Dispute Powerhouse

Integrated full service conflict resolution

Share this

Prevention of disputes is the key. The most successful resolution of a dispute is preventing it from ever existing.

Jussi Lehtinen, Partner

We have an exceptional track record of winning 9 out 10 disputes in the past 8 years.

Jussi Lehtinen, Partner

Prevention of disputes is our ultimate goal. When it’s not an option, we focus on winning.

Jussi Lehtinen, Partner

Many of our lawyers are recognized as leading dispute resolution lawyers in Finland by Chambers & Partners, the Legal500 and Who’s Who Legal –Arbitration Future Leaders.

Knows litigation procedures very well.

The Legal 500 2017, Dispute resolution
Dittmar & Indrenius > Services > Dispute Powerhouse

We offer integrated dispute resolution services combining in-depth knowledge of all our specialist areas of law and industry sectors with unparalleled experience in advocacy, mediation and settlement negotiations.

We are known for our success in challenging international arbitration proceedings, complex commercial litigation as well as high-profile cartel damages litigation proceedings.

We serve our demanding corporate clients in preventing and resolving all commercial conflicts, often involving complex cross-border elements requiring professional experience from various different jurisdictions.

In addition to arbitration, mediation and alternative dispute resolution as well as commercial litigation and administrative proceedings, we regularly advise our clients on disputes relating to taxation, IPR, employment, competition, data protection and cyber security matters, as well as relating to M&A and other  transactions.

In each project we join forces with relevant practices and industry groups working as one team, in one efficiently managed process with one point of contact in constant interaction with our client. Centered around our clients’ needs and aligned with their best interests, we utilise optimised case management techniques including cutting edge artificial intelligence tools and our signature protocol “Playbook” setting out step-by step detailed procedures for the arbitration or litigation proceedings that have in the past led to favourable results.

Powerhouse is much more than a philosophy to us. It represents our ambition for excellence and thinking ahead for the benefit of our clients. To find continued, sustainable success, we sometimes have to look at creating solutions for problems that are not yet recognized. Our D&I Powerhouse service method allows us to offer our greatest capacity for supporting our clients’ objectives and growth.

