On 2 September 2019, Finnish tax authority published a statement no.67/2019 regarding the application of the most-favored nation (MFN) clause in article 12(7) (Royalties) of Finland’s tax treaty with Lithuania. Under the MFN clause, effective from 1 January 2019, royalties are exempt from withholding tax in the Contracting State in which they arise.
Although not mentioned in the release, the MFN clause was triggered by the entry into force of the 2017 Japan-Luxembourg tax treaty, which is effective from 1 January 2019 and provides for a withholding tax exemption on royalties.
The MFN clause applies as of 1 January 2019
