The Finnish Central Tax Board’s recent ruling on scope of intra-group interest in the application of the Finnish interest barrier rules

The Finnish interest barrier rules treat intra-group loans differently than loans from third parties. In its recent ruling the Finnish Central Tax Board (CTB) considered what constituted intra-group loans for interest barrier rules purposes. The CTB adopted a position that a loan taken from a third party should not be considered as an intra-group loan solely because it was secured among other securities with a receivable of a group company.

  • The Finnish interest barrier rules treat differently interest on third party debt and intra-group debt: According to the Finnish interest barrier rules there are limitations on how much net interest expenses (interest income less interest expense) are deductible for tax purposes. Net interest expenses paid on intra-group debts are deductible up to €500 000. If...