Finland: Transfer of foreign permanent establishment - KPMG Global
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Finland: Transfer of foreign permanent establishment, taxation of unrealized gains

Finland: Transfer of foreign permanent establishment

The Court of Justice of the European Union (CJEU) on 23 November 2017 issued a judgment in a case concerning the immediate taxation in Finland of the unrealized gains of a permanent establishment upon its transfer to a company, when both are located in another EU Member State.


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Under the tax law of Finland, the taxation of the unrealized gains would be deferred if the Finnish permanent establishment was transferred to a domestic Finnish company.

The CJEU concluded that the Finnish law is contrary to the freedom of establishment because it does not allow for the deferral of taxation of the unrealized capital gains upon the transfer of a permanent establishment to another EU Member State.

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