How to fill out Form 6B, Tax return on business activities – corporation, 2020

Tax year 2020

  • When you complete the tax return and its enclosures, you must fill in all the spaces and lines that concern you.
  • Enter all amounts of money with the cents included; do not round them out to the nearest euro.
  • If your corporate entity has more than one accounting period ending in the 2020 calendar year, you must complete a set of tax return forms for each closing of an accounting period.  The Tax Administration will combine the data from the different periods.
  • Please note that starting 2020, corporate entities (who submit their tax return on this form) are no longer treated as having a "personal income source" for purposes of income-tax assessment (this rule does not apply on nonprofit organisations). Any economic activities were previously taxed as belonging to a "personal" source are now treated as part of the corporate entity's operation, under the act on the taxation of business income.  This includes activities that would otherwise not be regarded as trade or business under the definition of § 1, subsection 1 of the said act.  For more information, see the “guidance on source-of-income rules for dividing the income taxes of certain corporate entities” – Eräiden yhteisöjen tulolähdejaon poistaminen (VH/1881/00.01.00/2019) (in Finnish and in Swedish). 
  • See list of enclosures

Further information will be given by (name, telephone number)

This line is for the name and phone number of an individual who can provide further information to the Tax Administration on the income tax return being filed.

In case of changes in the line of business

This line is for indicating your current line of business if you operate in a new sector.

Enter the new line of business according to Standard Industrial Classification, TOL 2008.

See the sector codes on the website of Statistics Finland

If you file this tax return in MyTax, information on your line of business is saved in your “taxpayer details”, and you do not have to fill in this space. If you move on to a new line of business, you can inform the Tax Administration of it immediately.

Has activity in Finland (mainland) and Åland Islands

Tick this box if the corporate entity engages in business activities both in Åland Islands and on the mainland.

You must tick this box also if

  • your corporate entity operates only in Åland Islands but its registered domicile is in mainland Finland, or
  • its registered domicile is in Åland Islands and it operates in mainland Finland.

Enclose free-text information on how your profits/losses are divided between Åland Islands and mainland Finland.  To give this information, indicate either the percentages or the €€ relating to Åland and mainland, respectively.  The profits subject to tax should be the base. It is not acceptable to set up a calculation based on turnover, net sales etc. in order to indicate the proportions of Åland and mainland Finland.

Åland-domiciled corporate entities must pay municipal tax on all their income to the tax authority of Åland Islands under its local provisions on municipal income taxes (cf. Ålands författningssamling 119/2011).

Under the same provisions, an entity registered in mainland Finland must also pay municipal tax to Åland on the part of its income attributable to the operation in Åland. However, under the Finnish act on income tax (Tuloverolaki 1535/1992), all corporate entities must pay income tax at the 20-percent rate, the proceeds from which are distributed between the State of Finland, municipalities, and the parishes of churches. This would mean double municipal taxation for corporate entities operating in Åland Islands. This double taxation is eliminated either by the Provincial Government of Åland or by the Tax Administration, depending on the company's domicile.

You do not conduct business

MyTax: Does the company only have other activities than business operations?

This field is for informing the Tax Administration that the corporate entity does not operate a trade or business, under the definition of § 1, subsection 1 of the act on the taxation of business income (Laki elinkeinotulon verottamisesta 360/1968).

If your corporate entity has other activities in addition to its trade or business, it is treated as operating a trade or business under § 1.1 of the act. If instead,  your corporate entity is entirely engaged in activities other than trade or business, it is regarded as an entity with no trade/business operation. Other activities can include a rental operation where the tenants are non-associated outside parties, or the holding of securities as a passive investment.

Has IFRS financial statements

Tick this box if your P/L and balance sheet are compliant with the standards (IAS/IFRS or GAAP) (under the provisions of Chapter 7, Accounting Act).

Has to prepare Transfer Pricing Documentation (§ 14 a, VML) (complete Form 78)

Tick this box if your corporate entity must prepare documentation on transfer pricing. If you ticked the box, you must also fill in Form 78 (Explanation of transfer prices).

Transfer pricing documentation is required when transactions have been made between group companies in an associated relationship if the other party to the transaction is a foreign enterprise, or if the transaction was conducted between a foreign enterprise and its permanent establishment located in Finland (§ 14 a, VML).

