the 9 400 companies could issue bearer shares pursuant to their articles of association, if any of them has issued bearer shares and if any bearer shares are still in circulations after 32 years of prohibition. The Finnish authorities confirmed that bearer shares were never detected in tax audits. In its EOI practice, Finland has never faced a case where it could not identify all shareholders of a company. As the use of bearer shares was not prevalent and no issues have arisen in practice, the Finnish legislator does not see the need to issue any further legislation on the subject matter. In any case, any legacy issue relating to bearer shares should not pose 66. a material risk as mechanisms enabling the identification of the holders of such shares are in place. For instance, there is a requirement for companies to include information on the names, business IDs or personal identity codes
and the number of shares held by each shareholder that owns at least 10% of the shares of a company, in their tax return. The same information is also required for every shareholder if the company has less than 10 shareholders (ss. 7 and 10, AAP). Moreover, companies must keep a share register which must contain a list of the shares or the share certificates in numerical order, their dates of issuance and the names and addresses of the shareholders (Chapter 3, Section 15(1) of the LLCA). The transfer of shares of a non-listed company is also subject to a transfer tax, and the identity of the transferor and transferee must be provided to the tax authority (s. 30, Asset Transfer Tax Act). In addition, resident taxpayers must provide detailed information on the dividend income they receive and must also declare assets including shares they own in their tax return annually (s. 7.1, Act on Assessment Procedure).

67. Bearer shares cannot be issued in Finland since 1 January 1980. While some bearer shares may still exist, the risk associated with the circulation of these shares is not significant as the use of bearer shares was not prevalent prior to 1980 and there are appropriate mechanisms in place to identify the holders of such remaining shares. Namely, various reporting obligations applicable to both companies and shareholders (including holder of bearer shares) ensure that any holder of a remaining bearer share is identified.
Partnerships (ToR A.1.3) Types of partnerships

68. Partnerships in Finland are formed pursuant to the Partnerships Act 389/1988 (PA). Under Chapter 1, Section 1 of the PA, a partnership may be a general or limited partnership. Both general and limited partnerships are legal persons under Chapter 1, Section 1 of the PA. A partnership is formed by a partnership agreement and both individuals and legal persons can be a partner of a general or limited partnership. A partnership must have at least two partners. General Partnership: All partners are personally, jointly and severally liable for the obligations of the partnership. Partners can contribute to the partnership in the form of cash, assets or work (services). Unless otherwise agreed, all partners decide together the matters relating to the partnership. Limited Partnership: There are two categories of partners: general partners and limited partners. There must be at least one general partner and one limited partner in a Finnish limited partnership. General partners have management control whereas limited partners

have no management control but receive a return on their investment. General partners are personally, jointly and severally liable for all the obligations of the partnership. Limited partners are only liable on debts incurred by the firm to the extent of their registered investment. 69. In addition to the above partnerships, there are also European Economic Interest Groupings (EEIGs) (Council Regulation (EEC) No. 2137/85 of 25 July 1985 on the European Economic Interest Grouping). EEIG is a form of association between companies and other legal bodies, firms or individuals from different EU countries who operate together across national frontiers. Finland has also transposed the Council Regulation into the Act on European Economic Interest Grouping 1299/1994 (AEEIG). 70. As at 30 June 2012, there are 12 630 general partnerships, 35 198 limited partnerships and one EEIG registered in the Trade Register in Finland.
Information held by government authorities Registration of partnerships

71. Chapter 1, Section 2 of the PA indicates that the partnerships entry in the Trade Register maintained by NBPRF is governed by the Trade Register Act 129/1979. The Trade Register Act provides that where the partner is an individual, the name, address, identity number, date of birth and nationality have to be provided and where the partner is a legal person, the companys identification number has to be provided (sections 3 and 4, Trade Register Act). As the partners are registered in the Trade Register, partnerships are required to notify the Trade Register if there are any changes to the composition of the partners of the partnership (section 11 of the Business Information Act). An EEIG is also required to be registered in the Trade Register main72. tained by the NBPRF. The information that has to be furnished by an EEIG is also governed by the Trade Register Act 129/1979 as spelt out in Section 2 of the AEEIG. In this regard, an EEIG has to file the same information and details as those required by a general and limited partnership described in the preceding paragraph. 73. All the information described in the preceding two paragraphs are kept and maintained in the tax authoritys database.

74. Partnerships are not regarded as separate taxable entities in Finland. The net income of a partnership is determined under the rules applicable to corporate bodies but is attributed to the partners according to each partners share in the partnerships total income and must be taxed either as earned income or investment income in the hands of the partners. In this regard, all partnerships and EEIGs will be required to submit a prescribed form (Form 6A) to the tax authority for the determination of the taxable income attributable to the partners and information identifying the partners of the partnership/EEIG has to be provided to the tax authority if there are changes to the composition of the partnership. The same rule applies to foreign partnerships that are carrying on a business in Finland. Moreover, Finnish resident partners of foreign partnerships are taxed in Finland as if they were partners in a domestic partnership and any losses of the partnership are deducted at the partner level. 75. All the information provided by the partnerships in the prescribed forms are captured and stored in the database maintained by the tax authority.
Information held by the partnership or partners

76. A partnership is formed by a partnership agreement. The PA is silent as to the information that has to be included in the partnership agreement and whether the partnership or a partner is required to maintain information that identifies the partners. Notwithstanding the above, as partnerships/EEIG are also responsible for registering the transfer of partnership interests with the Trade Registry, this would imply that they would have to maintain such information in order to comply with their statutory obligations.

77. Information identifying partners of a general, limited partnership and EEIG is filed in the Trade Register and with the tax authority and are stored the tax authoritys database. In practice, the Finnish competent authority can access information stored in its database to reply to most EOI requests concerning ownership information. Such information may be accessed by the tax auditors directly from the computers connected to the tax authoritys network and the access to the information is almost instantaneous. The tax authoritys tax database is updated frequently on a constant basis whenever new information is received. 78. In the three-year period under review (2009-11), Finland received requests relating to the identity of partners in a partnership. The Finnish authorities maintain consolidated statistics concerning incoming requests

concerning information on the identity or ownership information of legal entities (including companies, partnerships, etc.). In the period under review, 23 EOI requests concerning identity or ownership information were received. In average, requests were responded in less than 90 days. Finlands EOI partners that provided comments to this review did not refer to information identifying partners of partnerships as one of the categories of information they requested Finland to provide.
Trusts (ToR A.1.4)

79. The Finnish legal system does not allow for the creation of trusts and the legal concept of trust does not exist under Finnish law. Finland has not ratified the 1985 The Hague Convention on the Law Applicable to Trusts and on their Recognition. There is, however, no obstacle for Finnish citizens or legal persons to be trustees of foreign trusts.
Information held by trustees acting by way of business and other service provider subject to AML Law
80. Under the AML Law, service providers (trust and company service providers) referred to in Article 3(7) of the Directive 2005/60/EC of the European Parliament and of the Council are required to comply with AML Law and conduct CDD procedures (s. 2(23), AML Law). Article 3(7)(d) of the Directive further define trust and company service providers means any natural or legal person which by way of business provides any of the following services to third parties: (); (d) acting as or arranging for another person to act as a trustee of an express trust or a similar legal arrangement. Therefore, the AML requirements cover all circumstances where a trustee is acting by way of business. 81. In this regard, if a settlor(s) approaches such a Finnish service providers to establish a trust and/or act as trustee, the Finnish service provider would be required to conduct CDD and, as such, identify and verify the identity of his or her customer under Section 7 of the AML Law. Such service providers are also required to identify the beneficial owners under Section 8 of the AML Law. The term beneficial owner is defined under Section 5(6) of the AML Law to mean a natural person on whose behalf a transaction is being conducted. In the case where the customer is a legal person, it means the natural person who controls the legal person by (i) having at least 25% voting rights; or (ii) has the power to appoint or dismiss the majority of member of the board of the legal person. If the measures laid down cannot be carried out, the obligated person is obliged to decline entering into a business relationship with the prospective customer.
82. There are currently no written guidelines in Finland detailing how the CDD is to be carried out in the case of a trust. Notwithstanding the absence of specific guidelines on trusts, the general guidance in respect of CDD provided in the AML Law still applies. The Finnish Regional State Administrative Agency (RSAA), who is the AML supervisory authority for all trust and company service providers in Finland, advised that it considers the beneficiaries of a trust as the beneficial owners. The RSAA has also highlighted that the situation of a Finnish resident acting as a trustee or administrator of a foreign trust is not common in Finland. The RSAA has not encountered any situations where obligated person under its supervision has requested for clarification on how the CDD should be conducted in situations where the customer is a trust (or a trustee) or where the customer purports to create a trust and require trusteeship services from the obligated person. To the extent that a trust (or the trustee) uses the service of an obligated 83. person that is an entity listed in Section 2 of the AML Law (e.g. opening an account with a financial institution), the AML Law would apply to the trust (or the trustee) as customer. The obligated persons are required to conduct CDD and identify and verify the identity of their customers/prospective customer under Section 7 of the AML Law. If the prospective customer is representing another person, the obligated person is required to also identify and verify the identity of the representative. The beneficial owner also has to be identified and verified by the obligated person under Section 8 of the AML Law. If the measures laid down cannot be carried out, the obligated person is obliged to decline entering into a business relationship with the prospective customer.
Information held by the tax authority

84. Finnish tax law does not contain specific provisions on the taxation of assets or income derived through foreign trusts with a link to Finland. The Finnish authorities have also indicated that they are not aware of any instances where foreign trusts have been administered by Finnish persons. Notwithstanding the above, if information is considered necessary for Finnish tax assessment purposes, the taxpayer has an obligation to disclose such information to the tax authority. This may include relevant ownership information concerning assets held in trust. 85. Finland taxes its residents on their worldwide income. The trustee and the beneficiaries must provide all information necessary to determine the amount of taxable income or assets to the Finnish tax authority (s. 11, AAP). Therefore, the taxation of Finnish resident trustees in respect of income arising from the trust assets they hold would put an onus on the trustees to explain the origin of the income. A trustee resident in Finland is subject to record-keeping requirements for determination of his/her income, as any other person resident in Finland. Thus, all records that are necessary for the

determination of his/her income must be kept. This would most likely include trusts deed and other documents related to the management of the trust, which will allow the identification of the settlor(s) and beneficiaries.

86. Finnish tax law does not contain specific provisions on the taxation of assets or income derived through foreign trusts with a link to Finland. Notwithstanding the above, a trustee resident in Finland is subject to tax on his worldwide income and to the record-keeping requirements for determination of his/her income. Thus, all records that are necessary for the determination of his/her income must be kept. These records would most likely include the trust deed and other documents related to the management of the trust, which allow the identification of settlor(s) and beneficiaries. It can therefore be concluded that Finland has taken reasonable measures to ensure that ownership information is available to its competent authorities in respect of foreign trusts with a Finnish resident trustee or administrator. 87. In addition to the tax obligations, AML CDD obligations will also apply in a number of circumstances. Information identifying the settlor(s) and beneficiaries of a trust is likely to be available with professional service provider providing trustee services by way of business, as they are required to identify their customers and the beneficial owners. The same information may also be available if a trust (or trustee) uses the service of a service provider (e.g. financial institution) that is subject to AML Law in Finland. The general obligations to identify beneficial owners under AML would amount to an obligation to identify the beneficiaries who have at least 25% interest in the trust. The supervisory authority for trust and company service providers for AML Law purposes, advised that the situation of a Finnish resident acting as a trustee or administrator of a foreign trust is not common in Finland. From the comments provided by Finlands EOI partners, information 88. identifying settlor(s) and beneficiaries of foreign trusts was not one of the categories of information Finland was specifically requested to provide in the last 3 years. Finland confirmed that it has not received any requests concerning settlor(s) and beneficiaries of foreign trusts.
Foundations (ToR A.1.5)

89. Foundations in Finland are regulated by the Foundation Act. A foundation can be established by either a foundation deed or a written will, which must state the purpose of the foundation and the property to be endowed to it. 90. A foundation must have a useful (beneficial) purpose and the purpose cannot be to conduct business or to bring direct financial gains to the
founder or a functionary of the foundation. Foundations in Finland are typically established for the purpose of preserving a national heritage (e.g. for maintaining a museum), maintaining an organisation of community interest (e.g. sports club) or for the purpose of granting grants, scholarships, fellowship and awards. Notwithstanding the general rule governing the purpose of a foundation, the Finnish authority advised that it is possible for a foundation to be given the authorisation to carry out auxiliary business activities. Such foundations are however, required to be registered in the Trade Register with the NBPRF. There are approximately 2 800 foundations registered in the Register of Foundations maintained by NBPRF and 30 are concurrently registered in the Trade Register maintained by NBPRF.
Information held by government authorities Registration of foundations

91. Permission has to be granted by NBPRF to establish a foundation. To apply for the permission, an application accompanied by (i) the original or certified copy of the deed of the foundation or the will with a certificate proving that it cannot be contested; and (ii) the by-laws drafted for the foundation, have to be submitted to NBPRF. The deed of the foundation or the will establishing the foundation must be signed by the founder and attested by two persons under Chapter 1, Section 3(1) of the Foundation Act. In this regard, information identifying the founder is found in the foundation deed or will and is filed with the NBPRF for the application of permission to establish a foundation. 92. The Finnish authorities confirmed that NBPRF only grants permit for establishing foundations having a beneficial purpose. If the purposes of the foundation is not considered beneficial, the permission is denied. After permission has been granted by the NBPRF, a foundation must 93. be registered in the Register of Foundations maintained by NBPRF. The Finnish authorities explained that permission would not be given if the value of the property endowed is less than EUR 25 000, or so disproportionate to the purpose of the foundation that no prerequisites for establishment are fulfilled. For the registration in the Register of Foundations, the following information has to be provided in a notice to be filed with NBPRF. The full name, citizenship, place of residence and Finnish social security code or, in its absence, the date of birth of the chairman and each member and deputy member of the board of trustees; Confirmation by the trustees and a certificate of the auditor stating that the movable property bestowed on the foundation is in the possession of the trustees;

A certified copy of a deed of conveyance regarding the real property bestowed on the foundation, which must be signed also by the person who has received the property on behalf of the foundation; The full name, citizenship, place of residence and Finnish social security code or, in its absence, the date of birth of any person authorised to sign on behalf of the foundation either by himself or together with another person; and The postal address of the foundation.
94. Any subsequent changes made to the members of the board of trustees of a foundation or persons authorised to sign the name of the foundation as well as any change in the postal address of the foundation is also required to be registered in the Register of Foundation maintained by NBPRF under Chapter 5, Section 22 of the Foundation Act. 95. There is however, no express obligation to identify the beneficiaries (where applicable) in the by-laws of the foundation or in the notice filed with NBPRF for the registration in the Register of Foundations. The Finnish authorities have explained that this is because in many instances the beneficiaries of foundations may not be identifiable at the time of establishment of the foundation. Moreover, the beneficiaries may vary over time (e.g. the case of foundations granting scholarships or awards).

