Finland Times

 

Minister of Finance Alexander Stubb. File Photo Lehtikuva.

Finance Minister Alexander Stubb on Saturday received a letter from Portugal’s Minister of Finance Mário Centeno confirming Portugal’s commitment to a new tax agreement.

 

Consequently, a negotiated outcome has been reached on the taxation of pension income, according to a finance ministry press release.

 

“It is through taxation that we build the funding base of our welfare society. Taxation must be implemented fairly and efficiently. The work on reforming the tax agreement with Portugal was a long process. Negotiations have been going on for many years, and last August I took the matter for the first time to the ministerial level,” said Stubb.

 

“This spring, we were even prepared for termination of the present agreement. I am very satisfied that this work has yielded a successful outcome and that a new agreement will arise,” he added.

 

Preparations for signing of the agreement are now under way, and Finland’s aim is to sign the agreement as soon as possible, said the release.

 

The details of the new agreement would be announced, it mentioned.

 

The existing agreement between Finland and Portugal dates from 1970. The reform of the agreement has been Finland’s goal for over two decades.

 

The outdated agreement no longer corresponds to the current OECD model tax agreement or to the tax agreement policy followed by Finland.

 

The reform of the article on the taxation of pensions is particularly long overdue. Finland has also sought taxation of private-sector pensions in the source country. Currently, it is only possible to tax public-sector pensions in Finland.

 

Tax agreements also ensure, in principle, that double taxation does not take place.