We advised the United Nations’ Technology & Innovation Labs on applying for an advance ruling from the Central Tax Board regarding the tax treatment of its Finnish employees in Finland. The ruling concerns the question of whether the employment income of the Finnish United Nations’ employees should be fully exempt from Finnish taxation and, thus, treated equally with foreign United Nations’ employees working in Finland.
The Central Tax Board ruled in September 2020 in favour of the Finnish Tax Administration. However, the ruling was overturned by the Supreme Administrative Court on 30 April 2021. Under the Supreme Administrative Court’s ruling, the employment income of the Finnish United Nations’ employees should be fully exempt from Finnish taxation, and it cannot be taken into account when determining the progressive tax rate of other employment income of the same individual.
The ruling means that the Finnish Tax Administration should review its previous practice. The matter concerns a large number of Finnish UN employees working in Finland.
This assignment was part of our pro bono engagement.