96. After registering with the NBPRF/Register of Foundations, the foundation must register with the tax authority. The tax authority review whether the foundation meets the criteria to be be tax exempt. The tax authority explained what the following criteria is: it promotes solely and directly public benefit in material, spiritual (religious), ethical or societal meaning, its activities are not restricted to only a limited group of people, and it does not bring financial gain to the founder or a functionary of the foundation. Foundations are exempted from income tax if they are deemed as an entity promoting public benefit. However, the exemption does not cover any business income or income derived from real estate property derived by a foundation, which remains subject to tax. If an exempted foundation is carrying on business, it has to file tax returns in connection with its business income. Moreover, all foundation must file information on all grants, scholarships, fellowships and awards awarded exceeding EUR 1 000 on annual basis, identifying the beneficiaries of the grants, scholarships, fellowships and awards. In any case, a foundation must always keep all records concerning the identity of the beneficiaries for tax purposes.
97. If a foundation is not deemed an entity promoting public benefit, it will be liable to pay tax on its income as other business enterprises. In this case, the foundation would be required to file annual tax returns with the tax authority. Moreover, the foundation must also file information on benefits paid and keep all records concerning the identity of the beneficiaries for tax purposes.
Information held by service providers

98. To the extent that a foundation uses the service of an obligated person subject to AML Law (e.g. opening an account with a bank), the AML Law would apply to the foundation as customer. The AML Law obligated persons are required to conduct CDD and identify and verify the identity of their customers under Section 7 of the AML Law. The beneficial owner is also required to be identified and if necessary, have their identity verified by the obligated person under Section 8 of the AML Law. The term beneficial owner is defined under Section 5(6) of the AML Law to mean a natural person on whose behalf a transaction is being conducted (i.e. in the case of a foundation it is expected that the beneficiaries of the foundation would be identified as the beneficial owners). In the case where the customer is a legal person, it means the natural person who controls the legal person by (i) having at least 25% voting rights; or (ii) has the power to appoint or dismiss the majority of member of the board of the legal person. If the measures laid down cannot be carried out, the obligated person is obliged to decline entering into a business relationship with the prospective customer. Considering the general language used in the AML Law, it is somewhat unclear whether the obligation to identify the beneficial owner will ensure that all beneficiaries of the foundation are identified.
Conclusion
99. Information identifying the founder(s) and members of the board of trustees is available with the Register of Foundations maintained by NBPRF. Information concerning the payment of benefits must be filed with the tax authority and the foundation must keep information on the identity of the beneficiaries as part of its tax compliance obligations. Moreover, it appears that most foundations in Finland pursue a public benefit and in the circumstances that they do not, they are subject to extensive tax obligations.
Other relevant entities and arrangements

100. Co-operative can be formed in Finland under the Co-operatives Act (CoA). A co-operative is defined as an organisation whose membership and share capital have not been determined in advance. The purpose of a co-operative shall be to promote the economic and business interests of its members

by way of the pursuit of economic activity where the members make use of the services provided by the co-operative or services that the co-operative arranges through a subsidiary or otherwise (Chapter 1, Section 2(1) of the CoA). A cooperative must have at least three members (Chapter 3, Section 3(1) of the CoA) and must be registered in the Trade Register maintained by the NBPRF. There are 4 308 co-operatives registered in the Trade Register as at 30 June 2012.
Information held by Co-operatives

101. Chapter 3, Section 3 of the CoA expressly provides that a membership register must be kept by the Board of Director of the co-operative. The membership register must include the name and address of the members, the number of shares held by each member, the date of admission of the member and the date the member ceased to be a member (if applicable). The membership register must be accessible to the members and the creditors at the head office of the co-operative.

102. All co-operatives are required to maintain a register of members and therefore ownership information is available with them. Finland has received no requests for information in relation to co-operatives. No issues have been raised by Finlands EOI partners in this regard.
Enforcement provisions to ensure availability of information (ToR A.1.6)

103. The existence of appropriate penalties for non-compliance with key obligations is an important tool for jurisdictions to effectively enforce the obligations to retain identity and ownership information. In Finland, administrative authorities, including the tax authority can impose punitive fees (civil penalties) according to the powers allocated to them.
Enforcement provisions under tax law

104. Section 32 of the AAP establishes the following sanctions in case taxpayers fail to comply with tax reporting obligations: The tax authority may impose a surtax of up to EUR 150 if the taxpayer has filed a tax return or a comparable notice, document or filing containing a minor error or omission and in spite of being prompted, has neglected to correct the error or omission; or if the taxpayer has been late in submitting a notice, document or filing without an acceptable reason;
The tax authority may impose a surtax of up to EUR 800 if the taxpayer has filed a return or a comparable notice, document or filing that has a major error or omission; or has not filed the same documents until prompted (proof of prompting to be shown); The tax authority may impose a surtax of 30% of the taxable income and as appropriate a surtax amounting to 1% of the asset balance if the taxpayer has by way of intent or gross negligence, filed a return or a comparable notice, document or filing that has a major error or omission; or if the taxpayer has failed to submit any filing.
Enforcement provisions under commercial and civil laws Companies

105. Under Chapter 25, Section 2 of the LLCA, any person who intentionally fails to keep the share register or the shareholder register or to keep such register available shall be convicted of a company law violation and sentenced to a fine (based on day fines) unless the fault is considered of minor significance or subject to a more severe penalty. The amount of a day fine is determined in proportion to the income or solvency of the person fined (i.e. one sixtieth of the average monthly income of the person subject to the fine less taxes). The number of day fines to be applied is determined with basis on the gravity of the failure.
Partnerships/EEIGs
106. While information identifying the partners is generally required to be entered in the Trade Register, the Finnish Authority has advised that non-compliance of such obligations does not affect the legal capacity of partnership or affect any changes made to the composition of the partnership. A sanction in the form of a civil penalty may nonetheless be imposed on the offender for non-compliance with the registration and notification obligations. The penalty is determined based on day fines, as described above in the analysis on companies.
Trusts
107. Trusts are not recognised in Finland with exception to the reference to it in the AML Law. Notwithstanding the above, the enforcement measures provided in connection to general tax reporting obligations applicable to taxpayers in general would apply to Finnish resident trusts. Moreover, a Finnish trust and company service provider is subject to AML law which contain enforcement measures in case of violation of the obligation to conduct customer due diligence (as indicated in subsequent paragraphs).
Foundations
108. Under Chapter 5, Section 27(2) of the Foundation Act, the penalties as prescribed in Section 19(1) of the Business Information Act may apply to the failure to register changes made to the members of the board of trustees of a foundation or persons authorised to sign the name of the foundation as well as any change in the postal address of the foundation. The penalty is determined based on day fines, as described above in the analysis on companies.
Co-operatives
109. Under Chapter 22, Section 2(3) of the CoA, a person who neglects to keep a membership register shall be convicted of an infraction and sentenced to a fine (based on day fines), determined based on the methodology described above on the analysis on companies.
Enforcement provisions under AML Law

110. Failure of an AML obligated person to conduct customer due diligence (CDD) is punishable with a fine under Section 40 of the AML Law. 111. If the CDD measures prescribed in the AML Law cannot be carried out, the AML obligated person is obliged to decline entering into a business relationship with the customer or decline to carry out the transaction for the customer. Violation of the obligation to decline the business relationship with customer is punishable with a fine under Section 40 of the AML Law.

112. Finnish law provides for a wide range of sanctions. Penalties are imposed in proportion to the offense and the means of the offender. It appears that penalties are dissuasive enough to ensure compliance. Moreover, the Finnish tax authority receives periodic reporting information from a number of sources (e.g. employers, banks, pension funds, insurance companies, stock exchange). The Finnish tax authority uses this information to pre-fill the tax returns of individuals (pursuant to s. 7 of the Act on Assessment Procedure). The tax authority sends the pre-completed tax returns to the taxpayer in the month of March or April of the year following the tax year. This minimises the extent to which taxpayers could provide inaccurate information to the Finnish tax authority. 113. Additionally, the Finnish tax authoritys database allows for crosschecking of information between different sources, includes information from tax returns. Tax control is a key instrument to ensure compliance.
Information concerning a large number of taxpayers are analysed based on established quantitative and qualitative criteria. As a result of this initial analysis, tax returns are selected for review by a tax officer who will be in contact with the taxpayer for further clarification. The statistics on the number of tax control measures conducted in the period under review (200911) are as follows: 8
2009 Tax auditing unit Tax audits Tax control visits Comparative data audits Tax audits Tax control visits Comparative data audits 2 799 249 73 698 723 9 4 551 3 275 37 17 277 362 3 968 3 286 45 425 142 642 4 540 2010 2011
Individual and Corporate taxation units
114. Moreover, the Finnish tax authority established in 2011 the Grey Economy Information Unit and has conducted 3 428 tax audits on taxpayers suspected of involvement in the grey economy. Tax auditing units spent 30% of their working hours (25 353 working days) on auditing taxpayers suspected of involvement in the grey economy. 9 115. The National Board of Patents and Registration monitors whether legal entities registered in the trade register remain active and regularly strike-off dormant companies from the register. This is carried out on legal entities that do not file annual reports and tax returns for a number of years. The NBPRF has struck off more than 100 000 legal entities since it started this exercise. 116. With regard to the obligations established under the Finnish AML/CFT framework, on-site inspections and other supervisory visits are conducted on a regular basis. In 2011, 44 of such inspections/visits were conducted in supervised entities. 117. Based on the peer input received, Finland was capable of responding to all requests for ownership and identity information received from its peers. This implies that ownership and identity information is adequately maintained in Finland.
8. 9. Source: Finnish Tax Administration Annual Report 2011. Source: Finnish Tax Administration Annual Report 2011.

118. Finland is encouraged to continue its efforts in the exercise of appropriate monitoring the effectiveness of its enforcement actions to ensure that obligations to retain identity and ownership information are sufficiently enforced.
Determination and factors underlying recommendations
Phase 1 determination The element is in place. Phase 2 rating Compliant.
A.2. Accounting records

Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements.
119. The ToR sets out the standard for the maintenance of reliable accounting records and the necessary accounting record retention period. It provides that reliable accounting records should be kept for all relevant entities and arrangements. To be reliable, accounting records should: (i) correctly explain all transactions; (ii) enable the financial position of the entity or arrangement to be determined with reasonable accuracy at any time; and (iii) allow financial statements to be prepared. Accounting records should further include underlying documentation, such as invoices, contracts, etc. Accounting records need to be kept for a minimum of five years.
General requirements (ToR A.2.1)

120. Under the Accounting Act, anyone who carries on a business or practices a profession must keep accounting records on these activities (Chapter 1, Section 1). This includes Finnish or foreign persons engaged in business operations or carrying out a profession, including a Finnish permanent establishment of a foreign enterprise (Accounting Board opinion 1275 23.05.1994). Moreover, a number of Finnish legal entities are always obligated to maintain accounting records, regardless of whether they carry on a business (Chapter 1, Section 1). This includes limited liability companies, general partnerships, limited partnerships, foundations and co-operatives (Chapter 2, Section 1). 121. Chapter 2 of the Accounting Act sets out the general principle that all business transactions must be recorded in a chronological and systematic order in the accounting system and supported by a voucher or other supporting documents.
122. Chapter 3 of the Accounting Act further sets out the obligation for a legal entity to prepare financial statements and an annual report that gives a true and fair view of the legal entitys result of operation, financial position, factors of uncertainty and other facts that influence the development of business. The financial statement and annual report consists of a balance sheet, a profit and loss statement, a cash-flow statement and the notes to the financial statement. 123. These requirements ensure the completeness of the accounting entries and enable the legal entities to form an overall picture of the events, balance and result of the business activity. According to Chapter 2, Section 9 of the Accounting Act, the account124. ing information is generally required to be kept within Finland. However, accounting information may be kept temporarily abroad if it is necessary for taking care of accounting or for drawing up the financial statement and annual report of a legal entity. Accounting information may be kept electronically in another EU member state permanently if a real-time connection can be guaranteed and if the information can be converted into clear written form. 125. The failure to comply with the requirements stipulated in the Accounting Act is punishable with a fine under Chapter 8, Section 4 of the Accounting Act or with a fine and imprisonment under Section 30 of the Criminal Code depending on the gravity of the violation. Minor violations are punishable as accounting violations under Chapter 8, Section 4 of the Accounting Act. The sanction is in the form of a fine decided by the district court (as a first instance) or the prosecutor in the so-called penal order procedure. Depending on the gravity of the case, the fine may vary between 1 to 120 day fines (unit fines). The amount of a day fine is determined based on the offenders income level. Major violations of the obligations stipulated in the Accounting Act are punishable according to the provisions in Section 30 of the Criminal Code as accounting offence, aggravated accounting offence or negligent accounting offence. Depending on the gravity of the case, the sentence may be a fine (between 1 to 120 day fines) or imprisonment for up to 4 years. 126. The general rules described above apply to Finnish legal entities and anyone carrying on a business in Finland. In addition, the Accounting Act provides specific rules for specific types of entities, as described below.
Companies
127. In the case of a company, accounting records must be kept and the financial statement and the annual report of the company must be drawn up no later than 4 months after the end of the financial year and must be signed by the Board of Directors and the Managing Director (Chapter 3, Sections

