On 9 December 2021, the Finnish Parliament has approved the amendment to the transfer pricing adjustment provision, (VML Section 31) of the Tax Procedure Act (VML). On 16 December 2021, the President signed the law, the amendment will take effect on 1 January 2022 and will apply to tax years beginning on or after 1 January 2022.
The amended provision contains a new paragraph 2 to define a related transaction and a new paragraph 3 to exclude a related transaction. In particular, a new paragraph relating to the assessment of a related-party (affiliate) transaction as at arm’s-length is added and a new paragraph is added which provides that a transaction that is not made at arm’s-length cannot be taken into account, and if required, replaced by another transaction at arm’s length.
