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An analysis by Borenius, Taxand Finland
A recent Finnish Supreme Administrative Court ruling confirmed that using a loan from a parent company as collateral for an external loan doesn’t turn it into an internal company loan, meaning stricter interest deduction limitations do not apply.
The court also decided that currency gains and losses related to loan interest count as interest expenses for tax purposes, but gains and losses from the loan amount itself do not.
Heikki Wahlroos, Anna Tallgren and Mikko Vesikivi from Borenius, our Finnish member firm, have analysed this ruling in further detail here, which helps to clarify how tax deductions work in cases involving loans and foreign currency.
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