6 and 7 of the Accounting Act). A decision must be made at the Annual Ordinary General Meeting of the shareholders to adopt the financial statement and annual report within 6 months after the end of the financial year (Chapter 5, Section 3(2) of the LLCA). 128. The financial statement and the annual report must also be filed with the NBPRF no later than 2 months after the reports have been adopted at the Annual Ordinary General Meeting (Chapter 3, Section 9 of the Accounting Act). However, the NBPRF and the tax authority have streamlined their operations and as a result, such accounting information is only provided pursuant to the Tax Return Form 6B. Therefore, in practice, taxpayers file accounting information directly with the tax authority and there is no further obligation to submit the same information to NBPRF.
Partnerships/EEIGs
129. In the case of a general or limited partnership, accounting records must be kept and the financial statement and the annual report of the partnership must be drawn up no later than 4 months after the end of the financial year and must be signed by the partners (Chapter 3, Sections 6 and 7 of the Accounting Act). The financial statement and the annual report must be filed with the NBPRF no later than 6 months after the end of the financial year if a partner is a company or another partnership (Chapter 3, Section 9 of the Accounting Act and Chapter 9 of the PA). In this regard, all partnerships and EEIGs are required to submit a prescribed form (Form 6A) to the tax authority for the determination of the taxable income attributable to the partners and information identifying the partners of the partnership/EEIG has to be provided to the tax authority if there are changes to the composition of the partnership. The same rule applies to foreign partnerships that are carrying on a business in Finland. Moreover, Finnish resident partners of foreign partnerships are taxed in Finland as if they were partners in a domestic partnership and any losses of the partnership are deducted at the partner level.
Trusts
130. The concept of trusts does not exist in Finnish law and there are no express provisions concerning the keeping of accounting records for trusts with Finnish resident trustees or administrators. A reference to trust and company service providers only exists in the context of the AML Law, which established CDD obligations on trustees of foreign trusts. 131. As noted in part A.1.4 of this report, the assets or income derived in connection with a foreign trust are subject to tax as any other assets or income of the Finland resident trustee and the Finnish resident trustee is
subject to record keeping requirements for the determination of its income (under Act on Assessment Procedure and/or the Accounting Act). 132. The Finnish authorities confirmed that, pursuant to a fundamental principle in Finnish accounting legislation (entiteettiperiaate), all persons subject to the obligation to keep accounting records must keep segregated accounts in connection to their own assets and liabilities and the assets and liabilities of other persons. The entiteettiperiaate principle is reflected in the Chapter 3 section 2 of the Accounting Act, which requires that true and fair accounts be kept. Moreover, this principle is also spelled out in the Finnish Accounting Ordinance (Chapter 1 section 6:5) which provides that funds to be managed separately must be disclosed as separate item of the balance sheet. The Finnish authorities confirmed that this principle would apply to any person managing assets of third parties by way of business (including a professional trustee) and would require him to segregate his assets from the assets he is administering. 133. Moreover, if a person manages assets of several clients (e.g. a trustee administering several trusts), the principle of huolellisuusperiaate, according to that accounts must be managed prudently, would require that separated accounts be kept for each of his client. The Finnish authorities confirmed that this principle has been applied by the Finnish Accounting Board and the courts.
Foundations
134. In the case of a foundation, the financial statement and the annual report of the foundation must be drawn up no later than 4 months after the end of the financial year and must be signed by the board of trustees of the foundation (Chapter 3, Sections 6 and 7 of the Accounting Act). The financial statement and the annual report must be filed with the NBPRF no later than 6 months after the end of the financial year (Chapter 3, Section 13(2) of the Foundations Act).
Co-operatives
135. Chapter 6, Section (1)(1) of the CoA expressly provides that cooperatives are required to prepare annual accounts in accordance with the provisions of the Accounting Act as well as the specific requirements expressly provided in the CoA. The annual accounts of a co-operative also has to submitted to an auditor for audit no later than 1 month before the ordinary general meeting of the co-operative. The financial statement and the annual report must be filed with the NBPRF no later than 6 months after the end of the financial year (Chapter 3, Section 9 of the Accounting Act).
Tax Law
136. Pursuant to the AAP, taxpayers are expected to report their taxable incomes to the tax authority, including details on any deductions against taxes, information on assets and liabilities, and other facts that have an impact on the processes of tax assessment (s. 7). Moreover, a taxpayer who operates a trade, business or agriculture should complete a tax return in all circumstances (s. 7).

137. Considering the record keeping requirements provided for by the Accounting Act, accounting records are kept by all relevant entities and arrangements, which will correctly explain all transactions, enable the financial position to be determined with reasonable accuracy at any time and allow financial statements to be prepared. 138. The Finnish tax authority has a wide range of instruments at its disposal to protect its tax base and ensure compliance with legal obligations. 139. In Finland, most legal entities (including limited companies and cooperatives) can file tax returns electronically. The filing rate is monitored and companies that fail to timely file their returns are prompted to do so. Failure to file tax returns has serious consequences. It may lead to the struck off the tax register and invalidation of the entities business ID. This makes it almost impossible for a company to conduct business or open a bank account etc. Tax control is a key instrument to ensure compliance. Most of the tax 140. control is carried out by comparing the information supplied by taxpayers and information received from a variety of sources (banks, other taxpayers etc.) in a computerised system. Information concerning a large number of taxpayers are analysed based on established quantitative and qualitative criteria. As a result of this initial analysis, tax returns are selected for review by a tax officer who will be in contact with the taxpayer for further clarification (such as the provision of receipts or other documents). In 2011, the focus in the control of corporate income taxation was on large and medium-size enterprises. More than 370 000 enterprises were subjected to tax control. 141. The Finnish tax authority has identified violations of the obligations imposed under the Accounting Act in the course of tax audits. The number of reports concerning suspicious of accounting crimes made by the tax authorities was 204 in 2009, 156 in 2010 and 147 in 2011. 142. Over the three-year period under review, 73 requests concerning accounting information were sent by information exchange partners. Generally, this information was provided within 90 days (the average response time was
55 days). From the comments provided by Finlands EOI partners, there have been no instances where the accounting information sought was not provided.
Underlying documentation (ToR A.2.2)

143. Under the Accounting Act, all accounting entries in the accounting system must be supported by a voucher (Chapter 2, Section 5). The voucher may be internally generated (but must be duly approved by the reporting entity) or provided by a third party (such as invoices, delivery order etc.) and must contain information about when the business transaction occurred, what it concerns, the amount involved and the counterparty the transaction was entered into. Where appropriate, the voucher must also contain information about other underlying documents or other information (such as invoices, contracts etc.) Chapter 2, Section 10 (paragraph 2) of the Accounting Act further require that vouchers must be kept in the order they were recorded or otherwise arranged in such a manner that connections between the vouchers and the recorded entries in the accounting system can be verified without difficulties. 144. Chapter 2, Section 11 of the AAP further provides that any taxpayers (e.g. individual sole proprietors) who do not have the obligation to keep accounting records, or the obligation to keep simple financial records, should keep their documentation, including paper-printed cash receipts. This documentation relates to the income reported in the tax return, including deductions, assets, liabilities and other facts.

145. Pursuant to the record keeping requirements provided for by the Accounting Act and the AAP, underlying documentation must be kept by companies, partnerships/EEIGs, foundations and co-operatives. 146. From the comments provided by Finlands EOI partners, underlying documentation was not one of the common categories of information Finland was specifically requested to provide.
Document retention (ToR A.2.3)

147. According to Chapter 2, Section 10 (paragraphs 1 and 3) of the Accounting Act, the minimum retention period for which accounting records are required to be kept is 10 years. The same retention period also applies in the case where the operation of the legal entity has been terminated or whether the legal entity has been wound up. In such situation, the legal entity is required to entrust the record keeping obligation to another person and update the NBPRF of the person entrusted with such responsibility.

148. Accounting vouchers, correspondences related to the transactions, reconciliation documents for a computerised accounting system as well as other underlying documentations must be retained for at least 6 years after the end of the calendar year during which the financial year ended under Chapter 2, Section 10 (paragraph 2) of the Accounting Act. 149. Moreover, pursuant to the decision of the tax authority on declaration obligations (latest decision no. 23.12.2011/1511, paragraph 18), corporations are obliged to retain for at least 6 years after the end of the tax year the calculation of taxable income and a calculation of net worth (assets). Income and cost items in the calculation of taxable income and assets and obligations in the net worth calculation must be based on documentation required by the Accounting Act. 150. Chapter 2, Section 11 of the AAP further provides that any taxpayers (e.g. individual sole proprietors) who do not have the obligation to keep accounting records, or the obligation to keep simple financial records, should keep their documentation, including paper-printed cash receipts for five years. This documentation relates to the income reported in the tax return, including deductions, assets, liabilities and other facts.

151. From the comments received by Finlands EOI partners, records were provided when requested and there have been no instances where Finlands EOI partners have highlighted that information is not available due to the retention period.
A.3. Banking information

Banking information should be available for all account-holders.
152. The requirement for financial institution to maintain transaction records derives from the Accounting Act (1336/1997). The Act applies to anyone who carries on a business or practices a profession as well as limited liability companies, co-operatives, partnerships, associations,
foundations, insurance funds, mutual insurance companies, insurance associations, investment companies, employees profit-sharing funds, deposit insurance funds, guarantee funds, investor compensation funds and clearing funds. Since banks and other financial institutions must be incorporated in the form of one of the entities listed above, the requirements provided under the Accounting Act apply to them with no exceptions. 153. Pursuant to the Accounting Act, all vouchers for the financial year, correspondences related to the transactions and reconciliation documents for a computerised accounting system must be maintained for at least 6 years (Chapter 2, Section 10). Transaction records and correspondences are considered to fall within the definition of accounting records. Even when legal entities have terminated their operations or dissolved, there is an obligation to preserve the records for 6 years. Section 10 also provides that ledgers and charts of accounts must be preserved for up to the 10th year following the expiry of the calendar year in which the accounting period was closed. The documents must be made available to the authorities whenever requested and can be kept in paper form, microfilm or in an electronic form that is easily accessible. 154. With regard to information identifying bank customers, the Finnish AML Law requires financial institutions to maintain full identity information of their clients. More specifically, under Chapter 2, Section 10 of the AML Law, financial institutions are required to maintain records establishing the identity of their clients for a period of 5 years following the end of a regular business relationship. When a transaction is occasional and amounting to over EUR 15 000, identity records of the clients have to be kept for a period of 5 years following the date the transaction was carried out under the same section.

155. The Accounting Act and the AML Law require financial institutions to keep records of their customers and the transactions with customers as well as to conduct CDD. As a result, information is available for all account holders, including all records pertaining to the customers, bank accounts and transactions. 156. The Finnish Financial Supervisory Authority (FIN-FSA) conducts on-site inspections and other supervisory visits pursuant to an annual plan which is based on risk analysis of the market and supervised institutions. The plan is reviewed twice a year. The FIN-FSA carries out its supervisory visits regularly and AML/CFT supervision is recognised as an essential part of the ongoing supervision. The frequency of supervisory visits in part depends on the size of the entity. After the inspection, the FIN-FSA sends out an

inspection letter in which points out deficiencies and orders the inspected entity to take corrective measures. 157. Since the new AML/CFT Act took effect in 2008, the FIN-FSA has followed closely with the entities progress to review their CDD procedures, ongoing monitoring systems, internal guidance, training and internal audit. In addition, the FIN-FSA has also carried out inspections in the following areas of relevance for AML/CFT issues: operational risks, internet banking services, IT-security and systems. The AML/CFT supervisory visits focus on verifying compliance with the AML/CFT laws and regulations, especially with meeting the requirement of risk-based approach, ongoing monitoring of transactions and customer relationships (including compliance with the international sanctions regime), CDD process for high risk customers, CDD for beneficial owners, and employee training programmes. 158. The number of AML/CFT on-site inspections and other supervisory visits from 2008 to 2011 are summarised in the table below:
Financial institutions supervised by FIN-FSA 2008 Credit institutions including branches of foreign credit institutions Insurance companies, including branches of foreign insurance companies Investment firms and mutual fund management companies Payment institutions, registered payment services and money remittance agents 14 1 20 4 2009 10 1 11 5 2010 34 3 15 14 2011 20 7 6 11
159. After the inspection, the FIN-FSA sends an inspection letter to the entity, in which the FIN-FSA points out deficiencies and orders the entity to take corrective measures. The total numbers of sanctions issued by the FIN-FSA in general have increased in recent years. However, no sanctions were issued relating to AML/CTF obligations between 2008 and 2011. It is the policy of the FIN-FSA that the threshold for issuing sanctions should not be too high. However, in the FIN-FSAs opinion sanctions must also not be an end in itself. If supervisory goals can be achieved by less stringent means and the issuance of a sanction is not necessary for other reasons, the FIN-FSA usually chooses to employ more lenient supervisory measures. 160. From the comments provided by Finlands EOI partners, banking information was one of the categories of information Finland was specifically requested to provide and there have been no instances where the requisite information was not provided to Finlands EOI partners. Over the three-year period under review there were 26 requests made for banking information. Generally, this information was made available within 90 days (63 days on average).

COMPLIANCE WITH THE STANDARDS: ACCESS TO INFORMATION 51
B. Access to Information
Overview
161. A variety of information may be needed in a tax enquiry and jurisdictions should have the authority to obtain all such information. This includes information held by banks and other financial institutions as well as information concerning the ownership of companies or the identity of interest holders in other persons or entities, such as partnerships and trusts, as well as accounting information in respect of all such entities. This section of the report examines whether Finlands legal and regulatory framework gives the authorities access powers that cover all relevant persons and information and whether rights and safeguards are compatible with effective exchange of information. It also assesses the effectiveness of this framework in practice. The Ministry of Finance is the designated competent authority under 162. all Finlands DTCs, TIEAs, Multilateral Convention and EU legislations. The Ministry has delegated its competency to the tax authority in most cases. The access powers of the competent authority are provided under Act 163. on Assessment Procedure (AAP). The access powers are wide and generally override any other secrecy, confidentiality or comparable restriction under Finnish law. They allow the competent authority to obtain information held by banks and other financial institutions as well as information concerning the ownership of companies or the identity of interest holders in other persons or entities, such as partnerships and trusts, as well as accounting information with respect to all such entities. In addition to the general access powers, the competent authority may also request the assistance of the police to search and seize documents directly from any persons. 164. Under Finnish law, there is no obligation on the competent authority to notify the subject of a request for information. As a matter of practice, the Finnish competent authority does not send a notification to the subject of the request.
52 COMPLIANCE WITH THE STANDARDS: ACCESS TO INFORMATION

165. Finlands institutional framework supports effective access to and provision of information requested by competent authorities of other jurisdictions. Input from Finlands EOI partners confirms that over the last 3 years Finland has had no difficulties to access information in order to respond to an EOI request.
B.1. Competent Authoritys ability to obtain and provide information

Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information).
166. The Ministry of Finance is the designated competent authority under all Finlands DTCs, TIEAs, Multilateral Convention and EU legislations. The Ministry has however, delegated the competency to the tax authority except in the following circumstances: For EOI arrangement under DTCs signed with Spain and Egypt; and For all other matters that are considered high fundamental importance.
167. Finland does not have a single unit that handles all international information exchange. Incoming EOI requests are divided between different units and each individual unit is competent to exchange information for matters that fall within its purview as described in the working order of the tax authority. 168. Most incoming EOI requests are processed in the Tax Auditing Unit. At the central level (known as the Steering and Development Unit, International Group), the unit is staffed by seven full time officers working on international exchange of information. Approximately 2.5 officers are assigned to deal with direct taxation matters while the other 3.5 officers are assigned to deal with indirect taxation matters. One officer is responsible for simultaneous audits and international audit projects. 169. The Steering and Development Unit reviews incoming requests regarding direct taxation (and indirect taxation if the legal basis for the request is any other agreements other than the EU regulation) before it is assigned to a designated person in the international network to gather the requisite information. The international network consists of regional audit directors and tax auditors from all five regional units specialised in international exchange of information (i.e. the contact persons). In each of the regional units, there are approximately 2 to 4 contact persons specialised in international exchange of information. The total number of contact persons in Finland is currently 23. All contact persons are experienced tax auditors and all of them are actively
working as auditors, with one exception in the largest region of Finland (Uusimaa), there is one person working full time with international requests concerning direct and indirect taxes (all incoming and outgoing requests and spontaneous exchanges). 170. Moreover, if the request is based on the EU regulation No. 904/2010 on VAT, the competency to deal with the request is delegated to the regional office. This means that the contact persons from the regional offices will send the reply directly to the requesting EU member state without going through the Steering and Development Unit. 171. The Corporate Taxation Unit is the competent authority for MAP negotiations. One officer is responsible for negotiations on transfer pricing matters, and one for all other double taxation situations where companies are involved. 172. The Individual Taxation Unit is responsible for MAP negotiations concerning double taxation situations involving individual taxpayers. One officer is fully responsible for this matter. The same officer is also the competent authority for automatic exchange (individuals and companies) except where the exchange is automatic exchange of VAT information within the EU that falls within the responsibility of the Tax Auditing Unit.
Powers to collect information

173. The Finnish competent authority has access to a number of databases, in which ownership, identity and accounting information collected by the tax authority and National Board of Patents and Registration of Finland (NBPRF) is maintained. Moreover, the tax authoritys databases also include information on: VAT transactions, defaults of VAT, employers payments, scholarships, book-entry securities, register of taxpayers subject to preliminary taxation, evaluations of real estate taxation values, real estate database (general information, occupancy information, active partners, ownership information, ground ownership information, building information, building list), credit information, forest holding transactions, employment income, shareholder information, taxation value of shares, dividend information, family relations (spouse, wife, husband, children, cohabitation, marriage), investment fund share redemption, financial year, lines of business, income tax, employees salary, VAT and preliminary tax amount declaration, taxable earned income, taxable capital gains, security trading transactions and financial statement information. 174. Moreover, the tax authority has access to the Business Information System (BIS system), maintained jointly by the NBPRF and tax authority. The system enables businesses and organisations to report their information in one single notification to both authorities. BIS is not a database in

traditional meaning but a channel and service portal for companies. The BIS System can also be accessed publicly free of charge. Information contained in the BIS System includes: business ID, trade name, company form, home municipality, language, main line of business, postal address, street address, telephone, registrations in force (e.g. VAT, trade registration, employer registration). 175. The Finnish competent authority therefore is able to reply to a number of requests without the need for the authority to make requests of external parties (e.g. ownership information can be generally found in the registers kept by the tax authority). The majority of the requests received by the Finnish competent authority in the period under review required the authority to contact the information holder (for example, requests for detailed accounting information, contracts, banking information). Section 11 of the AAP sets out the powers of the competent authority 176. to access information directly from a taxpayer. Section 11 provides: On request by the Tax Administration, or by an authority dealing with appeals, it is the taxpayers obligation to deliver, in addition to the tax return, the information, explanations, including cash receipts on paper, which may be necessary in the assessment of the taxpayers taxes, or in the processing of an appeal. 177. Chapter 3, Section 19 of the AAP further provides for the access powers of the competent authority on information held by a third party. Section 19 provides: If prompted by the Tax Administration, all physical and legal persons are concerned by an obligation to report information to the Tax Administration, in reference to a name, a bank account number, a bank transaction number, or a comparable special characteristic, to facilitate the tax assessment of another taxpayer. This information may additionally be necessary for the purpose of appeal processing. This information is to be reported if it can be obtained from the documentation held by the physical or legal person concerned, or if it is known to the person for other reasons, unless special grounds, by definition of law, confer the right to refuse from testifying. However, no refusal is acceptable in the case of information directly affecting tax assessment, and concerning the relevant taxpayers financial or economic position. 178. The use of the access powers contained in section 19 of the AAP in the context of an EOI request from a foreign jurisdiction was clarified in a decision of the Supreme Administrative Court issued in 1996 (see section B.1.3 of this report). Moreover, section 22 of the AAP specifically authorises the tax authority to obtain the information protected by secrecy laws.
Bank, ownership, and identity information (ToR B.1.1) and accounting records (ToR B.1.2) Ownership and identity information
179. A range of information is directly available to the Finnish competent authority by means of accessing the databases maintained by the tax authority and the NBPRF. The Finnish competent authority has access to a database where ownership and identity information collected by the tax authority is maintained (i.e. ownership information provided as part of the information required in the tax return as described in Section A.1). 180. EOI requests pertaining to information that is readily available in the databases maintained by the NBPRF or the tax authority are usually answered directly at the central level in most cases, within the Steering and Development Unit. No notice needs to be issued by the Finnish competent authority in this case. The Finnish competent authority advised that an answer could generally be provided within a week, sometimes within the same day. 181. The Finnish tax authority maintains a website 10 available in English where some identity information of legal entities (e.g. companies and partnerships) is publicly available without a fee. The Finnish competent authority informs Finlands EOI partners concerning the website and encourages them to make use of it. Notwithstanding the above, the Finnish competent authority will still reply to requests, even if they refer to information that is publicly available on the public website. For ownership and identity information that is not available in the tax 182. authoritys databases, the competent authority will invoke its access powers under Sections 11 or 19 of the AAP and issue a notice to the taxpayer or any relevant person holding the information to request for the information. 183. In terms of procedure, requests received at the Steering and Development Unit are passed on to designated auditors who are part of Finlands network for information gathering. These auditors contact the relevant parties, usually by letter, and request the information. An answering time of approximately two weeks is usually given. If the requests are complex, the answering time is usually extended by a few weeks. The answering time will only be further extended in exceptional cases.
10.
www.ytj.fi/english/yrityshaku.aspx?path=1704;1736;2052&kielikoodi=3.
Accounting records
184. As referred to in section A.2 of this report, financial statements must be filed with the NBPRF within the appropriate deadline imposed under the Accounting Act. However, the NBPRF and the tax authority have streamlined their operations and as a result, such accounting information is filed directly with the tax authority using Tax Return Form 6B. Therefore, in practice, taxpayers file accounting information directly with the tax authority and there is no further obligation to submit the same information to NBPRF. The information filed is stored in the tax authoritys database. When the Finnish competent authority receives a request concerning accounting information, it will first check if the information is available in the tax authoritys database, which will normally be the case. However, if the information is not filed by the taxpayer or if the information is not required to be filed by the taxpayers (e.g. underlying documentation), the competent authority makes use of its access powers under Sections 11 or 19 of the AAP and issues a notice to the relevant person holding the information to request for the information.
Banking information
185. Banking secrecy is provided for in the Act on Credit Institutions (121/2007) and financial institutions are prohibited from disclosing banking information to a third party unless it is specifically authorised in the law (Subsection 1 of Section 141). Subsection 2 of Section 141 of the Act on Credit Institutions further provides that a credit institution and an undertaking belonging to the same consolidation group with it shall be liable to disclose the information referred to in subsection 1 to a prosecuting and pre-trial investigation authority for the investigation of a crime as well as to another authority entitled to this information under the law. 186. Section 22 of the AAP specifically authorises the tax authority to obtain the information protected by secrecy laws, and so the competent authority can be considered as one of the authorities entitled to this information under the law as mentioned in Section 141 of the Act on Credit Institution. More specifically, section 22 of the AAP specifically provides that For purposes of this chapter, the parties concerned by the information-reporting requirement are to hand over the facts and information to the Tax Administration regardless of secrecy, confidentiality, or comparable restrictions. 187. In practice, when an incoming EOI request is pertaining to banking information held by a financial institution, the competent authority will use its information gathering powers under section 19 of the AAP and issue a notice to the banks at a centralised location. Every Finnish bank has its own centralised database and there is a single point of contact for the Finnish tax authority to request for the information.
188. If the account holder is not a resident in Finland, the case is handled by the Steering and Development Unit. Banks are usually given an answering time of two weeks. If the account holder has some connections to Finland, the request will be assigned to an auditor who will request the information from the bank. The difference in procedures is explained by practical reasons; if there is no link to Finland, the request is perceived as having no tax revenue impact in Finland and therefore, it can be handled directly by the Steering and Development Unit in order to speed up the process. 189. The competent authority has not encountered any difficulties in obtaining the required information from banks in Finland in the last three years. The input from Finlands EOI partners confirms that banking information was provided on a timely basis when requested. Over the three-year period under review there were 26 requests made for banking information. Generally, this information was made available within 90 days (63 days in average).
Use of information gathering measures absent domestic tax interest (ToR B.1.3)
190. The concept of domestic tax interest describes a situation where a contracting party can only provide information to another contracting party if it has an interest in the requested information for its own tax purposes. 191. While there is no explicit reference in section 19 of the AAP for the competent authority to use its access powers for purpose of fulfilling an incoming EOI request, there is no express restriction in the AAP to the use of access powers only in a domestic context. The Finnish authorities advised that the access powers under the AAP can be used to fulfil the obligations of an EOI agreement to which Finland has entered into. The use of the access powers under the AAP in the context of an EOI request from a foreign jurisdiction was clarified in a decision of the Supreme Administrative Court issued in 1996 (rec 4763/1/95, vol. 4063). The decision was related to the interpretation of Article 26 of the DTC between Finland and a foreign jurisdiction and whether the Finnish competent authority has powers to obtain banking information in the absence of a domestic tax interest in that information. The Court ruled that as the requested information was necessary for the assessment of the foreign companys taxes due in the foreign jurisdiction and no restriction was imposed for information exchange under Article 26(1) of the DTC, the Finnish bank did not have the right to refuse to provide the information to the Finnish tax authority. 192. This court case confirms that Finland does not have a domestic tax interest and the competent authority has powers to obtain information requested by its EOI partners notwithstanding the fact that Finland may not need the information for its own tax purposes. In the view of the Finnish authorities, the principles of this case would equally apply to TIEAs.
Compulsory powers (ToR B.1.4)

193. Under section 22a of the AAP, the tax authority can impose punitive fees if a person (i.e. the information holder) is found to have been negligent in its duty to provide the information to the tax authority under the AAP, as described below. The penalties provided in section 22a of AAP apply to any third-party holding the information; in all circumstances where the information is requested of the taxpayer, and he or she fails to provide it, the penalties in section 32 of the AAP apply instead (please see below). The penalties apply irrespective of whether the information is sought for domestic or foreign tax purposes. The tax authority can impose a punitive fee for negligence of up to EUR 2 000 (unless the case qualifies as one of the cases below); The tax authority can impose a punitive fee for negligence of up to EUR 5 000 if a party concerned by the information-reporting requirement has let an error or omission, characterised as important, be included in the relevant report, document or other carrier of information; or has not submitted any information until prompted. The tax authority can impose a punitive fee for negligence of up to EUR 15 000, if a party concerned by the information-reporting requirement has, to falsely fulfil the requirement, consciously let an error or omission be included in the relevant report, document or other carrier of information; or has not submitted any information at all.
194. During the period under review (2009-11), the Finnish tax authority did not need to apply the penalties provided under section 22a of the AAP, since all third-party information holders have provided information when requested by the tax authority. 195. Section 32 of the AAP establishes the following sanctions in case taxpayers fail to comply with tax reporting obligations: The tax authority may impose a surtax of up to EUR 150 if the taxpayer has filed a tax return or a comparable notice, document or filing containing a minor error or omission and in spite of being prompted, has neglected to correct the error or omission; or if the taxpayer has been late in submitting a notice, document or filing without an acceptable reason; The tax authority may impose a surtax of up to EUR 800 if the taxpayer has filed a return or a comparable notice, document or filing that has a major error or omission; or has not filed the same documents until prompted (proof of prompting to be shown);
The tax authority may impose a surtax of 30% of the taxable income and as appropriate a surtax amounting to 1% of the asset balance if the taxpayer has by way of intent or gross negligence, filed a return or a comparable notice, document or filing that has a major error or omission; or if the taxpayer has failed to submit any filing.
196. In addition, the tax authority may also request the assistance of the police under Section 93 of the AAP to search and seize documents directly from any persons if it is deemed necessary to obtain the required information.
Secrecy provisions (ToR B.1.5) Banking secrecy

197. The secrecy obligation for banks and other credit institution follows from the Act on Credit Institutions. The legal provisions in the AAP reviewed above (i.e. section 22 of the AAP) grant the tax authority the necessary powers to lift banking secrecy in order to reply to EOI requests.
Professional secrecy
198. The powers of the Finnish tax authority to access information under section 19 of the AAP (described in B.1.1 above) prevails over legal provisions on professional secrecy. An exception was recognised by the Finnish Parliament regarding with the duty of confidentiality of an attorney. This exception appears to be in line with section 21 of the Finnish Constitution which guarantees that a person must have the right to fair trial. 199. In Finland, there are two statutes dealing with professional secrecy applicable to attorneys: (i) the Advocates Act and (ii) the Code on Judicial Procedure. 200. Pursuant to section 5(c) of the Advocates Act, an attorney (advocate) may not disclose without consent or unlawfully disclose a secret of an individual or his/her family or a business or professional secret of which the attorney has become aware of in the course of his professional activity. This provision imposes an obligation on attorneys to maintain secrecy in relation to information they may become aware as part of his legal profession and not in relation to other activities attorney might conduct (e.g. company formation etc.). 201. The Code on Judicial Procedure provides for a list of persons that may not give evidence in a court procedure (Chapter 17, section 23). The list includes an attorney or counsel, in respect of information the client has entrusted to him or her for the pursuit of a case, unless the client gives consents to him or her to testify.

