Hannes Snellman Counsel in Supreme Administrative Court Case Confirming Equal Treatment of a Swedish Real Estate Investor in Finnish Taxation
In a Supreme Administrative Court case concerning a Swedish insurance company planning to invest in Finnish real estate, the Supreme Administrative Court found that the Swedish insurance company is objectively comparable to a Finnish insurance company providing statutory pension insurance, thereby overruling the earlier decision of the Central Tax Board. According to the Supreme Administrative Court, the fundamental EU freedoms prohibit Finland from treating the Swedish insurance company in a discriminatory manner compared to its closest Finnish equivalent. The income tax of the Swedish insurance company should therefore be assessed on the basis of net income, not gross income, of its Finnish real estate investment.
In the first instance, the Central Tax Board had found, in a 5-3 vote, the Swedish investor liable to pay tax on the gross amount of the real estate income without the right to deduct costs related to its Swedish insurance activities.