A draft bill, currently in consultation with interest groups, is expected to come into force with minimal changes for the period from 1 January to 31 December 2016, according to accountancy and advisory giant Deloitte.
This means if the individual voluntarily reports income to the Finnish tax authorities during this time, there will be no criminal prosecution.
The funds declared under the new law would be subject to both interest for late payment and a tax increase of between 3-5% of unreported taxable income.
The individual would need to report his/her foreign investment income for the years 2004-2015, which represents an additional six years of income compared to current legislation.
Currently, the potential consequences vary from criminal prosecution to punitive tax increase and tax interest depending on the amount of unreported income.
Helskinki-based Veera Campbell, director of Deloitte Finland, said although the proposed legislation was currently only in the preparatory stages, she anticipated that the legislation would come into force largely as described in draft form.
“Individuals with large amounts of previously unreported income would have the opportunity to report the income without the risk of criminal prosecution and without the risk of publicity.
“However, if the new provisions will be applied to all cases, the individuals with more minor unreported foreign investment income should consider whether for them it would be more beneficial to lodge their appeal before the proposed legislation will come into force”, she said.
She added that at present the individual needs to report only the income received five years retrospectively. The new law would increase this to eleven years, from 2004 to 2015.