202. The Finnish Parliament, prior to the approval of the Assessment Act (the Act which preceded the current AAP), debated the scope of the access powers of the competent authority. The Parliament concluded that the tax authoritys access powers do not override the prohibition for an attorney or counsel to give evidence even in a case concerning the taxpayers economic affairs (Finance Committee Report 98/1994). 203. Considering the above-mentioned provision of the Code on Judicial Procedure and parliamentary discussions, the Finnish competent authority interpreted that its access powers under Sections 19 and 22 of the AAP are restricted by the professional legal privilege applicable to attorneys and counsels. According to the Finnish authorities, the secrecy duty applies solely to the information a client has entrusted the attorney for the purposes of a pending or forthcoming case. 204. The Finnish authorities have confirmed that legal privilege would only apply in the context of seeking or obtaining legal advice provided by attorneys and counsels. In this sense, the authorities confirmed that the legal privilege is not wide as to restrict access to information in case a lawyer acts, for instance, as a nominee shareholder, a trustee, a company director or under a power of attorney to represent a company in its business affairs. 205. The legal privilege in Finland, therefore, is in line with the requirements under the standard. 206. According to Finlands EOI partners, there does not seem to have been any case where a request for information was not answered due to secrecy provisions. The competent authority has also confirmed that they have never encountered problems accessing information held by third party even if it was held by attorneys and counsels.
B.2. Notification requirements and rights and safeguards

The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information.
Not unduly prevent or delay exchange of information (ToR B.2.1)

207. The Terms of Reference provides that rights and safeguards should not unduly prevent or delay effective exchange of information. For instance, notification rules should permit exceptions from prior notification (e.g. in cases in which the information request is of a very urgent nature or the notification is likely to undermine the chance of success of the investigation conducted by the requesting jurisdiction). 208. Under Finnish law, there is no obligation on the competent authority to notify the subject of a request for information. 209. Where the information sought is not in the possession of the competent authority, a notice would have to be issued to the holder of the information (e.g. a financial institution) to request for the information under section 19 of the AAP. The information sought must be clearly specified in the request to the holder of the information. There is no obligation under Finnish law to mention that the information is sought on behalf of a foreign tax authority. The competent authoritys guidelines do not include any recommendation on this and the practice varies. The Finnish authorities confirmed that the fact that the information is sought on behalf of a foreign tax authority is often mentioned in the notice sent to the holder. 210. The peer input received for this review confirms that there have not been any cases where rights and safeguards that apply to a person in Finland unduly prevented or delayed effective exchange of information. 211. There have been a couple of instances where persons filed court cases when they consider the access and exchange of information was not authorised under Finnish law. The court cases dated from 1996, 2004 and 2006. The Supreme Administrative Court has decided all three cases in favour of the Finnish competent authority, confirming the competent authoritys powers to access and exchange information. In the 1996 case, Finlands Supreme Administrative Court confirmed that the Finnish tax authority can access and exchange banking information pursuant to the terms of Finland domestic law and the DTC with a foreign jurisdiction. The second ruling concerned a request from a treaty partner for information on insurance holders in a Finnish insurance company which actively marketed boat insurances in the treaty partner jurisdiction. The Supreme Administrative Court ruled in 2004 that the tax authority has the right to obtain such information and can on basis of the Nordic Mutual Assistance Agreement exchange it with its

treaty partner. The third case in 2006, referred to whether the information to be exchanged constituted a business secret. A treaty partner had requested Finland to provide information on business transactions and payment details between a company in Finland and a company in another country. The Supreme Administrative Court ruled that such information could not be considered business secret and, as such, it could be exchanged with the other competent authority.
COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION 63
C. Exchanging Information
Overview
212. Jurisdictions generally cannot exchange information for tax purposes unless they have a legal basis or mechanism for doing so. A jurisdictions practical capacity to effectively exchange information relies both on having adequate mechanisms in place as well as an adequate institutional framework. This section of the report assesses Finlands network of exchange of information agreements against the standards and the adequacy of its institutional framework to achieve effective exchange of information in practice. 213. Finland has an extensive treaty network allowing for exchange of information for tax purposes, and is currently engaged in additional treaty negotiations as well as renegotiations of its older treaties. Finland has EOI arrangements with 119 jurisdictions; 71 of these arrangements are DTC and 39 are TIEA. The remaining jurisdictions are parties to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (Multilateral Convention) and/or the Nordic Mutual Assistance Convention on Mutual Administrative Assistance in Tax Matters (the Nordic Convention). Out of the 71 DTCs signed by Finland, six are not in force (Uruguay, Barbados (protocol), Belgium (protocol) and Switzerland (protocol), Cyprus 11 and Tajikistan). Out of the 39 signed TIEAs, nine are not in force (Belize, Brunei, Costa Rica,
11. Note by Turkey: The information in this document with reference to Cyprus relates to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Turkey recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of the United Nations, Turkey shall preserve its position concerning the Cyprus issue. Note by all the European Union Member States of the OECD and the European Union: The Republic of Cyprus is recognised by all members of the United Nations with the exception of Turkey. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus.
64 COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION

Dominica, Guatemala, Jamaica, Liberia, Panama and Samoa). Finland has taken all domestic procedures to bring those treaties into force. As an EU member, Finland is also able to exchange information with its 214. EU counterparts under the scope of EU Council Directive 2011/16/EU. The articles in this Directive are in line with the international standard. Finland is also involved in automatic exchange of information with a number of EOI partners (when the EOI instrument so provides) and with other EU member states under the EU Council Directive 2003/48/EC in respect of savings interest and under EU Regulations on administrative co-operation in the fields of VAT and excise. 215. Finland still actively seeks to expand its exchange of information network. The Finnish competent authority has recently commenced negotiations with several jurisdictions under the auspices of the Joint Nordic TIEA co-operation to establish TIEAs and has approached others noting its desire to enter into negotiations to establish TIEAs. On average, it takes somewhere between 3 to 6 months before a TIEA or DTC is ratified in Finland. 216. The 1989 Nordic Convention, which is in force with respect to Denmark, the Faroe Islands, Finland, Greenland, Iceland, Norway and Sweden, contains detailed provisions on the exchange of information on request for tax purposes. It also contains provisions concerning automatic and spontaneous exchange; simultaneous examinations; service of documents; presence and participation of representatives from requesting jurisdictions at examinations; and recovery of tax. 217. In 1989, Finland became a signatory to the Multilateral Convention. The Multilateral Convention provides for all possible forms of administrative co-operation between states in the assessment and collection of taxes, in particular with a view to combating tax avoidance and evasion. Finland is also a signatory to the protocol to this convention, and it already entered in force on 1 June 2011. 218. A domestic tax interest requirement does not exist in Finland and there are no restrictions in the Finnish legislation as regards the authorities powers to access information held by banks. Notwithstanding the above, such limitations might exist in some of Finlands partner jurisdictions. Finland is aware of this risk and embarked on an ambitious programme to renegotiate its older treaties to incorporate provisions akin to Article 26(4) or (5) of the OECD Model Tax Convention. This is to allow exchange information with these treaty partners to meet the international standard. Finland has already completed the process for all its treaties that required Article 26(5) to fully meet the international standard (to due limitations existing in the partner jurisdictions domestic laws) with the exception of one DTC, which Finland is in midst of renegotiation.
219. All EOI articles in Finlands agreements contain confidentiality provisions and Finlands domestic legislation contains relevant confidentiality provisions. These provisions apply equally to all information in the requests received as well as to responses received from counterparts. 220. Finlands agreements ensure that the contracting parties are not obliged to provide information which would disclose trade, business, industrial, commercial or professional secrets or information which is the subject of attorney client privilege or to make disclosures which would be contrary to public policy. 221. Regarding the effectiveness of exchange of information, Finlands competent authority has adequate resources to exchange information effectively: there is sufficient professional staff with clear responsibility for processing requests and retrieving information; the staff members have adequate expertise and training specific to exchange of information; and Finland has adequate financial and technical resources dedicated to fulfil its exchange of information obligations. 222. Responses received from Finlands exchange of information partners suggest that Finlands practices in terms of exchange of information are of a very high standard. Peer jurisdictions consider Finland to be a reliable, efficient and cooperative exchange of information partner. Finland receives a relatively high volume of requests and replies to the vast majority of those requests within 90 days. A few requests that involved issues that were more complex were responded to within 180 days.
C.1. Exchange-of-information mechanisms

Exchange of information mechanisms should allow for effective exchange of information.
223. There is a variety of instruments bilateral and multilateral agreements as well as EU Directives and Regulations through which Finland can assist other tax authorities and seek assistance from them in relation to both direct and indirect tax liabilities. These include: Double taxation agreements (DTCs) and a tax information exchange agreement (TIEA); The Multilateral Convention; The EU Council Directive 2011/16/EU of 15 February 2011 on administrative co-operation in the field of taxation, replacing Council Directive 77/799/EEC concerning mutual assistance by the competent authorities of the Member States of the EU in the field of direct taxation and taxation of insurance premiums;

Directive 2010/24/EU on mutual assistance by the EU Member States for the recovery of claims relating to certain levies, duties, taxes and other measures; Council Regulation (EU) No 904/2010 of 7 October 2010 on administrative cooperation and combating fraud in the field of value added tax; and Council Directive 2003/48/EC on taxation of saving income in the form of interest payments; The Nordic Convention.
224. In addition to DTCs and TIEAs, Finland is a signatory of the Multilateral Convention developed by the OECD and the Council of Europe. The updated Multilateral Convention incorporates international standard for exchange of information in tax matters. Whilst this report is focused on the terms of its EOI agreements and practices concerning the exchange of information on request, it is noted that the updated Multilateral Convention explicitly allows spontaneous and automatic exchange of information as well. 225. When two or more arrangements for the exchange of information for tax purposes exist between Finland and a treaty partner, the parties may choose the most appropriate agreement under which to exchange the information. There are no domestic rules in Finland requiring it to choose between mechanisms where it has more than one agreement involving a particular partner and, thus, the competent authority is free to invoke all of the available mechanisms or to choose the most appropriate, unless otherwise provided in the EOI mechanism itself.
Other forms of exchange of information and co-operation

226. Finland is actively engaged in many different types of tax co-operations with its partners. For instance, Finland is involved in various simultaneous tax audit projects and to date, has participated in simultaneous tax audits with Estonia, Lithuania, Germany, Latvia, Denmark, Poland, Spain, the United Kingdom, Ireland, the Netherlands, the Czech Republic and Austria. 227. A cooperation group on improving information exchange with Russia was set up by the Director Generals of both tax authorities in 2009. The aim of this group is to improve the exchange of information flow between Finland and Russia with a special focus on automatic information exchange. 228. Finland has also participated in many international information exchange initiatives in the area of automatic information exchange. For example, Finland is a member of the EU Commission Committee on Administrative Cooperation in Taxation and participates in a working group created to set
the standard for automatic information exchange in order to implement the new provisions of the EU Council Directive 2011/16/EU. On the Nordic level, Finland leads the working group Automatic Exchange of Information within the Nordic countries with the aim of improving the effective use of automatically exchanged information and the using the information in pre-completed tax returns for taxpayers. To meet the objectives set out by the EU and Nordic project, Finland has established an internal project to define and make the necessary changes required to its own databases.
Foreseeably relevant standard (ToR C.1.1)

229. The international standard for exchange of information envisages information exchange upon request to the widest possible extent. Nevertheless it does not allow fishing expeditions, i.e. speculative requests for information that have no apparent nexus to an open inquiry or investigation. The balance between these two competing considerations is captured in the standard of foreseeable relevance which is included in Article 26(1) of the OECD Model Tax Convention set out below: The competent authorities of the contracting states shall exchange such information as is foreseeably relevant to the carrying out the provisions of this Convention or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the contracting states or their political subdivisions or local authorities in so far as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Articles 1 and 2. 230. Finlands DTCs are patterned after the OECD Model Tax Convention and its commentary as regards the scope of information that can be exchange. DTCs signed or amended by protocol after 2005 generally use the term foreseeably relevant. 20 out of 71 DTCs signed by Finland uses the term foreseeably relevant (DTCs signed with Armenia, Australia, Austria, Barbados (not in force), Belarus, Belgium (not in force), Canada, China, Georgia, Cyprus, India, Kazakhstan, Luxembourg, Moldova, Poland, Singapore, Switzerland, Tajikistan, Turkey, Uruguay (not in force)). 231. Finlands older DTCs usually use the term as is necessary or as is relevant in lieu of foreseeably relevant. It is the case for 51 out of the 71 DTCs signed by Finland. The terms as is necessary and as is relevant are recognised in the commentary to Article 26 of the OECD Model Tax Convention to allow for the same scope of exchange as does the term foreseeably relevant. 232. All of Finlands 39 TIEAs are modelled after the OECD Model TIEA and use the term foreseeably relevant.
In respect of all persons (ToR C.1.2)

233. For exchange of information to be effective, it is necessary that a jurisdictions obligation to provide information is not restricted by the residence or nationality of the person to whom the information relates or by the residence or nationality of the person in possession or control of the information requested. For this reason, the international standard for exchange of information envisages that exchange of information mechanisms will provide for exchange of information in respect of all persons. 234. Fifty-five of Finlands 71 DTCs as well as all its 39 TIEAs provide for exchange of information with respect to all persons. None of these agreements restricts the jurisdictional scope of the exchange of information provisions to certain persons, for example those considered resident in one of the contracting parties. 235. The scope of the DTC signed with 16 jurisdictions (Bosnia and Herzegovina, Bulgaria, Croatia, Egypt, France, Germany, Ireland, Japan, Kosovo, Montenegro, Portugal, Spain, Serbia, Tanzania, the United Arab Emirates and the United Kingdom) is limited to persons covered by the convention. However, these DTCs note that information is to be exchanged for carrying out the provisions of the domestic laws. As non-residents are under the scope of the Finnish legislation, these DTCs provide for the exchange of information in respect of all persons.
Obligation to exchange all types of information (ToR C.1.3)

236. Jurisdictions cannot engage in effective exchange of information if they cannot exchange information held by financial institutions, nominees or persons acting in an agency or a fiduciary capacity. The OECD Model Tax Convention, which is an authoritative source of the standard, stipulates that bank secrecy cannot form the basis for declining a request to provide information and that a request for information cannot be declined solely because the information is held by nominees or persons acting in an agency or fiduciary capacity or because the information relates to an ownership interest. 237. Twenty-two of Finlands 71 DTCs and Protocol to the DTCs include provisions akin to Article 26(5) of the OECD Model Tax Convention, which provides that a contracting party may not decline to supply information solely because the information is held by a bank, other financial institution, nominee or person acting in an agency or a fiduciary capacity or because it relates to ownership interests in a person. Finlands policy is to include Article 26(5) in all of its new agreements. 238. Although Finlands older DTCs do not include such a provision, there are no limitations in Finlands laws with respect to access to banking information, information held by nominees, and ownership and identity
information. There may be, however, such limitations in place in the domestic laws of some of its treaty partners. In these cases, the absence of a specific provision requiring exchange of banking information unrestricted by banking secrecy may serve as a limitation on the exchange of information which can occur under the relevant DTC. Finland is aware of this risk and has negotiated all its old treaties with countries that may need a provision similar to Article 26(5) of the OECD Model Tax Convention to exchange banking information, with exception of one DTC, which Finland is in midst of renegotiation. The DTC with Malaysia does not contain the model Article 26(5) and Finland is unable to request for banking information from Malaysia until the treaty is renegotiated. Finland has started to renegotiate a new DTC with Malaysia in November 2011 to address this issue. Finland is encouraged to continue to its efforts to monitor the effectiveness of the exchange of information with its treaty partners and, if necessary, renegotiate older DTCs. All new treaties signed by Finland already contain provisions akin to Article 26(5) of the OECD Model Tax Convention. 239. All of Finlands 39 TIEAs include the provisions contained in Article 5 paragraphs (a) and (b) of the OECD Model TIEA, obliging the contracting parties to exchange all types of information.
Absence of domestic tax interest (ToR C.1.4)

240. The concept of domestic tax interest describes a situation where a contracting party can only provide information to another contracting party if it has an interest in the requested information for its own tax purposes. An inability to provide information based on a domestic tax interest requirement is not consistent with the international standard. Contracting parties must use their information gathering measures even though invoked solely to obtain and provide information to the other contracting party. 241. Twenty-two of Finlands DTCs contain provisions akin to Article 26(4) of the OECD Model Tax Convention, obliging the contracting parties to use information-gathering measures to exchange requested information without regard to a domestic tax interest. All of Finlands 39 TIEAs allow information to be obtained and exchanged notwithstanding it is not required for any domestic tax purpose. 242. Finlands older DTCs do not contain such a provision. There are, however, no domestic tax interest restrictions on the competent authorities powers to access information for exchange of information purposes. Finland is able to exchange information, including in cases where the information is not publicly available or already in the possession of the governmental authorities.

