<abstract xmlns="http://www.w3.org/1999/xhtml">

Recently welfare economists and international political economy scholars have increasingly discussed how the corporations seek profits by corroding policies that tackle tax avoidance and undermine public interest. This article contributes to these discussions on so-called regulatory captures in the global wealth chains by providing a comprehensive case study on anti-tax avoidance legislative processes in Finland. The author analyzes the statements that various stakeholders provided during several phases of enacting the interest deduction limitation rule that targets so-called thin capitalization arrangements. Because of this specific research material, the author is able to undertake a nuanced analysis in describing how and whose statements made the difference from the draft version of legislation to the final wording of the law. The evidence suggests corporate interest groups and tax advisory firms influenced the content of the rule as notable tax base eroding loopholes have been included in the Finnish anti-tax avoidance rule. The author also assesses remedies of regulatory captures.
</abstract>

Who generated the loopholes? A case study of corporate tax advisors’ regulatory capture over anti-tax avoidance legislation in Finland

<abstract xmlns="http://www.w3.org/1999/xhtml">

A tax litigation concerning the value of non-traded financial instruments is impregnated by uncertainty. The aim of this paper is to study how uncertainty inherent in financial valuation models is discursively and rhetorically handled and constructed by the litigating parties as well as the court. A discourse analysis guided by the notion of hedging is conducted on <italic>The Swedish Tax Agency v. PwC</italic> (2013, 2014). The analysis demonstrates a sparse use of hedging. Rather, certainty characterizes tax litigation. However, the analysis shows that the litigating parties as well as the court participates in the construction of claims as facts, distancing themselves from their own claims and decisions.
</abstract>

The Rhetorical Handling and Construction of Uncertainty in Tax Litigation Concerning Valuation of Financial Instruments

<abstract xmlns="http://www.w3.org/1999/xhtml">

Finnish limited liability housing companies (LLHCs) are increasing their debt ratios quickly. In this paper, I argue that current tax rules encourage this behaviour owing to strong shareholder tax incentives for a higher debt ratio. Although tax rules are designed to be neutral, Finnish tax rules related to selling assets are profitable for LLHC shareowners in cases where debt rates are high owing to taxable profits being based not on actual acquisition costs but on presumed acquisition costs derived from the selling price. Both tax deductibility of LLHC financial charges and the presumed acquisition cost rule are from a time when interests and inflation were higher than they currently are. Both of these were used to counter the adverse effects of inflation and interest for asset owners and LLHC shareholders. Currently, when inflation and interest rates are close to zero, these rules have created an incentive for a behaviour that increases risks for the whole economy and reduces tax income.
</abstract>

How tax policies create unexpected results when interest rates are low: A case study of Finnish housing company debt and private investor return1

<abstract xmlns="http://www.w3.org/1999/xhtml">

Member states often try to restrict cross-border debt financing in multinational groups. The pending Swedish case, Lexel AB, C-484/19, is a prime example. The Swedish tax law operates with a vague legal concept of tax abuse that is completely inappropriate to identify tax-abusive financing and disadvantages only foreign groups. This paper analyzes the Swedish rules on interest limitation in affiliated groups (C-484/19), which refers to substantial tax benefits, against the background of the European Union law and the finance theory. In this regard, a breach of European Union law can be found. This also applies to the current Swedish tax law. Moreover, the interest limitation rules are analyzed from the background of the principles of finance theory, particularly the interest coverage ratio (ICR). In this context, a comparative analysis is carried out between the Swedish rules and the Anti-Tax Avoidance Directive (ATAD) provision (Art. 4). Adequate regulations on the limitation of interest should cope with the problem of profit shifting, also preserve the freedom of financing, particularly in multinational groups, and should not contain any difference in treatment between domestic and foreign groups.
</abstract>

The freedom of cross-border funding in multinational groups and European Union law

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Nordic Tax Journal

Volume 2022 (2022): Issue 1 (December 2022)

Article

Who generated the loopholes? A case study of corporate tax advisors’ regulatory capture over anti-tax avoidance legislation in Finland

The Rhetorical Handling and Construction of Uncertainty in Tax Litigation Concerning Valuation of Financial Instruments

How tax policies create unexpected results when interest rates are low: A case study of Finnish housing company debt and private investor return¹

The freedom of cross-border funding in multinational groups and European Union law

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