Finland Supreme Administrative Court Clarifies VAT Treatment of Transactions Involving Jointly Owned Forests

The Finnish Supreme Administrative Court March 20 posted online Decision No. KHO:2026:18, clarifying the VAT treatment of transactions involving jointly owned forests. The taxpayer, a jointly owned forest acting as a separate legal entity, issued shares in exchange for forest property. The Central Tax Board treated the transfer as VAT-exempt and denied a VAT deduction on directly related costs, allowing only general overhead deductions tied to taxable timber sales. On appeal, the Supreme Administrative Court partially annulled the Central Tax Board’s decision, finding that: 1) the share transfer in exchange for forest property fell outside the scope of VAT because ...