Finland – Transfer Pricing (2025)

Legal framework and scope

Finland frames its transfer pricing rules within the Assessment Procedure Act. The Arm’s Length Principle is explicitly referenced in Section 31 of that Act. The OECD Transfer Pricing Guidelines (OECD TPG) serve as an interpretative source for both tax treaties and domestic legislation. This reliance on the OECD TPG is reflected in Government Bill (107/2006 vp.), which updated transfer pricing legislation and introduced documentation requirements, and later in Government Bill (142/2016 vp.) and Government Bill (188/2021 vp.). The Supreme Administrative Court of Finland has also cited the OECD TPG as an interpretative source in decisions such as KHO 2013:36.

Arm’s Length Principle and the role of the OECD Guidelines

Finnish domestic law does not codify a closed list of transfer pricing methods; instead, it relies on the OECD TPG for interpretation and practical guidance. The OECD TPG are explicitly referenced in government bills and have been used by Finnish courts and tax authorities to interpret the domestic rules. Consequently, the OECD approach — including the most appropriate method standard, comparability analysis, and use of arm’s length ranges — functions as the practical framework applied by Finland.

Definition of related parties

The statutory definition of related parties is set out in Section 31.4 of the Assessment Procedure Act. Under that provision, parties are related if a taxpayer has a direct or indirect ownership interest exceeding 50% of either the shares or votes of another enterprise, or has direct or indirect rights to nominate more than half of the members of the board of directors of another enterprise, or has disposal rights in respect of the other enterprise due to other circumstances. This definition addresses control by shareholding, voting rights, board appointment powers, and other forms of decisive control. No further domestic definition concerning kinship or other relationships beyond Section 31.4 is provided in the profile.

Methods and selection criterion

Finnish legislation does not specify domestic transfer pricing methods by name (for example, CUP, Resale Price, Cost Plus, TNMM or Profit Split are not listed in statute). The OECD TPG provide the substantive guidance on which methods are appropriate. Finland applies the “most appropriate method” criterion when selecting the transfer pricing technique, consistent with OECD guidance. Regarding commodity transactions, although domestic law lacks specific provisions, Finland follows the OECD TPG paragraphs 2.18-2.22 for controlled transactions involving commodities.

Comparability and arm’s length ranges

Finland follows the comparability analysis guidance of Chapter III of the OECD TPG. There is no statutory preference for domestic comparables over foreign ones, and the Finnish tax administration does not use secret comparables in transfer pricing assessments. Domestic rules permit the use of an arm’s length range and statistical measures to determine arm’s length remuneration; the Finnish Tax Administration recommends using the inter‑quartile range as the arm’s length range in its transfer pricing documentation guidance. Finnish law does not mandate comparability adjustments expressly; however, the OECD TPG are the reference for whether and how such adjustments should be made.

Documentation and filing requirements

Transfer pricing documentation requirements are established in Sections 14a-14c of the Assessment Procedure Act for the master file and local file, and Sections 14d-14e for the Country-by-Country Report (CbCR). A taxpayer must submit the master file and local file within 60 days of a request by the tax authorities, although the annual documentation package is not required earlier than six months after the end of the accounting period. Documentation may be filed in English, Finnish or Swedish. Finland follows the OECD model rules for CbC reporting: the qualifying taxpayer must file the CbC report within one year after the close of the fiscal year covered by the CbC report, and must file the CbC notification no later than the last day of the fiscal year covered. CbC reports and notifications may also be filed in English, Finnish or Swedish. The Explanation of Transfer Prices (form 78) is filed as an annex to the corporate income tax return, which must be filed within four months from the end of the accounting period; form 78 can be submitted in English, Finnish or Swedish.

