Continuing its pursuit to inform the market participants about the OECD TRACE model to be implemented in Finland as of 2021, the Finnish Tax Administration recently held an online meeting focusing on registration to the upcoming Register of Authorised Intermediaries.
Registration with the new Register of Authorised Intermediaries (“Register of AIs”) will begin on 1 July 2020. All registrations will come into force and the Register will be published on 1 January 2021, meaning that the current Custodian Register will be abolished on 31 December 2020.
If a custodian intends to register as an Authorised Intermediary as of 1 January 2021 when the TRACE model becomes applicable, it is recommended that the registration application be filed immediately the registration process begins.
Registration with the Register of AIs requires that a foreign custodian already has a license to act as a custodian and is supervised by the authorities of its country of residence. A custodian must be resident in an EU member state, or in a state that has a double tax treaty in force with Finland. A branch acting as a custodian may also be registered separately from its head office, provided the branch is situated in a state as referred to above.
The custodian must be subject to the Common Reporting Standard (CRS) or to rules on anti-money laundering and customer identification, as well as to other legislation based on which the custodian is responsible for identifying its customers and their country of tax residence.
Upon registering with the Register of AIs, the foreign custodian will be given a Finnish business ID and will be responsible for compliance with the obligations of an AI regarding tax withholding and TRACE reporting (in this regard, please see our previous newsletter). Registered custodians (AI) are also responsible for reporting any changes to their registered information.
All registrations will be valid until further notice. A custodian can be removed from the Register of AIs if it applies for such removal, or by the authorities if the custodian fails to comply with its obligations, or if the requirements for registration are no longer fulfilled.
The Finnish Tax Administration maintains a website on the implementation of TRACE, where they post the related guidance and other material. They will also organize another online meeting with foreign custodians on 20 November 2019.
KPMG in Finland is actively following the implementation of TRACE and is very willing to assist custodians with their registration processes and TRACE procedures.
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