Parties to a transaction are in an associated relationship if one of them has a controlling interest and power over the other, or if there is a third party that can – either alone or together with a sphere of influence – control both of the parties to the transaction (§ 31.2, act on assessment procedure).

Transfer pricing documentation must be submitted by businesses that fulfil at least one of the following conditions:

  • It has at least 250 employees.
  • It has more than €50 million of net sales and more than €43 million of balance-sheet total; or
  • It has at least 250 employees.
  • It has more than €50 million of net sales and more than €43 million of balance-sheet total; or
  • It is an entity not regarded as a small or medium-size enterprise under the definition of the Commission Recommendation 2003/361/EC.
    When considering this condition, it must be taken into account that for most entities, the mere fact that it is part of an international group makes the small or medium-sized company operating in Finland liable to prepare transfer pricing documentation. When the threshold values regarding employees, net sales and balance-sheet total are examined, the entire group of companies is in focus because of the ownership circumstances.

Read more Transfer Pricing Documentation, in Finnish and Swedish.

Has received shares through a swap during the tax year

Tick this box if either of the following conditions is fulfilled:

  • During the tax year, your corporate entity has received shares of another company in a swap (within the meaning of § 52 f of the act on the taxation of business income "EVL"). It now holds more than half of the votes of the other company; or
  • your corporate entity has already held more than half of the votes and has recently bought some more shares, paying for them with an issue of its own shares to the shareholders of the other company.

2 List of shareholders, shares held, amounts borrowed, etc.

This section is for giving details on company shareholders, and on the loans issued and other payments made to them and their family members.

A shareholder can be a natural person or a legal person.

When reporting the details of a legal person that is a shareholder, include only the legal person’s name, Business ID and how many shares it holds.

If there are 1 to 10 shareholders, give details on each one.

If there are more than ten shareholders, give the details only of those shareholders who hold at least 10%.

If every shareholder owns less than 10% of the company, you do not have to fill in this section. In such a case, tick the box "All shareholders own less than 10%".

However, if there are any beneficiaries of shareholder loans among them, you must give their details and their family members’ details, regardless of the sizes of their holdings.

Additionally, an annual information return must be submitted in order to give details on a shareholder loan if the shareholder, the shareholder's family member or they together own at least 10% of the company shares, directly or indirectly, or they hold a corresponding share of votes.

Example: The husband owns 5% and the wife owns 10% of the corporate stock. There are nine other shareholders, but every one of them has less than a 10% holding. In 2014, the husband received a loan of €10,000 from the corporate entity. In 2020, the wife received €5,000. You must complete the "2 List of shareholders, shares held, amounts borrowed" section at the end of the 2020 accounting year, filling in both the husband's and the wife's details and loan amounts. You must also file an annual information return in order to give details on the wife's loan for which the date of receipt is in 2020. You must do so because together, the husband and wife now own more than 10% of stock.

a) Shareholder’s name

The name must be reported even if no loans have been issued or other payments made to the shareholder. 

In addition, give the shareholder's family member’s name if a loan has been issued or a payment made to a family member of a natural person who is a shareholder, such as spouse, child, parent or other family member closer than a cousin.

b) Personal identity code or Business ID

Natural persons

Fill in the shareholder's personal identity code.

Family member's personal identity code must be filled in as well if a payment was made or a loan was given to family member(s).

Fill in the person’s Business ID if the person has one (instead of the Personal identity code).

If there are shareholders who are citizens of other countries and have no Finnish personal identity codes

  • if you are filing this return online or in MyTax, enter DDMMYY-UUUU (or date of birth-UUUU) as the personal identity code
  • if you are filing the paper form, leave blank.

Legal persons and companies

If a shareholder is a legal person, enter its Business ID.

If there are shareholders that are foreign corporate entities with no Finnish Business ID

  • if you are filing this return online or in MyTax, enter 0000000-0 as the Business ID
  • if you are filing the paper form, leave blank.

Number of shares

Indicate how many shares are owned by the shareholder (do not fill in a percentage).

Note: you must indicate how many shares they hold, even if no loans have been issued or other payments made to the shareholder.

Payment(s)

Do not fill in any payments for which your corporate entity (being the employer) submits an annual information return. The only exception is shareholder borrowing: the details on loans to shareholders must be given on this form and also on information returns.

