Koron vähennysoikeuden rajoittaminen etuyhteysyhtiöiden välillä suomessa ja venäjällä : erityisesti uudelleenluonnehdintaa silmällä pitäen

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Title: Koron vähennysoikeuden rajoittaminen etuyhteysyhtiöiden välillä suomessa ja venäjällä : erityisesti uudelleenluonnehdintaa silmällä pitäen
Author: Semenova, Ksenija
Other contributor: Helsingin yliopisto, Oikeustieteellinen tiedekunta
University of Helsinki, Faculty of Law
Helsingfors universitet, Juridiska fakulteten
Publisher: Helsingfors universitet
Date: 2016
Language: fin
URI: http://urn.fi/URN:NBN:fi:hulib-201611102999
Thesis level: master's thesis
Discipline: Finanssioikeus
Fiscal law
Abstract: The purpose of this Master’s thesis is to study rules limiting deductibility of interest in taxation with related corporations by comparing rules in Finland and Russia and focusing on recharacterization of debt to equity or interest to dividend. Generally, there is a wide deductibility of interest in business taxation both in Finland and Russia. However, both countries have adopted specific rules limiting deductibility of interest in taxation. In addition to specific rules, both countries may recharterize debt to equity based on general anti avoidance rules. Russia has implemented its thin capitalization rules in 2002 when it has adopted traditional rules where interest deductibility is limited based on debt/equity ratio 3:1. Debt from related party exceeding the amount is classified as dividend. Historically, non discrimination clauses in double tax treaties concluded by Russia have limited the effectiveness of the rule. In addition, the related party definition has also been limited to cover only direct parent company. In newer case law it has been possible to apply the rules dispite the general non discrimination clauses. Also the concept of unreasonable tax benefit as anti avoidance doctrine has been applied more widely and all the related parties are now covered by the rules. This has caused legal uncertainty as taxpayers have limited certainty on expected outcomes of new Russian court cases. Finland has historically has no direct thin capitalization rules and it has applied quite strictly form over substance principle for defining what is debt and what is equity. General anti avoidance clause has been applied historically very rarely in case law, until a new landmark case was publish by the SAC 2016:72. This could lead to longstanding disputes between tax administration and taxpayers and therefore serious uncertainty may prevail for a number of years. Finland adopted specific rules regarding the limitation of interest deduction based per centage of EBITDA concept so that these rules were first time applied in 2014. Only 25% of adjusted taxable EBITDA is deductible. However, there is significant group ratio exemption for the application of the rules (ie. if debt/equity ratio in a single company is lower than group’s similar ratio the rules do not apply). The rule is very similar to OECD BEPS report (10/2015) as best practice. However, there is a need to adjust Finnish rules based on EU Anti Tax Avoidance Directive (7/2016) by 2019. Also external interests and real estate companies needs to covered under limitation rules by then. Overall, Finland and Russia have selected different, but both OECD BEPS compatible ways to limit the tax deductibility of interest. However, in both countries there is clear uncertainty how far general anti-avoidance clauses can be applied, which may reduce the attractiveness of these countries as investment targets.

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