Main contact: Jussi Lehtinen, Partner

Team

References

Latest Insights

insight
Draft Government Proposal on International Tax Dispute Resolution Mechanisms
29 Aug 2018 The Ministry of Finance of Finland has issued a draft government proposal on international tax dispute resolution mechanisms on 27 August 2018. The draft proposal implements the Directive on Tax Dispute Resolution Mechanisms in the European Union (2017/1852, the "Directive"). In addition, the proposed new legislation addresses certain other tax dispute resolution mechanisms related to the interpretation of tax treaties. The aim of the new legislation is to enhance the resolving of international tax disputes and to avoid double taxation in cross-border context. Summary of the Proposed Tax Dispute Resolution Mechanisms The following table illustrates the main changes to the current processes and contents of the draft proposal on a high level.   Timing of the Legislative Process The draft proposal is currently under public consultation. The contents of the proposal are therefore subject to change. The new legislation is proposed to apply to applications filed on 1 July 2019 or thereafter which concern tax years started on 1 January 2018 or later. However, part of the new legislation, such as the obligation to choose between the tax dispute resolution mechanisms and the domestic appeal process, is applicable to all applications filed on 1 July 2019 or thereafter. Reflections on the Draft Government Proposal Many of the proposed changes provide long-awaited procedural rules for tax disputes relating to the interpretation of tax treaties. Currently, most of the relevant procedural provisions are outdated and not explicitly applicable to international tax dispute resolution processes. Implementation of the Directive provides more effective means for taxpayers to eliminate double taxation between EU countries since the threat of binding arbitration can be expected to encourage the competent authorities to negotiate, and ultimately double taxation should be eliminated through arbitration. This type of process is currently only applied in transfer pricing disputes involving EU countries. The draft proposal also includes certain changes to the current processes which can in many cases limit the taxpayers' legal remedies. The taxpayers would in practice need to choose whether to refer the case to a tax dispute resolution process under the proposed legislation or the domestic appeal process. This would increase the importance of the strategic decisions taken during a tax audit phase regarding potentially threatening cross-border tax disputes. Since this provision is proposed to apply to all applications filed on 1 July 2019 or thereafter, regardless of the tax year the application covers, the draft proposal may have great relevance in many of the cross-border tax disputes pending today. One aspect which the draft proposal seems to ignore is the extension of the suspension of tax enforcement to the tax dispute resolution processes under the proposed legislation. Currently, it is possible to request the temporary postponement of the payment of taxes only during domestic appeal processes. If this discrepancy is not fixed, it may render the use of tax dispute resolution mechanisms a less attractive alternative in many cases. We are happy to discuss the implications of the proposed legislation in concrete situations as well as keep you updated on the legislative process.
insight
Transfer Pricing Related Tax Disputes - Significant Risk for Multinational Enterprises
18 Jun 2018 During the past years, the Finnish Tax Administration has carried out a number of tax audits focusing on transfer pricing. The tax audits have lead to significant adjustments to the taxable income of the Finnish entities. The Tax Administration has recently published statistics which reveal that the taxable income has been adjusted in 34 out of the 63 transfer pricing tax audits carried out in 2012–2017. The total amount added to taxable income in these tax audits is astonishing EUR 3.048 billion. This means that on average the additional taxable income added based on a transfer pricing tax audit has been close to EUR 90 million. As a consequence, the amount of additional taxes and other payments, such as late payment consequences and potential punitive tax increases, subject to a dispute can often be tens of millions – or even hundreds of millions.                   Some of these transfer pricing disputes have already been resolved in courts. However, many of the above mentioned disputes are still pending due to the length of the appeal processes. Respecting the Chosen Form of Transaction Is Often the Core Legal Question in the Disputes One of the most significant legal questions in the transfer pricing disputes is the borderline between recognition of the actual transaction and re-characterization of a transaction. Recognition means respecting the form chosen and followed by the taxpayer and assessing whether its pricing is at arm's length. In contrast, when a transaction is re-characterized, taxation is based on the form unrelated parties would have chosen (e.g. sale is considered an arm's length transaction form instead of lease). The Supreme Administrative Court has confirmed that re-characterization is unlawful in the context of transfer pricing adjustment (KHO 2014:119; requirement to respect the chosen business model was confirmed in KHO 2017:145). Re-characterization is only allowed when the general anti-avoidance provision is applicable which requires e.g. that there is an intention to achieve inappropriate tax benefit through an arrangement which is not supported by sufficient business reasons. Since this is usually not the case in the transfer pricing disputes, the Tax Administration's authority is often limited to assessing the pricing of the actual transaction carried out between group companies. Regardless of the Supreme Administrative Court's published case law, disputes around the concepts of recognition (or delineation) and re-characterization continue to surface. When Facing Litigation the Taxpayer Needs to Prepare for a Complex and Lengthy Process Litigation phase in a transfer pricing dispute is often complex and the processes tend to last for several years. There are often several areas subject to dispute; understanding of the facts, legal basis for the transfer pricing adjustment, pricing and valuation, and often also tax procedural questions. The challenge is to present the multidimensional case, usually following extensive correspondence with the Tax Administration in the tax audit, in an understandable way to the Board of Adjustment and the courts. In many of the major transfer pricing disputes the case has ultimately been decided fully or partly in favor of the taxpayer in the appeal process. Prudent planning and good argumentation are essential to overturn the Tax Administration's position. In transfer pricing cases there is also possibility to refer the case to a Mutual Agreement Procedure between the countries involved. This can take place instead of or after the domestic appeal process. In the Mutual Agreement Procedure the authorities from both countries negotiate how the double taxation can be eliminated. The process is most effective between EU Member States whereas with other countries there is no guarantee that the authorities reach a conclusion at all.

Share this

Dittmar & Indrenius