243. A domestic tax interest requirement may however exist in some of Finlands partner countries. In such cases, the absence of a specific provision requiring exchange of information unrestricted by domestic tax interest may serve as a limitation on the exchange of information. Finland is aware of this risk and has actively pursued to renegotiate its old treaties to incorporate provision akin to Article 26(4) of the OECD Model Tax Convention whenever necessary. Moreover, all new treaties signed by Finland already contain provisions akin to Article 26(4) of the OECD Model Tax Convention. Finland is encouraged to continue to its efforts to monitor the effectiveness of the exchange of information with its treaty partners and, if necessary, renegotiate older DTCs.
Absence of dual criminality principles (ToR C.1.5)

244. The principle of dual criminality provides that assistance can only be provided if the conduct being investigated (and giving rise to an information request) would constitute a crime under the laws of the requested country if it had occurred in the requested country. In order to be effective, exchange of information should not be constrained by the application of the dual criminality principle. 245. There are no dual criminality requirements in Finlands agreements for exchange of information in tax matters.
Exchange of information in both civil and criminal tax matters (ToR C.1.6)
246. Information exchange may be requested both for tax administration purposes and for tax prosecution purposes. The international standard is not limited to information exchange in criminal tax matters but extends to information requested for tax administration purposes (also referred to as civil tax matters). 247. All of Finlands exchange of information agreements provide for exchange of information in both civil and criminal tax matters.
Provide information in specific form requested (ToR C.1.7)

248. Exchange of information mechanisms should allow for the provision of information in the specific form requested (including depositions of witnesses and production of authenticated copies of original documents) to the extent possible under a jurisdictions domestic laws and practices. 249. There are no restrictions in the exchange of information provisions in Finlands DTCs that would prevent Finland from providing information in a specific form, as long as this is consistent with its own administrative practices.
250. Protocol to the DTC with the United States (2006) includes a specific clause to reinforce the need to provide information in the form requested (in the form of depositions or witnesses and copies of unedited original documents).
In force (ToR C.1.8)

251. Exchange of information cannot take place unless a jurisdiction has exchange of information arrangements in force. Where exchange of information agreements have been signed, the international standard requires that jurisdictions must take all steps necessary to bring them into force expeditiously. 252. Finland has an extensive EOI network covering 119 partners, 71 of them being covered by DTCs, 39 by TIEAs. The remaining jurisdictions are parties to the Multilateral Convention and/or the Nordic Convention. 253. Pursuant to the Finnish Constitution, all signed international tax agreements has to be tabled for the Parliaments approval. After approved by the Parliament, the agreement is ratified by the President. After completing all the necessary steps, Finland informs its treaty partner officially and the agreement enters into force by way of a Regulation. 254. The Finnish authorities advised that in practice, the time taken for the ratifications of a DTC or TIEA depends largely on the time of the year the agreement is tabled to the Parliament for approval. If the signed agreement is presented to the Parliament in autumn, the Finnish authority has advised that it would usually take a longer time for the Parliament to approve the agreement as the Parliament is usually preoccupied with the debate on the governments budget. On average, it takes between 3 to 6 months before a TIEA or DTC is ratified. 255. Of the 39 TIEAs signed, 9 are not in force. Of the 9 TIEAs that are not in force, one is signed in 2009 (Samoa), three are signed in 2010 (Dominica, Belize and Liberia), one is signed in 2011 (Costa Rica) and four are signed in 2012 (Brunei, Guatemala, Jamaica and Panama). Of the 71 DTCs, four are not in force (Barbados (protocol signed in November 2011), Belgium (protocol signed in September 2009), Switzerland 12 (protocol signed in September
12. The earlier protocol signed between Finland and Switzerland in September 2009 required the requesting party to provide the name and address of the taxpayer and the name and address of the holder of information when making an EOI request. These requirements were deemed unduly restrictive and were considered inconsistent with the standard. The new protocol of September 2012 rectifies this issue. The Protocol between Finland and Switzerland of September 2012 did not require any parliamentary approval from the Swiss side in line with the

2012), Cyprus (DTC signed in November 2012) and Tajikistan (DTC signed in October 2012). Finland has taken all domestic procedures to bring those treaties into force. Finland has also ratified the amended Multilateral Convention and it is in force since 1 June 2011.
Be given effect through domestic law (ToR C.1.9)

256. For exchange of information to be effective, the contracting parties must enact any legislation necessary to comply with the terms of the agreement. 257. All Finlands EOI agreements that have been signed and ratified by both parties are in effect in Finland. Moreover, Finlands competent authority has a developed legal and institutional framework that supports effective exchange of information. Clear procedures are followed by EOI staff for processing, co-ordinating and responding to incoming requests.
C.2. Exchange-of-information mechanisms with all relevant partners

The jurisdictions network of information exchange mechanisms should cover all relevant partners.
258. Ultimately, the international standard requires that jurisdictions exchange information with all relevant partners, meaning those partners who are interested in entering into an information exchange arrangement. Agreements cannot be concluded only with counterparties without economic significance. If it appears that a jurisdiction is refusing to enter into agreements or negotiations with partners, in particular ones that have a reasonable expectation of requiring information from that jurisdiction in order
Federal Decree approved by the Swiss parliament in December 2011. Finland sent a notification to Switzerland on 3 January 2013 concerning the entry into force on 3 February 2013. The Protocol will apply retrospectively since the entry into force of the Protocol of September 2009.
to properly administer and enforce its tax laws it may indicate a lack of commitment to implement the standard. 259. Finland has 114 EOI agreements that provide for effective exchange of information in tax matters. These agreements are with counterparties, which represent: all of its major trading partners and main investors; 99 of the 117 Global Forum Member jurisdictions; all EU member States; 13 18 of the G20 jurisdictions; and 33 of the 34 OECD member economies.
It is evident that Finland has an extensive treaty network allowing for 260. exchange of information for tax purposes. More recently, Finland has taken an active role in collaboration with other Nordic countries to expand its treaty network. While the Nordic countries still remain Finlands main EOI partners, 261. exchange of information among other neighbouring countries (Estonia and Russia) with which Finland has close economic relations have increased significantly over the years. 262. Comments were sought from the jurisdictions participating in the Global Forum in the course of the preparation of this report, and no jurisdiction advised the assessment team that Finland had refused to negotiate or conclude an information exchange agreement with it. In summary, Finlands network of information exchange agreements covers all relevant partners.
Nordic TIEA co-operation

263. Joint Nordic TIEA co-operation began in 2006 with the objective of co-ordinating the Nordic approach for entering into TIEAs with jurisdictions identified as tax havens in the 2000 OECD report Harmful Tax Competition: An Emerging Global Issue. In order to strengthen the Nordic negotiating position and to keep costs for this work down, the Nordic countries co-ordinate their negotiation work under the auspices of the Nordic Council of Ministers. The Faroe Islands and Greenland also independently take part in this work. 264. A steering group of representatives from all Nordic countries coordinates the negotiation efforts. Participants in the steering group are experts with
13. EU Council Directive 2011/16/EU of 15 February 2011 on administrative co-operation in the field of taxation.

experience from their finance ministries, as well as experience in national and international work in the field of tax evasion. Negotiations are carried out by a team comprising a project leader and one or more representatives from the other countries. The actual information exchange agreements are however entered into on a bilateral basis because of constitutional reasons. Nordic cooperation in TIEA negotiations has reaped great success. Resulting from this co-operation, Finland has signed 39 TIEAs to the standard since 2007, 30 of which are in force (see Annex 2 to this report for details).
Phase 1 determination The element is in place. Factors underlying recommendations Recommendations Finland should continue to develop its exchange of information network with all relevant partners. Phase 2 rating Compliant.
C.3. Confidentiality
The jurisdictions mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received.
Information received: disclosure, use, and safeguards (ToR C.3.1)

265. Governments would not engage in information exchange without the assurance that the information provided would only be used for the purposes permitted under the exchange mechanism and that its confidentiality would be preserved. Information exchange instruments must therefore contain confidentiality provisions that spell out specifically to whom the information can be disclosed and the purposes for which the information can be used. In addition to the protections afforded by the confidentiality provisions of information exchange instruments, jurisdictions with tax systems generally impose strict confidentiality requirements on information collected for tax purposes. 266. The provisions governing confidentiality are based on Article 26(2) of the OECD Model Tax Convention (in its successive versions, depending on the date of signature of the treaty in question) or on article 8 of the OECD
Model TIEA, according to which any information received by a Contracting State shall be treated as secret in the same manner as information obtained under the domestic laws of that State. 267. All DTCs and TIEAs signed by Finland have secrecy provisions ensuring that all information received will be kept secret. The majority of Finlands DTCs and a TIEA provide that the information obtained in the course of a request for assistance should be accessible only to persons directly concerned with or involved in the assessment of the taxes, or the administrative control of that assessment. This term embraces taxpayers, their representatives, the tax authority, and judges of the tax courts. 268. The Council Directive 77/799/EEC, the Nordic Convention and the EU/OECD Convention also contain safeguards corresponding to those in Article 26(2) of the OECD Model Tax Convention, restricting the disclosure of information by the competent authority of the receiving state. 269. The confidentiality provisions of Finlands DTCs are backed by general confidentiality provisions in Finlands domestic tax legislation. More specifically, section 4 of Act on the Public Disclosure and Confidentiality of Tax Information provides that Taxation documents concerning a taxpayers financial position and any other taxation documents containing information on an identifiable taxpayer are confidential with the exception provided in sections 5 to 9 and 21. The exceptions provided in sections 5 to 9 and 21 generally relates to information that are publicly available or publicly available under the Business Information System (BIS system). The Criminal Code punishes the violation of a secrecy duty with a fine or imprisonment for a maximum term of one year (chapter 38, section 1 and chapter 40, section 5). 270. Access to the premises of tax authority (including the units dealing with EOI) is restricted to authorised persons only. Moreover, the access to Finlands EOI database and systems are also restricted to authorised users only. The competent authority also adopts a clean desk policy where all incoming requests and underlying documentation is stored in the protected electronic system and all paper copies are destroyed. The EOI database is only accessible to persons working directly with EOI matters.
All other information exchanged (ToR C.3.2)

271. The confidentiality provisions in Finlands exchange of information agreements and domestic law do not draw a distinction between information received in response to requests or information forming part of the requests themselves. As such, the Finnish authorities consider that section 4 of Act on the Public Disclosure and Confidentiality of Tax Information protects both domestic and foreign taxpayers and apply equally to all requests for information, background documents to such requests, and any other document

reflecting information, including communications between the requesting and requested jurisdictions and communications within the tax authorities of either jurisdiction.
C.4. Rights and safeguards of taxpayers and third parties

The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties.
Exceptions to requirement to provide information (ToR C.4.1)

272. The international standard allows requested parties not to supply information in response to a request in certain identified situations. Among other reasons, an information request can be declined where the requested information would disclose confidential communications protected by attorney-client privilege. Attorney-client privilege is a feature of the legal systems of many countries. 273. All of the agreements concluded by Finland incorporate wording modelled after Article 26(2) of the OECD Model Tax Convention or Article 8 of the OECD Model TIEA providing that requested jurisdictions are not obliged to provide information which would disclose any trade, business, industrial, commercial or professional secret or information which is the subject of attorney-client privilege/legal privilege or information the disclosure of which would be contrary to public policy. Moreover, the attorney-client privilege in Finland meets the international standard (see B.1.5). 274. Inputs from Finlands EOI partners received in the course of the peer review appears to confirms that there have been no cases where rights and safeguards that apply to a person in Finland unduly prevented or delayed effective exchange of information. 275. There have been three instances where persons have pursued cases in court aiming at impeding exchange of information. The Supreme Administrative Court has decided all three cases in favour of the Finnish competent authority, confirming the competent authoritys powers to access and exchange information in the specific cases (see section B.2 of this report).

C.5. Timeliness of responses to requests for information

The jurisdiction should provide information under its network of agreements in a timely manner.
Responses within 90 days (ToR C.5.1)

276. In order for exchange of information to be effective it needs information to be provided in a timeframe which allows tax authorities to apply the information to the relevant cases. If a response is provided after a significant lapse of time the information may no longer be of use to the requesting authorities. This is particularly important in the context of international cooperation as cases in this area must be of sufficient importance to warrant making a request. 277. There are no provisions in Finlands laws or in its DTCs pertaining to the timeliness of responses or the timeframe within which responses should be provided. Finlands TIEAs include an obligation to either respond to the request, or provide a status update within 90 days of receipt of the request. There is no legal restriction on the ability of Finlands competent authority to respond to requests within 90 days of receipt by providing the information requested or by providing an update on the status of the request. 278. In 2009, 2010 and 2011, Finland received a total of 220 requests for information on direct taxation matters (59 in 2009, 100 in 2010, 61 in 2011). Finland counts as one request a request concerning a single taxpayer even when more than one piece of information is requested. Finland also received 396 requests for information on indirect tax matters in that period. 279. Finlands main EOI partners are Estonia, Norway, Russia and Sweden. 280. Out of the 220 incoming requests, Finland was in position to provide an answer within 90 days in 93.2% of the cases and within 180 days in 4.6% of the cases. No cases took more than one year for Finland to furnish a reply.

