On 7 August 2026, the Finnish Tax Administration issued updated guidance on the corporate income tax treatment of expert fees (asiantuntijapalkkiot) incurred in connection with the acquisition and disposal of shares (osakkeiden hankinta ja luovutus). Under the Finnish Business Tax Act (Laki elinkeinonharjoittajan tuloverotuksesta) and the Income Tax Act, the deductibility of such costs depends on whether they are considered revenue expenses (menot) or capital expenditures (investoinnit) that must be capitalized and depreciated. The guidance distinguishes between fees for successful transactions, aborted deals, and defensive advisory costs, referencing the Supreme Administrative Court precedent KHO 2021:45 and the OECD Transfer Pricing Guidelines for intra-group fee allocations.
Key Takeaways
- Successful Acquisition Fees Capitalized: Advisory fees (legal, financial, tax due diligence) directly related to a completed share acquisition are generally treated as part of the acquisition cost of the shares and capitalized on the balance sheet. They are not immediately deductible but may be depreciated over the useful life of the investment or recognized upon disposal.
- Aborted Deal Costs Deductible as Revenue Expenses: If a transaction is abandoned, the incurred expert fees are fully deductible in the tax year the decision to abandon is made, provided they were incurred for the purpose of generating taxable income. The guidance requires clear documentation of the business rationale and the point of abandonment.
- Intra-Group Fee Allocation Scrutiny: For multinational groups, the guidance warns that advisory fees recharged between group companies must comply with the arm’s length principle. Finnish tax authorities will examine whether the recharging entity performed genuine value-adding services or merely acted as a conduit, with potential transfer pricing adjustments and interest on underpaid tax.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement