On 29 October 2021, the Parliament of Finland has adopted the Bill No.204/2021 to amend cross-border hybrid mismatch rules, implementing the EU anti-avoidance directives. The bill includes following measures to transpose the reverse hybrid mismatch rules as per Article 9(a) of the EU Anti-Tax Avoidance Directive as amended (ATAD2).
- Define a reverse hybrid entity
- Tax limited liability partnerships as reverse hybrid entities;
- Characterization of reverse hybrid entities based on partner residence;
- Expansion of hybrid tax rules for limited partnerships; and
- Simplification of tax rules to avoid double taxation of reverse hybrid companies.
The hybrid mismatch rules will apply from 1 January 2022.
