Hannes Snellman Secures Tax Credit for Finnish Multinational on Foreign Withholding Taxes for Intra‑group Concept Fees

Hannes Snellman represented the Finnish headquarters of a global multinational group in litigation to obtain credit in Finland for foreign withholding tax levied on an intra‑group concept fee. The dispute arose after the Finnish HQ invoiced a concept fee to a non‑Finnish group company and local withholding tax was imposed on the payment. The Finnish HQ sought to credit that foreign tax against its Finnish corporate tax. The Finnish Tax Administration denied the credit, arguing that the applicable double tax treaty limited the source country’s taxation rights to franchising‑related royalty payments and that the concept fee agreement did not constitute a franchising agreement. The Adjustment Board upheld the Tax Administration’s view and found the withholding tax could not be credited. Hannes Snellman’s tax litigation team appealed to the Administrative Court, arguing that the terms and conditions of the concept fee agreement amounted to franchising of a business concept and therefore fell within the scope of the treaty’s franchising provisions. The Administrative Court agreed with the client, ruled that the concept fee qualified as a franchising payment under the double tax treaty and ordered that the foreign withholding tax be credited against Finnish corporate tax. The state did not seek leave to appeal to the Supreme Administrative Court, and the Administrative Court’s ruling is now final and legally binding. Hannes Snellman represented the Finnish headquarters of the global group with a tax litigation team composed by: Jenni Parviainen, Lisanne Laumets and Heikki Vesikansa.

Hannes Snellman Secures Tax Credit for Finnish Multinational on Foreign Withholding Taxes for Intra‑group Concept Fees

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