Late last year, Finland hammered out a new tax deal with Spain that would allow tax officials to get their hands on the private pension incomes of Finns living in the Mediterranean country.
However according to a statement from the Finance Ministry, officials will not begin to apply the rules of the treaty at the beginning of 2017 as originally anticipated. The ministry said that the treaty will instead come into force in 2018, at the earliest.
The ministry attributed the delay in adopting the treaty to an ongoing political crisis in Spain. The country has not had a functioning government for more than nine months.
The ministry release explained that each country is required to inform the other when they have completed the procedures needed to enforce the agreement.
While Finland has already implemented the required measures, Spain has not been able to do the same because it has not had a government to get Parliamentary approval for the agreement.
Even after both countries have given notification that they have fulfilled the necessary requirements, it would take another three months before the deal could take effect. After that, applying the new rules would not happen before the start of the next calendar year, the ministry said.
The new bilateral tax agreement between Finland and Spain was signed last December by then-Finance Minister Alexander Stubb. Currently tax officials can only tax public pensions paid to Finnish residents in Spain.