Finland: Proposal to amend the withholding tax rate and relief at source process


The Finnish government has issued a proposal to amend the current tax legislation. The proposed amendment includes the following changes:

  • Abolishment of the current simplified relief at source process concerning beneficial owners who are eligible for withholding tax rates of 15-29%. Currently, Clearstream Banking 1 customers who are duly registered at the Foreign Custodian Register do not require identity disclosure of beneficial owner. With the new proposal, if a reduced tax rate is requested via the relief at source process, full disclosure will become mandatory for all beneficial owner types;
  • The implementation of a preliminary withholding tax of 50% for non-identified beneficial owner resident in Finland. However, this will not have any impact on Clearstream Banking customers as Finnish securities beneficially owned by Finnish nationals cannot be held at Clearstream;
  • The standard rate of withholding tax on dividends will increase from 30% to 35%;
  • A new Custodian Register would replace the current Foreign Custodian Register. This implies that all current registrations at the Foreign Custodian Register would lapse and new registrations would have to be made at the new Custodian Register:
    • With the new registration, the registered entity will in addition become liable for withholding tax in case incorrect information is provided on beneficial owners;
    • Furthermore, it is foreseen, that entities wishing to register at the new Custodian Register will have six months to register prior the applicability of the new legislation.

If the proposal is approved, it will enter into force as of beginning 2018 and is expected to become applicable as of beginning 2019.

We continue to monitor the Finnish market as more information becomes available.


1. Clearstream Banking refers collectively to Clearstream Banking S.A., registered office at 42, avenue John F. Kennedy, L-1855 Luxembourg, and registered with the Luxembourg Trade and Companies Register under number B-9248, and Clearstream Banking AG (for CBF customers using CreationOnline), registered office at 61, Mergenthalerallee, 65760 Eschborn, Germany and registered in Register B of the Amtsgericht Frankfurt am Main, Germany under number HRB 7500.

This Taxflash is intended to provide customers with general information gathered from different sources that are generally believed to be reliable. Clearstream Banking S.A. does not guarantee the accuracy or completeness of the information and does not undertake to keep it up to date. Use of the information made available in this Taxflash is at the customer’s own risk and Clearstream Banking S.A., its subsidiaries and affiliates expressly disclaim any liability for any errors or omissions reflected herein. The information in this Taxflash does not constitute legal or tax advice.