On 27 December 2018, Finland published Law 1237/2018 in the Official Gazette concerning new interest deduction restriction rules that are compliant with the EU Anti-Tax Avoidance Directive (ATAD).
The law extends the limitation to interest paid on loans from unrelated parties (currently, the limitation applies only to interest expense on loans between related parties). Under the new law, the deductibility of net interest expense would remain same as current limited to 25% of EBITD (taxable business profit added with interest expenses, tax depreciations, and net group contributions). In addition, the general deductibility threshold of EUR 500,000 would continue to apply and an additional threshold would be added under which the net interest expense of a third party would be fully deductible up to EUR 3 million.
Law 1237/2018 entered into force and applies from 1 January 2019.
