Finland - Company tax - corporation tax
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* Information not yet provided by national authorities
When you set up your company, you should ensure that you do the following:
- Register for company tax Start-up notification
- Keep accounting records
- Prepare a company tax return
- Apply for an advance tax rate Advance tax must be paid on commercial activities, agriculture, or other income-generating activities, such as income from rentals and capital gains. Advance payment of taxes means the Finnish Tax Administration sets the tax to be paid by companies and corporations in advance.
Submit your company's tax declaration by the deadline. The deadline depends on the form of the company.
- Limited companies, cooperatives, societies and foundations must submit their tax declarations within four months of the closure of the accounting period.
- Business owners and professionals must submit a business tax declaration by 3 April 2017. The return date may also be 9 May 2017 or 16 May 2017 - check the form for the last day for returning the declaration. Spouses of entrepreneurs should also submit their tax declaration at the same time.
- Partnerships and limited partnerships must submit their tax declarations by 3 April 2017.
- Farmers must submit their tax returns by 28 February 2017.
What profits do you pay company tax on?
In the Finnish taxation system, the taxable income of legal persons is calculated according to the source of income. There are three sources of income: business activities, agriculture and other activities.
Business and professional activities are considered to be business activities (Business Tax Act, Section 1). Taxable business income is income received from business activities in the form of money or benefits having a monetary value.
Agriculture means conventional agriculture and special agriculture or other activities relating to agriculture or forestry which is not considered to be another type of business (Section 2(2) of the Farming Income Tax Act, MVL).
Sources of income from other activities also includes income that is not income from business activities or agriculture (Section 2(1) of the Income Tax Act, TVL). The same principle also applies to portfolio investments. Besides portfolio investments, accommodation rented to third parties or rental income from property may count as sources of income from other activities.
Paying income tax to Finland
Activities carried out by a foreign company in Finland may constitute a fixed establishment in Finland for the purposes of income tax. If so, the foreign company will have to pay income tax to Finland on its business income. Tax must be paid to Finland on some income, even where there is no fixed establishment. Such income includes income from renting or selling property.
Foreign company with a fixed establishment in Finland
Changes to corporate income taxation, advance taxation and tax collection at the end of 2017.
The Government proposal for legislation revising advance taxation and certain other tax procedures was approved by Parliament on 20 December 2016. The legislation will enter into force on 1 November 2017 and will generally apply for the first time to corporation tax and tax on joint interest groups in the 2017 tax year.
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