FINLAND Law and Practice Contributed by: Maria Lehtimäki, Niklas Thibblin and Timo Lehtimäki, Waselius
6.4 Construction of Bankruptcy-Remote Transactions Legal opinions will typically address certain aspects of insolvency laws that are critical to the assessment of the bankruptcy remoteness of the transaction, such as rules on the avoidance or revocation of transactions in the event of the insolvency of the originator. 6.5 Bankruptcy-Remote SPE Limited recourse and non-petition provisions are included in the constitutional documents and transaction documents to safeguard the SPE against legal action and insolvency filings that could jeopardise the transaction. However, the effectiveness of such provisions may be limited by general principles of law with respect to a Finnish SPE. The transaction cash-flows need to be mod - elled and reserves need to be sized such that the SPE’s liquidity is ensured.
• resident for corporation tax purposes in Fin - land; or • carrying on a trade in Finland through a Finn - ish permanent establishment (which generally excludes agents of independent status acting in the ordinary course of their business). In addition, a non-Finnish resident company that does not have a branch or permanent establish - ment in Finland may be liable to Finnish income tax on certain Finnish source income, subject to the provisions of an applicable double tax treaty. Neither a permanent establishment nor any other charge to Finnish income tax would generally be expected to arise for the SPE solely as a result of purchasing Finnish receivables and appointing a servicer to service them. In public securitisation transactions, it is common to seek an advance tax ruling confirming that no permanent estab - lishment will arise for the SPE in Finland as a Withholding tax is generally not levied on any payments on receivables to a non-Finnish resi - dent purchaser. 7.4 Other Taxes Certain goods and services are excluded from VAT, such as financial and insurance services. The purchase of receivables would generally qualify for this exemption. Servicing and debt collection are generally subject to Finnish VAT at the standard rate (currently 24%). However, services that are not deemed to be supplied in Finland for VAT purposes are not subject to Finnish VAT. With respect to certain types of collateral assets, the SPE may be liable for VAT in Finland for the realised profit margin in con - nection with an enforcement action against the underlying debtor. result of the transaction. 7.3 Withholding Taxes
7. Tax Laws and Issues 7.1 Transfer Taxes
There is no transfer tax on the transfer of receiv - ables, assuming that the receivables do not qualify as securities for transfer tax purposes. There are no stamp, registration or similar taxes in connection with the execution of securitisation
transaction documents. 7.2 Taxes on Profit
Finnish tax issues are typically mitigated by establishing the SPE offshore. Finnish corpora - tion tax is assessed in accordance with territo - rial limitations, such that a company may only be assessed to Finnish corporation tax to the extent that it is:
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