Safe harbours, exemptions and materiality thresholds

Finland provides certain simplifications and exemptions. Small enterprises and SMEs, as defined in the Commission Recommendation of 6 May 2003 (2003/361/EC), are not required to prepare transfer pricing documentation. If the total amount of a taxpayer’s arm’s length transactions with each related party does not exceed EUR 500 000, the taxpayer has no obligation to prepare a master file. There are additional reliefs for the content of the local file when the taxpayer only engages in minor transactions with the related party. Finland does not have statutory safe harbour rules for particular industries or transactions according to the profile.

Penalties and other administrative considerations

Section 32 of the Assessment Procedure Act provides for penalties related to transfer pricing documentation non‑compliance. Failure to submit required documentation may result in an administrative penalty of up to EUR 25 000. Finland allows year‑end adjustments in transfer pricing, consistent with OECD guidance. The domestic law, as presented in the profile, does not provide a statutory framework for secondary adjustments in transfer pricing.

Other rules outside transfer pricing

Several domestic rules outside the transfer pricing statute may affect intragroup transactions. For interest deductibility rules, Sections 18a-18b of the Act on the Taxation of Business Income apply. Rules on hybrid mismatch arrangements are contained in the Act on taxation of certain cross border hybrid mismatch arrangements, which can impact financial transactions between group entities. Cost contribution agreements are not specifically governed in Finnish law and are addressed through OECD interpretative guidance.

Intra-group services and financial transactions

Finland’s domestic legislation does not include specific rules for pricing intra‑group services; the OECD TPG provide the relevant interpretation and Finland recognises a simplified approach for low value‑adding intra‑group services in line with OECD guidance. There is no specific domestic legislation addressing financial transactions for transfer pricing purposes, although the Finnish Tax Administration has issued a statement applying OECD guidance on financial transactions in the context of domestic case law.

APAs, MAP and dispute resolution mechanisms

Finland offers a broad set of administrative mechanisms to prevent and resolve transfer pricing disputes. These include advance tax rulings, enhanced engagement programs, Advance Pricing Agreements (APAs) — unilateral, bilateral and multilateral — and Mutual Agreement Procedures (MAP). The act on tax assessment procedure (§ 85 and § 85a) empowers the tax authority to issue rulings and manage unilateral APAs; there is no separate APA statute. APAs that involve other jurisdictions are concluded on the basis of the MAP provisions in applicable tax treaties (corresponding to Article 25 of the OECD Model Tax Convention), the EU Arbitration Convention (90/436/EEC) where relevant, or under EU Directive 2017/1852. The Act on the international tax dispute resolution procedure (Laki kansainvälisten veroriitojen ratkaisumenettelystä (530/2019)), effective as of 30 June 2019, sets out rules for MAP concerning the competent authority and the taxpayer. The Finnish Tax Administration publishes guidance on international dispute resolution, maintains a MAP profile, and offers Pre‑emptive Discussion and Cross‑Border Dialogue services aimed at guiding taxpayers and resolving cross‑border issues before they escalate.

Attribution of profits to Permanent Establishments (PEs)

Finland follows the Authorised OECD Approaches (AOA) for attributing profits to permanent establishments. The profile notes that currently none of Finland’s tax treaties contains the new version of Article 7; accordingly, Finland applies the 2008 OECD Commentary on profit attribution provided it does not conflict with the Article 7 text of the applicable treaty.

Conclusion

Finland’s transfer pricing framework relies substantially on the OECD Transfer Pricing Guidelines for interpretation and application. While domestic law specifies the definition of related parties (Section 31.4), documentation obligations (Sections 14a-14e), penalties (Section 32), and procedural aspects, the selection of methods follows the “most appropriate method” standard of the OECD TPG rather than a statutory hierarchy. The country provides procedural tools to prevent and resolve disputes, including rulings, APAs and MAP, and allows certain exemptions and simplifications for SMEs and low‑value transactions. For topics not specifically regulated in domestic law — such as intangibles, cost contribution agreements, and detailed rules for financial transactions — Finland defers to the OECD TPG and administrative guidance.

References

More information and the OECD country profiles are available at: https://www.oecd.org/en/topics/sub-issues/transfer-pricing/transfer-pricing-country-profiles.html