News & Views

Specialist Partner Piia Ahonen Successfully Defended Client’s Tax Position in Supreme Administrative Court’s Yearbook Case

13 February 2019

On 12 February 2019, the Finnish Supreme Administrative Court issued a resolution concerning the VAT treatment of intermediary services to Finnish students aiming to study abroad in the U.S. 

The case originated more than five years ago from a tax audit where Finnish VAT auditors claimed that the services, such as interviewing Finnish students in order to learn the students’ wishes for exchange programs, talking with Finnish students about the best options and which schools should be contacted, and, after that, contacting the schools and negotiating on the price and other conditions of the exchange program, should be subject to Finnish VAT. The position of the company providing the services was that these services should not attract Finnish VAT. The above-mentioned services, including related consultancy services, should be considered intermediary services that are not subject to Finnish VAT due to the fact that the client acted as an intermediary between U.S. schools and Finnish students in relation to U.S.-based education and accommodation services that are not taxed in Finland.

Hannes Snellman’s Head of Indirect Tax Piia Ahonen successfully defended the client’s position through instances, and the resolution issued by the Supreme Administrative Court as a yearbook decision finally confirms that the client’s position is right and that the back tax assessments proposed by the tax auditors were unlawful. The Supreme Administrative Court’s yearbook includes cases that are of general importance and meant to guide the praxis of the tax authorities and administrative courts.