The Finnish Tax Administration adjusts the taxation of the share dividend received from Fiskars Corporation
Fiskars Corporation
Press Release
December 22, 2020 at 10:30 EET
The Finnish Tax Administration adjusts the taxation of the share dividend received from Fiskars Corporation
In 2019, Fiskars Corporation distributed Wärtsilä Corporation's shares as a dividend to its shareholders. Fiskars paid the transfer tax due on the share dividend on behalf of the shareholders and reported the transfer tax payments to the Finnish Tax Administration. The amount of the transfer tax was treated as fully taxable capital income in 2019 in the taxation of the natural persons receiving the dividend.
According to a recent decision of the Finnish Supreme Administrative Court (KHO 2020:127), the transfer tax paid by Fiskars Corporation on behalf of the recipient of a share dividend should be treated as dividend within the meaning of section 33a (1) of the Income Tax Act, whereof 85% is taxable capital income and 15% tax-free income.
Following the decision of the Supreme Administrative Court, the Tax Administration will adjust the 2019 income taxation of the natural persons receiving the dividend. The taxation will be adjusted so that the amount of transfer tax which was fully treated as taxable capital income will be taxed as a dividend, whereof only 85% is taxable income, and the overpaid tax will be refunded to the recipient of the dividend.
The decision of the Supreme Administrative Court may also have an effect on the taxation of a corporation receiving share dividend from Fiskars Corporation in 2019.
The Tax Administration will adjust the taxation ex officio in cases where the amount to be refunded as a result of the adjustment is at least 10 euros. In these situations, the recipient of the dividend does not have to take action. The Tax Administration will send a decision on the adjustment to the recipient of the dividend and will pay the refundable tax.
In a situation where the amount to be refunded as a result of the adjustment would be less than 10 euros, the recipient of the dividend may make a claim for the adjustment and receive a refund if he or she also receives another tax refund and the refunds together are at least 10 euros.
The Tax Administration has issued guidelines in this regard with concrete example calculations. Link attached (in Finnish).
FISKARS CORPORATION
Corporate Communications
Media and investor contacts:
Corporate Communications, tel. +358 204 39 5031, communications@fiskars.com
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