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Finland

Asset transfer tax on secondary offerings of shares

The Finnish National Board of Taxes issued non-binding guidelines on March 3 2000 concerning the obligation to pay asset transfer tax in respect of secondary offerings of shares in connection with a listing on the Helsinki Exchanges.

On the transfer of securities, an asset transfer tax is under the main rule levied at a rate of 1.6% of the purchase price. As share transfers on the Helsinki Exchanges are exempt from asset transfer tax, the transfer of shares in connection with the admission to the pre-list of the Helsinki Exchanges has in practice been effected in reliance upon such exemption by recording the secondary offerings in the trading system of the Helsinki Exchanges.

According to the guidelines, the exemption from asset transfer tax will not apply to transfers of shares in connection with the admission to listing, since such shares are not listed on the Helsinki Exchanges at the moment of the transfer. As a consequence, asset transfer tax will, in the view of the National Board of Taxes, be imposed on such transfers of shares. The application of the principles contained in the guidelines would result in an obligation of the relevant securities intermediary to collect asset transfer tax from the transferee or, in case of foreign transferee, from a Finnish transferor (being the selling shareholder).

Gunnar Westerlund

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