Fulfilled within Year 2009 2010 2011 Total 90 days 52 96 57 205 10 4 2 4 More than 180 days 365 days 365 days Pending Declined Total 3 2 0 5 0 0 0 0 0 0 0 0 0 0 0 0 59 100 61 220
281. The Finnish authorities do not systematically provide up-dates, due to the fact that there have been few requests where they have not been able to provide the requested information within 90 days. Updates are sent, however, whenever the authorities deem necessary (i.e. sometimes even before a 90-day period has elapsed). However, the Finnish authorities advised that in the beginning of 2013 when the new EU Directive comes in force, they will always send an update if they are not able to respond within the time limits of the EU Directive or the relevant EOI instrument (in case of EOI with non-EU members). Inputs from Finlands EOI partners received in the course of the peer 282. review reveals that the responses received from Finland are of very high quality. Finland responded to almost all EOI requests within 90 days, and Finland took more than 180 days to reply in only in five complex cases. Finland also proactively took efforts to clarify on EOI request if the requests were unclear or when Finland needed more information from the requesting state before a reply could be furnished.
Organisational process and resources (ToR C.5.2)

283. Finland does not have a single unit that handles all international information exchange. Incoming EOI requests are divided between different units and each individual unit is competent to exchange information for matters that fall within its purview as described in the working order of the tax authority. 284. Most incoming EOI requests are processed in the Tax Auditing Unit. At the central level (known as the Steering and Development Unit, International Group), the unit is staffed by seven full time officers working on international exchange of information. Approximately 2.5 officers are assigned to deal with direct taxation matters while the other 3.5 officers are assigned to deal with indirect taxation matters. One officer is responsible for simultaneous audits and international audit projects. 285. EOI requests pertaining to information that is readily available in the databases maintained by the NBPRF or the tax authority are usually answered directly at the central level in most cases, the Steering and
Development Unit. The Finnish competent authority advised that generally an answer can be provided within a week, sometimes even during the same day. 286. Incoming requests regarding direct taxation (and indirect taxation if the legal basis for the request is any other agreements other than the EU regulation) are reviewed at the Steering and Development Unit before it is assigned to a designated persons in the international network (regional level) to gather the requisite information. If the request is based on the EU regulation No. 904/2010 (VAT), the competency to deal with the request is delegated to the regional office. This means the regional office will send the reply directly to the requesting EU member state without going through the Steering and Development Unit. 287. The international network consists of regional audit directors and tax auditors specialised in international EOI. The tax auditors specialising in international EOI referred to contact persons within the international network. Participants in the international network come from five regional units. In all these units, there are generally two to four appointed contact persons. The total number of contact persons in Finland is 23. All the contact persons are experienced tax auditors and they also work on other tax audits with the exception of the contact persons from the Uusimaa, the largest region in Finland where a contact person works full time on international EOI matters.
System to track EOI request VAPU system

288. Since 2007, Finland has implemented an IT system known as VAPU to keep track of all incoming and outgoing EOI requests. VAPU provides users with a searchable database that enables the tracking of the basic information about an EOI request (e.g. reference number, country, taxpayer concerned). VAPU also enables users to keep track of actions that have been taken on a case and the deadlines to reply to an EOI request. The ability to keep track of deadlines is important as Key Performance Indicators (KPIs) are put in place in Finland for replying to incoming EOI request within a specified timeframe. 289. The KPIs requires the tax auditing unit to reply to an EOI request within a specified timeframe set under the EOI agreement itself or agreed internally by the tax authority. For EOI request under DTCs and TIEAs, it was revealed that the tax authority has set a target of eight weeks for the regional level to provide a reply. For EOI request under the EU instruments, the answering time ranges between one and six months depending on whether the information is already in the possession of the tax authority (as stipulated in the instrument). Finland has decided to follow even stricter timeframes internally. In 2011, the Finnish competent authority managed to achieve 98% compliance with the KPI set for providing a reply to an EOI request.

290. The Finnish authority advised that the use of the VAPU system has enabled Finlands competent authority to improve its effectiveness and efficiency significantly because the VAPU system helps to: minimise differences in practice and standardise operating procedures in the five regions; create a unique and automated reference number for each incoming EOI request; allow all data relating to a request to be accessible anywhere where a computer is connected to the tax authoritys network; manage access rights to the information stored in the system; create a status update on the progress of any EOI request; and keep track of deadline and timeframe for providing a reply.
EOI Manual
291. Finlands manual is based on the OECD manual and concerns both incoming and outgoing requests. The manual takes into account all kinds of information exchange regardless of legal basis, i.e. both direct and indirect taxation. Finland has also prepared a quick-guide that is intended for any tax auditor handling EOI matters. It concentrates only on the most important issues to keep in mind when preparing a request for information or sending spontaneous information. Both the manual and the quick guide are available on the tax authoritys intranet.
Training provided to personnel

292. New officials joining the tax auditing units are introduced to the international EOI work through practical on-the-job training. New officials are introduced to the legal basis for engaging in international EOI and to the different international organisations involved in EOI in tax matters. New officials also receive training to familiarise themselves with the software used by the tax authority (tax authoritys databases, VAPU etc.). After the basic training is completed, new officials will start working on exchanges with the close guidance of a more experienced colleague. 293. The tax auditing unit organises biannual meetings where updates on the latest development within the EOI area are shared with the tax auditors from different regions. The meeting also provides the opportunity for the tax auditors from different regions to discuss problems they have encountered and allow them to exchange experience and share best practices. Specialised
training is also provided whenever needed to equip the tax auditors with any specialised skills needed to better handle an incoming EOI request.
Conclusion
294. Overall, it appears that Finland has in place a robust and working organisational process and has put in place adequate resources to deal with the demands of EOI requests received from its treaty partners. None of Finlands EOI partners has raised issues with regard to the timeliness of information provided by Finland.
Absence of restrictive conditions on exchange of information (ToR C.5.3)

295. There are no laws or regulatory practices in Finland that impose unreasonable, disproportionate, or unduly restrictive conditions on exchange of information.
Phase 1 determination This element involves issues of practice that are assessed in the Phase 2 review. Accordingly no Phase 1 determination has been made. Phase 2 rating Compliant.
SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS 83
Summary of Determinations and Factors Underlying Recommendations

Determination Factors underlying recommendations Recommendations
Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities (ToR A.1) Phase 1 determination: The element is in place. Phase 2 rating: Compliant. Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements (ToR A.2) Phase 1 determination: The element is in place. Phase 2 rating: Compliant. Banking information should be available for all account-holders (ToR A.3) Phase 1 determination: The element is in place. Phase 2 rating: Compliant. Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information) (ToR B.1) Phase 1 determination: The element is in place. Phase 2 rating: Compliant.
84 SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS

Factors underlying recommendations
Determination
Recommendations
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information (ToR B.2) Phase 1 determination: The element is in place. Phase 2 rating: Compliant. Exchange of information mechanisms should allow for effective exchange of information (ToR C.1) Phase 1 determination: The element is in place. Phase 2 rating: Compliant. The jurisdictions network of information exchange mechanisms should cover all relevant partners (ToR C.2) Phase 1 determination: The element is in place. Finland should continue to develop its exchange of information network with all relevant partners.
Phase 2 rating: Compliant. The jurisdictions mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received(ToR C.3) Phase 1 determination: The element is in place. Phase 2 rating: Compliant. The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties (ToR C.4) Phase 1 determination: The element is in place. Phase 2 rating: Compliant.
SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS 85
Determination
Factors underlying recommendations
Recommendations
The jurisdiction should provide information under its network of agreements in a timely manner (ToR C.5) This element involves issues of practice that are assessed in the Phase 2 review. Accordingly no Phase 1 determination has been made. Phase 2 rating: Compliant.
ANNEXES 87
Annex 1: Jurisdictions Response to the Review Report 14

Finland would like to express its appreciation for the excellent work done by the assessment team as well as by the team of expert assessors in evaluating Finlands exchange of information. Finland would also like to thank the Peer Review Group and our exchange of information partners for their valuable contributions to the review. Finland agrees with the findings of the report and find that the conclusions drawn are fair and finds that the report and ratings correctly reflects the situation of exchange of infor-mation in Finland. Finland is fully committed to effective exchange of information. Finland has a long history of exchanging information for tax purposes and has an extensive network of EOI arrange-ments to meet these aims. Finland will continue to expand its network of EOI arrange-ments with relevant partners.
14.
This Annex presents the jurisdictions response to the review report and shall not be deemed to represent the Global Forums views.
88 ANNEXES
Annex 2: List of All Exchange of Information Mechanisms
Multilateral agreements
Finland is party to the: The Multilateral Convention on Mutual Administrative Assistance in Tax Matters (MAC) was signed 11 December 1989 and entered into force 1 April 1995. The 2010 Protocol amending the MAC was signed on 27 May 2010 and entered into force 01 June 2011. The status of the multilateral Convention is set out in the below table. 15 EU Council Directive 2011/16/EU of 15 February 2011 on administrative co-operation in the field of taxation. This Directive is in force since 11 March 2011 and repeals EU Council Directive 77/799/ EEC of 19 December 1977 with effect from 1 January 2013. All EU member states are required to transpose it into national legislation by 1 January 2013. The current EU member states, covered by this Directive, are: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, and the United Kingdom. EU Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments. This Directive aims at ensuring: (i) that savings income in the form of interest payments in favour of individuals or residual entities being resident of an EU Member State are effectively taxed in accordance with the fiscal laws of their state of residence; and (ii) that information is automatically exchanged among EU member states with respect to such payments.
15.
The updated table is available at www.oecd.org/dataoecd/8/62/48308691.pdf.
ANNEXES 89
EU Council Regulation (EU) No 904/2010 of 7 October 2010 on administrative cooperation and combating fraud in the field of value added tax. Nordic Mutual Assistance Convention on Mutual Administrative Assistance in Tax Matters of 7 December 1989, which is currently in force with respect to Denmark, Faroe Islands, Finland, Greenland, Iceland, Norway and Sweden.
Bilateral and multilateral agreements

