Changes in withholding taxation of dividends
New provisions on withholding taxation of dividends paid to holders of nominee registered shares are applicable as of January 2021.
Pursuant to the new provisions, a tax of 35% will be withheld on Finnish source dividends on nominee registered shares, unless the specific conditions for applying a lower rate are fulfilled.
A reduced rate may apply in case a custodian in the dividend payment chain is registered with the Finnish Tax Administration’s Register of Authorized Intermediaries and confirms a lower rate of withholding tax to be applicable to the dividend payment, simultaneously assuming certain obligations towards the Finnish Tax Administration. In such case the authorized intermediary will collect the documentation required for the application of the lower withholding tax rate.
If there is no authorized intermediary in the custodian chain or an authorized intermediary does not confirm a lower withholding rate to be applicable, a tax of 35% will be withheld on Finnish source dividend payments to a non-resident recipient.
Any tax withheld in excess of the applicable rate can be reclaimed after the year of the dividend payment by submitting a refund application to the Finnish Tax Administration, either on paper (form for corporate entities here, and for individuals here), or electronically.
You may also be able to request a correction of the withholding tax already during the year of the dividend payment via your authorized intermediary. Please contact your custodian for further information.
Please note that Vaisala Oyj does not process amendments to the withholding applied during the payment year, support in reclaim processes or advice the shareholders on the withholding tax reclaim application process.
Additional information on withholding tax reclaims can be obtained from the Finnish Tax Administration either:
by e-mail whtreclaims@vero.fi (for corporations only); or
via the Finnish Tax Administration general telephone and chat helplines (for both individuals and corporations).
Dividends paid to Finnish tax resident holders of nominee registered shares are starting from 2020 subject to withholding of 50% tax prepayment (ennakonpidätys). Any excess tax prepayment will be credited, as a starting point, in the normal tax assessment process where the shareholder reports their dividend income to the Finnish Tax Administration.
