Krogerus represented Heino Group Oy in legal proceedings regarding transfer tax liability on loans in connection to the acquisition of a non-mutual real estate company
Krogerus successfully represented Heino Group Oy in legal proceedings before the Tax Adjustment Board claiming a refund for unlawfully imposed transfer tax on company loans in connection with the acquisition of the shares in a (non-mutual) real estate company.
The decision outlines the limits to applicability of Finnish transfer tax to construction-related loans in a real estate company transaction concerning non-mutual real estate companies. According to Finnish transfer tax law, loans allocated to the shareholders ("company loans") and unallocated loans taken to finance the acquisition of real property and construction costs ("construction loans") are generally included in the transfer tax base when acquiring the shares in a real estate company.
However, based on the decision, since a non-mutual real estate company's loans are not allocated to shares pursuant to the articles of association of the company and provided that the shareholders are not legally obligated to service or repay the loans on behalf of the company, or otherwise responsible for the loans pursuant to any decision, shareholders' agreement or any other undertaking, such loans cannot be considered the company loans within the meaning set out in the Finnish Transfer Tax Act. Further, in such case of a non-mutual real estate company that does not have loans allocated to the shareholders, loans taken to finance the acquisition of real property and construction costs therefore cannot be included in the transfer tax base either. The decision is legally binding. Any taxpayers that have acquired non-mutual real estate companies and paid transfer tax for company or construction loans may seek a refund of such tax.
The Krogerus team was led by Partner Samu Lassila and he was assisted by Senior Associate Jemiina Pohja.