News & Views

Finnish Publicly Listed Companies Request the European Commission to Investigate the Amended Finnish Legislation on Withholding Taxation of Dividends Paid to Nominee-Registered Shares

30 June 2021

Several Finnish publicly listed companies have submitted a complaint to the European Commission requesting the European Commission to investigate whether the newly amended Finnish legislation on withholding taxation of dividends paid to nominee-registered shares is compatible with the EU law.

The complainants include, in no particular order, e.g. Nokian Renkaat Oyj, Kone Oyj, Konecranes Abp, Fortum Oyj, Sampo Oyj, Nordea Bank Abp, Cargotec Oyj, Valmet Oyj, Stora Enso Oyj, Metso Outotec Oyj, Nokia Oyj, Fiskars Oyj Abp, Kesko Oyj, and Sanoma Oyj.

The amended Finnish legislation entered into force on 1 January 2021 introducing a new 35% withholding tax rate on dividends paid by publicly listed companies to nominee-registered shares. The 35% tax must be withheld instead of the general withholding tax rates unless the payor or an authorised intermediary possesses final recipient information at the time of payment. Furthermore, under the new regulation, the application of tax treaty rates requires the dividend payor or the authorised intermediary to carefully investigate the dividend beneficiary’s country of residence and to verify that the dividend provisions of the tax treaty can be applied to the beneficiary. The law does not, however, contain a definition of the final recipient or make any clear reference to how the applicability of the dividend provisions of the tax treaty should be verified. Consequently, the publicly listed companies or the authorised intermediaries may, in practice, have no other way to ensure that they will not be subject to retroactive tax liability for any tax left unwithheld than to apply the increased 35% withholding tax on dividends paid to foreign owners of nominee-registered shares.

The first data indicates that, ever since the legislation was amended, a significantly higher average withholding tax has been levied on dividends paid to non-residents. There is a risk that the amended legislation will discourage non-residents from making portfolio investments in the shares of Finnish listed companies.  The complaint can be found here.

For further information, please contact Partner and Head of Tax Heikki Vesikansa (, p. +358 40 844 2117) or Managing Associate Jenni Parviainen (, p. +358 40 808 6523)