Foreign business in Finland

The obligations of a foreign company depend on its line of business, the type of assets present in Finland, and whether the company has a permanent establishment in Finland. Permanent establishment rules in Finland differ slightly for the purposes of VAT and income tax.

Notices to be filed on starting up and on changes

You must file a 'Y' form to notify of starting up a business, of any changes in it, and of going out of business. It is enough to simply complete one 'Y' form for both the Tax Administration and the Trade Register. When we receive the completed form at the Tax Administration, we will enter the business in the appropriate official registers and also establish whether it should be treated as having a permanent establishment for purposes of income tax as well as for purposes of VAT.

Visit to download 'Y' forms.

Paying Finnish income taxes

Foreign businesses must pay income tax to Finland if it has a permanent establishment in Finland. However, some categories of income entail the liability for Finnish income taxation even if the company does not have a permanent establishment. Examples of those income categories include rental income from real estate, and income from sales of real estate.

VAT registration

Foreign companies must become VAT registered if VAT is to be charged on their sales of goods or services, and if the operation gives rise to a permanent establishment for VAT purposes. In addition, certain circumstances require that foreign business must be entered in the register even if their operation in Finland does not constitute a permanent establishment. Examples of these situations include the case when the customers who buy the goods and services are private individuals.

Foreign companies have the option to apply for VAT registration on a voluntary basis in situations where there is no direct obligation to do so.

Employer obligations

Foreign companies must always submit an Employer Payroll Report to the Tax Administration on any and all wages paid to employees who are Finnish tax residents.

In addition, the same employer obligations as concern Finnish businesses are in force for the foreign businesses that are deemed to have a permanent establishment in Finland, and for those that have voluntarily become registered as employers.

Starting up business in Finland - foreign company

To begin operating a business in Finland, the Start-up notification form should be submitted to the registration authorities.

Obligations of a foreign employer

If you have a business based outside Finland that pays wages to an employee working in Finland, you may have tax and social security-related employer obligations to fulfil.

Foreign leasing corporations

If a foreign agent arranges to lease employees to work for a business in Finland, it has certain obligations as a employer in Finland.

Permanent establishments in income taxation

Permanent establishment rules in Finland are slightly different for VAT taxpayers, on the one hand, and for a nonresident's liability to pay Finnish income tax, on the other hand.

Reporting changes in the Finnish operation - foreign company

You are expected to inform the Finnish Tax Administration of any changes in your business operation.

Going out of business

Foreign companies are always expected to let us know when they terminate business in Finland.

Refunds of tax withheld at source

Foreign businesses must pay income tax on their receipts of income from Finnish sources. Payers must withhold tax at source. The rate of withholding depends on the provisions of the applicable bilateral tax treaty between Finland and the country of residence of the foreign company.

Income tax returns from foreign companies

Foreign companies must file an income tax return or give a report of their operations if they receive a tax return form or a request from the Tax Administration to provide such information.

Filing Finnish income tax returns – non-resident self-employed individuals

Self-employed individuals must file an income tax return in Finland to report the important facts about their business if they are registered in Finland and have a Finnish Business ID.

Filing Finnish income tax returns – general and limited partnerships

Foreign general and limited partnerships must file an income tax return if they are registered in Finland and have a Finnish Business ID.


Go to Glossary to look up important tax concepts and terminology.

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Information about taxation for employees, employers and entrepreneurs.

Information about taxation in Finland for employees, employers, enterprises and self-employed persons.

Important Dates and Deadlines

Last Update: 3/12/2014