No. 1 2 3 4 5 6 7 Jurisdiction Andorra Anguilla Antigua and Barbuda Argentina Armenia Aruba Australia Type of EOI agreement TIEA TIEA TIEA DTC MAC DTC TIEA DTC MAC DTC 8 Austria DTC Protocol EU Directive 2011/16/EU DTC MAC (original) TIEA TIEA DTC DTC Protocol DTC Date signed 24 Feb 2010 14 Dec 2009 19 May 2010 13 Dec 1994 3 Nov 2011 16 Oct 2006 10 Sep 2009 20 Nov 2006 3 Nov 2011 26 Jul 2000 4 Mar 2011 15 Feb 2011 29 Sep 2005 26 Mar 2003 10 Mar 2010 14 Oct 2011 15 Jun 1989 3 Nov 2011 18 Dec 2007 Date in force 12 Feb 2011 10 Apr 2011 24 Mar 2011 5 Dec 1996 1 Jan 2013 30 Dec 2007 1 Jun 2011 10 Nov 2007 1 Dec 2012 1 Apr 2001 1 Dec 2011 1 Jan 2013 29 Nov 2006 1 Oct 2004 9 Sep 2010 11 July 2012 20 Aug 1992 not yet in force 13 Jul 2008
Azerbaijan
10 Bahamas, The 11 Bahrain 12 Barbados 13 Belarus
90 ANNEXES
Type of EOI agreement DTC DTC Protocol 14 Belgium MAC EU Directive 2011/16/EU 15 Belize 16 Bermuda 17 Bosnia and Herzegovina TIEA TIEA DTC DTC MAC TIEA DTC 20 Bulgaria 21 Canada 22 Cayman Islands 23 China 24 Colombia 225 Cook Islands 26 Costa Rica 27 Croatia 28 Curaao 29 Cyprus EU Directive 2011/16/EU DTC MAC TIEA DTC MAC TIEA TIEA MAC DTC TIEA DTC EU Directive 2011/16/EU DTC 30 Czech Republic EU Directive 2011/16/EU Nordic 31 Denmark MAC EU Directive 2011/16/EU
No.
Jurisdiction
Date signed 18 May 1976 15 Sep 2009 4 Apr 2011 15 Feb 2011 15 Sep 2010 16 Apr 2009 8 May 1986 2 Apr 1996 3 Nov 2011 27 Jun 2012 25 Apr 1985 15 Feb 2011 20 Jul 2006 3 Nov 2011 1 Apr 2009 25 May 2010 23 May 2012 16 Dec 2009 29 Jun 2011 1 Mar 2012 8 May 1986 10 Sep 2009 15 Nov 2012 15 Feb 2011 2 Dec 1994 15 Feb 2011 7 Dec 1989 28 Jan 2011 15 Feb 2011
Date in force 27 Dec 1978 not yet in force not yet in force 1 Jan 2013 not yet in force 31 Dec 2009 18 Dec 1987 26 Dec 1997 not yet in force not yet in force 21 Apr 1986 1 Jan 2013 17 Jan 2007 not yet in force 31 Mar 2010 25 Nov 2010 not yet in force 2 Oct 2011 not yet in force not yet in force 18 Dec 1987 1 Jun 2011 not yet in force 1 Jan 2013 12 Dec 1995 1 Jan 2013 8 May 1991 1 Jun 2011 1 Jan 2013
18 Brazil 19 Brunei
ANNEXES 91
No.
Jurisdiction
Type of EOI agreement TIEA DTC DTC EU Directive 2011/16/EU Nordic DTC DTC
Date signed 19 May 2010 1 Apr 1965 23 Mar 1993 15 Feb 2011 7 Dec 1989 25 Jan 2001 11 Sep 1970 13 Dec 2011 15 Feb 2011 11 Oct 2007 28 Feb 2011 5 Jul 1979 3 Nov 2011 15 Feb 2011 10 Jul 2012 20 Oct 2009 20 Jan 1980 21 Feb 2012 15 Feb 2011 7 Dec 1989 19 May 2010 15 May 2012 28 Oct 2008 25 Oct 1978 15 Feb 2011 7 Dec 1989 28 Oct 2011
Date in force not yet in force 2 Apr 1966 30 Dec 1993 1 Jan 2013 9 May 1991 22 Mar 2002 1 Mar 1972 1 Apr 2012 1 Jan 2013 23 Jul 2008 1 Jun 2011 4 Jun 1982 not yet in force 1 Jan 2013 not yet in force 6 May 2010 4 Oct 1981 not yet in force 1 Jan 2013 5 May 1991 22 Feb 2012 not yet in force 5 Apr 2009 24 Jul 1981 1 Jan 2013 8 May 1991 1 Feb 2012
32 Dominica 33 Egypt 34 Estonia 35 Faroe Islands Former Yugoslav 36 Republic of Macedonia 37 France
MAC EU Directive 2011/16/EU DTC MAC DTC MAC EU Directive 2011/16/EU MAC TIEA DTC MAC EU Directive 2011/16/EU Nordic TIEA TIEA TIEA DTC EU Directive 2011/16/EU Nordic MAC
38 Georgia
39 Germany 40 Ghana 41 Gibraltar 42 Greece 43 Greenland 44 Grenada 45 Guatemala 46 Guernsey 47 Hungary 48 Iceland
92 ANNEXES
Type of EOI agreement DTC MAC DTC MAC DTC 51 Ireland 52 Isle of Man 53 Israel 54 Italy 55 Jamaica 56 Japan 57 Jersey 58 Kazakhstan 59 Korea, Republic of MAC EU Directive 2011/16/EU TIEA DTC DTC MAC EU Directive 2011/16/EU TIEA DTC MAC TIEA DTC DTC MAC DTC DTC DTC 62 Latvia 63 Liberia 64 Liechtenstein 65 Lithuania EU Directive 2011/16/EU TIEA TIEA DTC EU Directive 2011/16/EU DTC 66 Luxembourg EU Directive 2011/16/EU
No.
Jurisdiction
Date signed 15 Jan 2010 26 Jan 2012 15 Oct 1987 3 Nov 2011 27 Mar 1992 30 Jun 2011 15 Feb 2011 30 Oct 2007 1 Aug 1997 12 Jun 1981 17 Jun 2012 15 Feb 2011 4 Dec 2012 4 Mar 1991 3 Nov 2011 28 Oct 2008 23 Mar 2009 8 Feb 1979 26 Mar 2012 8 May1986 3 Apr 2003 23 Mar 1993 15 Feb 2011 10 Nov 2010 17 Dec 2010 30 Apr 1993 15 Feb 2011 1 Mar 1982 15 Feb 2011
Date in force 19 Apr 2010 1 Jun 2012 26 Jan 1989 not yet in force 26 Nov 1993 not yet in force 1 Jan 2013 14 Jun 2008 1 Jan 1999 23 Oct 1983 1 May 2012 1 Jan 2013 not yet in force 28 Dec 1991 not yet in force 3 Aug 2009 5 Aug 2010 23 Dec 1981 1 Jul 2012 18 Dec 1987 28 Feb 2004 30 Dec 1993 1 Jan 2013 not yet in force 4 Apr 2012 30 Dec 1993 1 Jan 2013 27 Mar 1983 1 Jan 2013
49 India 50 Indonesia
60 Kosovo 61 Kyrgyzstan
ANNEXES 93
No.
Jurisdiction
Type of EOI agreement TIEA DTC DTC EU Directive 2011/16/EU TIEA TIEA DTC MAC DTC MAC TIEA DTC TIEA DTC New DTC DTC MAC EU Directive 2011/16/EU DTC Nordic MAC DTC TIEA DTC DTC MAC EU Directive 2011/16/EU DTC MAC EU Directive 2011/16/EU
Date signed 29 Apr 2011 28 Mar 1984 30 Oct 2000 15 Feb 2011 28 Sep 2010 1 Dec 2011 12 Feb 1997 23 May 2012 16 Apr 2008 24 Nov 2011 23 Jun 2010 8 May 1986 22 Nov 2010 25 Jun 1973 7 Apr 2006 28 Dec 1995 27 May 2010 15 Feb 2011 12 Mar 1982 7 Dec 1989 27 May 2010 30 Dec 1994 12 Nov 2012 13 Oct 1978 8 Jun 2009 9 July 2010 15 Feb 2011 27 Apr 1970 27 May 2010 15 Feb 2011
Date in force 9 Dec 2011 23 Feb 1986 30 Dec 2001 1 Jan 2013 2 Dec 2011 6 July 2012 14 Jul 1998 1 Sep 2012 9 Nov 2008 1 Mar 2012 10 Dec 2010 18 Dec 1987 31 Dec 2011 1 Dec 1980 20 Oct 2012 20 Dec 1997 not yet in force 1 Jan 2013 22 Sep 1984 5 May 1991 1 Jun 2011 10 Apr 1996 not yet in force 1 Oct 1981 1 Jan 2011 1 Oct 2011 1 Jan 2013 14 Jul 1971 not yet in force 1 Jan 2013
67 Macao, China 68 Malaysia 69 Malta 70 Marshall Islands 71 Mauritius 72 73 Mexico Moldova, Republic of
74 Monaco 75 Montenegro 76 Montserrat 77 Morocco
78 Netherlands 79 New Zealand 80 Norway 81 Pakistan 82 Panama 83 Philippines 84 Poland
85 Portugal
94 ANNEXES
Type of EOI agreement DTC 86 Romania 87 88 Russian Federation Saint Kitts and Nevis Saint Vincent and the Grenadines EU Directive 2011/16/EU DTC MAC TIEA TIEA TIEA TIEA TIEA DTC TIEA DTC DTC Protocol TIEA DTC 97 Slovakia EU Directive 2011/16/EU DTC 98 Slovenia MAC EU Directive 2011/16/EU DTC MAC DTC 100 Spain 101 Sri Lanka 102 Sweden MAC EU Directive 2011/16/EU DTC Nordic MAC EU Directive 2011/16/EU
No.
Jurisdiction
Date signed 27 Oct 1998 15 Feb 2011 4 May 1996 3 Nov 2011 24 Mar 2010 19 May 2010 24 Mar 2010 16 Dec 2009 12 Jan 2010 8 May 1986 30 Mar 2011 7 Jun 2002 16 Nov 2009 10 Sep 2009 15 Feb 1999 15 Feb 2011 19 Sep 2003 27 May 2010 15 Feb 2011 26 May 1995 3 Nov 2011 15 Nov 1967 11 Mar 2011 15 Feb 2011 18 May 1982 7 Dec 1989 27 May 2010 15 Feb 2011
Date in force 4 Feb 2000 1 Jan 2013 1 Jan 2003 not yet in force 21 Oct 2011 17 Mar 2011 28 Apr 2011 not yet in force 15 May 2010 18 Dec 1987 8 Nov 2012 27 Apr 2002 30 Apr 2010 1 Jun 2011 6 May 2000 1 Jan 2013 16 Jun 2004 1 Jun 2011 1 Jan 2013 12 Dec 1995 not yet in force 30 Oct 1968 1 Jan 2013 1 Jan 2013 28 Mar 1984 9 May 1991 1 Sep 2011 1 Jan 2013
89 Saint Lucia 90
91 Samoa 92 San Marino 93 Serbia 94 Seychelles 95 Singapore 96 Sint Maarten
99 South Africa
ANNEXES 95
No.
Jurisdiction
Type of EOI agreement DTC DTC Protocol DTC Protocol DTC DTC DTC MAC DTC MAC TIEA DTC MAC DTC DTC MAC EU Directive 2011/16/EU DTC DTC Protocol MAC DTC DTC TIEA DTC TIEA DTC
Date signed 16 Dec 1991 22 Sep 2009 18 Sep 2012 24 Oct 2012 12 May 1976 25 Apr 1985 16 Jul 2012 6 Oct 2009 3 Nov 2011 16 Dec 2009 14 Oct 1994 27 May 2011 12 Mar 1996 17 Jul 1969 27 May 2010 15 Feb 2011 21 Sep 1989 31 May 2006 27 May 2010 13 Dec 2011 9 Apr 1998 13 Oct 2010 21 Nov 2001 18 May 2009 30 Nov 1978
Date in force 26 Dec 1993 19 Dec 2010 2 Feb 201316 not yet in force 27 Dec 1978 28 Mar 1986 not yet in force 4 May 2012 4 May 2012 2 Apr 2011 12 Dec 1995 not yet in force 24 Feb 1997 5 Feb 1970 30 Jun 2011 1 Jan 2013 1 Jan 1991 28 Dec 2007 not yet in force 6 Feb 201317 7 Feb 1999 8 Mar 2011 26 Dec 2002 15 Apr 2010 17 May 1985
103 Switzerland 104 Tajikistan 105 Tanzania 106 Thailand 107 Tunisia 108 Turkey 109 Turks and Caicos Islands
110 Ukraine United Arab 111 Emirates 112 United Kingdom
113 United States 114 Uruguay 115 Uzbekistan 116 Vanuatu 117 Vietnam 118 Virgin Islands, British
119 Zambia
16. 17.
Entered into force after January 2013 and, therefore, not included in the analysis under element C.1.8 of this Report. Entered into force after January 2013 and, therefore, not included in the analysis under element C.1.8 of this Report.
96 ANNEXES
Annex 3: List of All Laws, Regulations and Other Relevant Material

The Constitution of Finland
Commercial Laws/Civil Laws

Limited liability Companies Act Partnership Act Foundations Act Foundation Decree Co-operatives Act Accounting Act and Ordinance Business Information Act Trade Register Act
Taxation Laws
Act on Assessment Procedure Act on the public disclosure and confidentiality of tax information Act on the taxation of shareholders in Controlled foreign companies (1994)
Anti-Money Laundering Laws

Act on Preventing and Clearing Money Laundering and Terrorist Financing
ANNEXES 97
Banking and Financial Laws

Act on Book-Entry Accounts Act on Book-Entry System Act on Credit Institution Securities Markets Act Act on Payment Institutions Act on Investment Firms
Other Laws
Criminal Code of Finland Code of Judicial Procedure Advocates Act
98 ANNEXES
Annex 4: People Interviewed During On-Site Visit
Ministry of Finance
Director for International Tax Affairs Tax Department Senior Governmental Secretary Financial Markets Department
Financial Supervisory Authority

Legal Adviser
National Board of Patents and Registration of Finland

Deputy Director
Tax Administration
Deputy Director General Senior Lawyer Senior Advisers
Uusimaa Tax Auditing Unit

Audit Manager Tax Auditors
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Global Forum on Transparency and Exchange of Information for Tax Purposes
PEER REVIEWS, COMBINED: PHASE 1 + PHASE 2,
incorporating Phase 2 ratings FINLAND

The Global Forum on Transparency and Exchange of Information for Tax Purposes is the multilateral framework within which work in the area of tax transparency and exchange of information is carried out by 120 jurisdictions, which participate in the Global Forum on an equal footing. The Global Forum is charged with in-depth monitoring and peer review of the implementation of the international standards of transparency and exchange of information for tax purposes. These standards are primarily reected in the 2002 OECD Model Agreement on Exchange of Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax Convention on Income and on Capital and its commentary as updated in 2004. The standards have also been incorporated into the UN Model Tax Convention. The standards provide for international exchange on request of foreseeably relevant information for the administration or enforcement of the domestic tax laws of a requesting party. Fishing expeditions are not authorised but all foreseeably relevant information must be provided, including bank information and information held by duciaries, regardless of the existence of a domestic tax interest or the application of a dual criminality standard. All members of the Global Forum, as well as jurisdictions identied by the Global Forum as relevant to its work, are being reviewed. This process is undertaken in two phases. Phase 1 reviews assess the quality of a jurisdictions legal and regulatory framework for the exchange of information, while Phase 2 reviews look at the practical implementation of that framework. Some Global Forum members are undergoing combined Phase 1 and Phase 2 reviews. The Global Forum has also put in place a process for supplementary reports to follow-up on recommendations, as well as for the ongoing monitoring of jurisdictions following the conclusion of a review. The ultimate goal is to help jurisdictions to effectively implement the international standards of transparency and exchange of information for tax purposes. All review reports are published once approved by the Global Forum and they thus represent agreed Global Forum reports. For more information on the work of the Global Forum on Transparency and Exchange of Information for Tax Purposes, and for copies of the published review reports, please refer to www.oecd.org/tax/transparency and www.eoi-tax.org.
Consult this publication on line at http://dx.doi.org/10.1787/9789264205604-en. This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and statistical databases. Visit www.oecd-ilibrary.org for more information.
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GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE OF INFORMATION FOR TAX PURPOSES

Peer Review Report Combined: Phase 1 + Phase 2, incorporating Phase 2 ratings

ISBN 978-92-64-20559-8 (print) ISBN 978-92-64-20560-4 (PDF)

Corrigenda to OECD publications may be found on line at: www.oecd.org/publishing/corrigenda.

Summary of Determinations and Factors Underlying Recommendations. . . . 83

ABOUT THE GLOBAL FORUM 5

About the Global Forum

Information and methodology used for the peer review of Finland

International exchange of information for tax purposes

Overview of the financial sector and relevant professions

Anti money laundering/combating financing of terrorism legislation

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 19

Compliance with the Standards

20 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 21

A.1. Ownership and identity information

Companies (ToR 7 A.1.1) Types of companies

22 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

Information held by government authorities Registration of companies

Information provided to the tax authority

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 23

Information held by the companies

24 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

Registration of branch of a foreign company

Information provided to the tax authority

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 25

Information held by Nominees

Conclusion and Practice

26 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

Bearer shares (ToR A.1.2)

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 27

Conclusion and Practice

Partnerships (ToR A.1.3) Types of partnerships

28 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

Information held by government authorities Registration of partnerships

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 29

Information provided to the tax authority

Information held by the partnership or partners

Conclusion and Practice

30 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

Trusts (ToR A.1.4)

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 31

Information held by the tax authority

32 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

Conclusion and Practice

Foundations (ToR A.1.5)

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 33

Information held by government authorities Registration of foundations

34 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

Information provided to the tax authority

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 35

Information held by service providers

Other relevant entities and arrangements

36 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

Information held by Co-operatives

Conclusion and Practice

Enforcement provisions to ensure availability of information (ToR A.1.6)

Enforcement provisions under tax law

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 37

Enforcement provisions under commercial and civil laws Companies

38 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

Enforcement provisions under AML Law

Conclusion and Practice

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 39

Individual and Corporate taxation units

40 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

A.2. Accounting records

General requirements (ToR A.2.1)