FINLAND Law and Practice Contributed by: Petteri Rapo, Markku Renko, Henri Becker and Jaakko Niskala, Svalner Atlas Finland
In addition, Finland enables reporting of suspected non-compliance through an electronic channel, allow - ing the Tax Administration to receive tips (including anonymously) about suspected tax evasion. 5.5 Role of Tax Authorities and Enforcement Measures The Finnish Tax Administration has broad powers to examine taxpayers’ compliance through adminis - trative tools, primarily information requests and tax audits, supported by statutory audit rules and detailed administrative guidance. Tax audits are a core tool of tax control. The legal provisions governing tax audits are set out in, among others, Section 14 of the Act on Assessment Proce - dure (and parallel rules for self‑assessed taxes, pre - payments and car tax), and the Tax Administration has issued comprehensive guidance describing tax audit objectives and procedure. During a tax audit, the taxpayer may be required to provide extensive material. Finnish secondary legisla - tion governing the audit process ( verotusmenettelya- setus ) specifies that, in a tax audit, the taxpayer must present for inspection business-related material and property, including accounting records and supporting documents (eg, ledgers, vouchers), correspondence, notes and other accounting/management documen - tation, contracts and minutes, etc. As regards unannounced visits and “raids/fiscal per - quisitions”, Finland’s primary tax-control model is administrative auditing and information-gathering under tax procedure legislation. The Tax Administra - tion guidance recognises that audits can be conduct - ed simultaneously with other authorities’ measures, for example where a police pre-trial investigation is ongoing; in such cases the tax auditor acts under tax- law powers while criminal investigative powers lie with the competent criminal authorities.
increases and late-filing charges under tax procedure rules, and (ii) specific penalty payments for failures in international reporting and transfer pricing documen - tation. Administrative tax penalties are imposed and administered by the Finnish Tax Administration. As a general matter in income taxation, taxpayers may be subject to administrative late fees and tax increases ( veronkorotus ) where returns or required information are late, incomplete or incorrect; the Tax Administration describes tax increases as calculated on a formula basis (eg, a percentage of the added income) in personal income tax contexts. More broad - ly, the statutory basis for tax increases in the Act on Assessment Procedure (VML) is reflected in case law applying VML 32 § (and related provisions). For cross-border compliance specifically, Finland pro - vides for administrative penalties tied to transfer pric - ing documentation and CbC reporting. Finland’s trans - fer pricing profile indicates that for non-compliance with documentation or CbC reporting requirements, the tax authorities may impose a penalty not exceed - ing EUR25,000, and such penalty may be imposed even if no transfer pricing adjustment is made. In addition, failures to comply with certain internation - al third‑party reporting obligations (including FATCA/ CRS/DAC2, DAC6 and platform reporting) can trigger a penalty payment ( laiminlyöntimaksu ) under VML 22 a §; the Tax Administration has detailed guidance on the imposition of such penalties in relation to specified reporting obligations. 6.2 Criminal Penalties Tax fraud offences are criminalised under the Finnish Criminal Code (Chapter 29). In broad terms, tax fraud ( veropetos ) is punishable by a fine or imprisonment for up to two years, while aggravated tax fraud ( törkeä veropetos ) may lead to imprisonment typically in the range of four months up to four years, depending on the circumstances (eg, substantial benefit sought or particularly methodical conduct). 6.3 Interaction Between Tax and Criminal Procedures Finland follows a framework intended to prevent “double punishment” for the same conduct (ne bis
6. Penalties and Sanctions 6.1 Tax Penalties
The Finnish framework for administrative penalties relevant to cross-border transactions includes (i) tax
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