Skip to content
English
Contact us
  • There are no suggestions because the search field is empty.

Definitions for tax self-certification

In this article, you can review the legal definitions of the tax self-certification used for mapping an organization's tax information.

Active Entity

An entity is an "Active Entity” if it fills at least one of the following criterias a - f:

  • a) The entity did have less than 50% passive income and less than 50% of assets producing or held for passive income during the previous calendar year.
  • b) Substantially all of the entity’s activity is holding shares of, or providing financing/services to, its subsidiaries engaged in business other than financial institution activity.
    c) The entity is not yet operating a business (never has) but is investing capital with the intent to operate a business other than a financial institution (within 24 months of formation).
  • d) The entity has not been a financial institution in the past five years and is now
  • liquidating assets or reorganizing to continue or restart non-financial business.
  • e) The entity primarily conducts financing and hedging transactions with or for related entities that are not financial institutions, and does not provide such services to unrelated parties, where the group is primarily engaged in non-financial business.
  • f) The entity meets all of the following criteria 1- 5:
    • The entity is established and operated exclusively for religious, charitable, scientific, artistic, cultural, athletic, or educational purposes, or as a professional/business association, chamber of commerce, labor, agricultural, horticultural, or social welfare organization.
    • The entity is exempted from income tax in its jurisdiction of residence.
    • The entity has no shareholders or members with beneficial interest in its income or Assets.
    • Laws or governing documents prohibit income/assets distribution to private persons from the entity (except fair compensation or payments for services/property).
    • Laws or governing documents require that upon the entities liquidation, assets must go to a governmental or non-profit entity.

Excluded Person 

An entity is an Excluded Person if it fills one of the criteria listed below:

  • a) Shares of the entity are regularly traded on an established securities market.

  • b) The entity is a related entity (subsidiary or parent) of another entity whose shares are regularly traded on an established securities market.

  • c) The entity is a governmental entity (public sector entity).

     

  • d) The entity is an international organization.

  • e) The entity is a central bank.

  • f) The entity is a financial institution other than an investment entity.


Financial Institution 

A Financial Institution refers to a Custodial Institution, a Depository Institution, an Investment Entity, or a Specified Insurance Company.

Investment Entity 

In accordance with Section 4 of the Act on the Disclosure Obligation of Reporting Financial Institutions in the Field of Taxation (1042/2025), an Investment Entity means:

  • An entity that primarily conducts as a business one or more of the following activities or operations for or on behalf of a customer: a) trading in money market instruments, foreign exchange, exchange, interest rate and index instruments, transferable securities, or commodity futures; b) individual and collective portfolio management; c) otherwise investing, administering, or managing financial assets, money, or reportable crypto-assets on behalf of other persons; and
  • An entity whose gross income is primarily attributable to investing, reinvesting, or trading in financial assets or reportable crypto-assets, and the entity is managed by another entity that is a Custodial Institution, a Depository Institution, a Specified Insurance Company, or an Investment Entity as described in point 1.

An entity is considered to primarily conduct as a business one or more of the activities referred to in subsection 1, point 1, or its gross income is considered to be primarily attributable to the investing, reinvesting, or trading of financial assets or reportable crypto-assets referred to in subsection 1, point 2, if at least 50% of the entity's gross income is derived from the activities referred to in subsection 1, point 1 or 2, during the shorter of the following periods:

  • The three-year period ending on December 31 of the year preceding the year in which the determination is made;
  • The period during which the entity has been in existence.

For the purposes of applying subsection 1, point 1 of this section, the owner of an equity interest in a collective investment vehicle is also considered a customer.

For the purposes of applying subsection 1, point 1, subparagraph c of this section, the phrase "otherwise investing, administering, or managing financial assets, money, or reportable crypto-assets on behalf of other persons" does not include the provision of services that perform exchange transactions for or on behalf of customers.

An Investment Entity does not include an Active Non-Financial Entity (Active NFE) that meets any of the criteria in Section 61, subsection 1, points 4–7. This section shall be interpreted in a manner consistent with similar terminology used in the definition of a financial institution in the Act on Preventing Money Laundering and Terrorist Financing (444/2017).