Guidelines on tax reporting by state-owned companies anticipate requirements of new EU Directive
The guidelines for tax reporting by state-owned companies have been updated with regard to country-by-country income tax reporting.
Starting in the financial year 2022, companies are expected to report on their income taxes on a country-by-country basis and to proactively introduce the country-by-country reporting requirements set in the new EU Directive. In Finland, the requirements of the EU Directive are included in the amendment to the Accounting Act currently under preparation, which is likely to enter into force in summer 2023.
The tax reporting guidelines for state-owned companies are more extensive than the EU Directive, as they apply to majority state-owned companies without a euro limit on net sales. Listed companies will continue to comply with the reporting requirements set for them in the Market Abuse Regulation. For companies in which the State is not the majority shareholder, the new guidelines are a recommendation.
State-owned companies have been reporting on their income taxes for years, but they have previously used their discretion with regard to the level of detail of their country-by-country reporting.
The purpose of the guidelines is to improve the openness and transparency of companies’ tax information, promote corporate sustainability, increase wellbeing by supporting the fair allocation of taxes and prevent harmful tax competition. From the perspective of companies’ stakeholders, it is important that they are able to assess companies’ operations as extensively as possible based on their tax information.
For the first time, companies will be required to provide tax reports in line with these guidelines on their websites as part of their Sustainability Report or Annual Report or as a separate report on their taxes paid for and accounted for in 2022.
Inquiries: Kimmo Viertola, Director General, Prime Minister's Office, tel. +358 29 516 0026, Jari-Pekka Punkari, Chief Specialist, tel. +358 29 160 316, [email protected]