Annual information returns must be filed for paid wages, fees, fringe benefits, allowances for travel expenses and voluntary pension insurance contributions. In addition, an annual information return must be filed for dividends, so they are not entered here either.

Rent

The total of rent payments made to a shareholder or family member during the accounting year (accrual basis).

Interest

The total of interest payments made to a shareholder or family member during the accounting year (accrual basis).

Assets sold

The total of payments made to a shareholder or family member during the accounting year (accrual basis) because they have sold something to the corporate entity, including real estate property, residential or other apartments, securities and motor vehicles.

Other

The total of other payments made to a shareholder or family member, including commissions paid for designating a shareholder-owned asset as a security.

Shareholder loans

Shareholder loan granted to the shareholder or their family member.

Enter the loan balance as it is in the 2020 balance sheet.

All shareholder loans must be accounted for. Give details on the shareholder loans subject to reporting on annual information returns and tax treatment as capital income, and on the shareholder loans for which no annual information return is necessary.

An annual information return must be submitted per calendar year, in order to give details on any loans granted to shareholders, or paid back by a shareholder, if the shareholder-borrower (a natural person), a member of his or her family, or they together, hold at least 10% of the shares or votes. “Family members” include the shareholder's spouse and children under 18.

More than 4 shareholders

Tick this box if you enclose Form 72 in order to give details on the shareholders and the payments made to them.

All shareholders have less than 10% holding

Tick this box if all shareholders own less than 10%.

If there is no shareholder that would hold more than 10% of your corporate stock, you must give the details of those shareholders and family members who have borrowed money during the tax year or previously.

3 Residential property owned by company and used, during the acc. period, by majority shareholder/family

This section is for giving details on any apartments/real estate where a majority shareholder or family members have lived, in the course of the accounting period.

If there is other company-owned property (such as a summer cottage), give details on who has used them and how.

There is space for the details of one residential property only. If a majority shareholder or family has been using more than one company-owned property, enclose a free-text account on an additional sheet of paper.

If a residential property is used by more than one majority shareholder, you must give the details of the shareholder who owns the most shares.

Identity number

The majority shareholder’s (=shareholder-entrepreneur’s) personal identity code.

“Majority shareholder” refers to a person who is in a managerial position in the corporate entity and holds over 30% by him/herself or over 50% together with their family of its shares or votes.

Name of real estate unit/property, real estate company or housing company

Fill in the name as appropriate.

Live-in period

Indicate when, during the company's accounting period, the shareholder or their family have lived on the property or in the apartment.

Value used in the calculation of net worth

Enter the same value for the residential property as in this tax return's asset calculation 9 Assets. If only part of the property (not all of the rooms) was used by the shareholder or family, enter a value corresponding to this part as the value of the property.

Real estate property must be valuated at its undepreciated acquisition cost or at its tax value, whichever is the higher.

  • If you have many units of company-owned residential property, perform a comparison on Form 18.

Apartments in housing companies must be valuated at their undepreciated acquisition cost or their latest tax value, 2005 tax year, whichever is higher.

  • Perform a comparison on Form 8A.
  • If your corporate entity has bought the apartment in 2006 or later, a comparison is not performed; instead, enter its undepreciated acquisition cost. If a reserve in the balance sheet has been utilised when paying for the apartment, the amount utilised must be added to the value.

The value of the residential property is deducted from the total value of the shares held by the majority shareholder for purposes of dividing their receipts of dividends in earned income and capital income.

4 The decision on profit distribution (leave blank if no distribution is made)

Distribution of dividends or surplus

Date when distribution was agreed (ddmmyyyy)

Give details on the distribution of dividends or surplus Form 6B (this tax return) if the general meeting of shareholders has made its decision on the distribution of 2020 dividends, and adopted the balance sheet and other financial statements for 2020, before you file this return. Also, enclose an excerpt from the minutes of the annual general meeting with the tax return.

If a decision on the distribution of dividends, distribution of additional dividends, distribution of surplus or adoption of the balance sheet and other financial statements for 2020 is made after you file the return, the information must be sent to the Tax Administration within one month of the decision.

If you file electronically, you can sign back anytime later in order to add more information.

If you opt to file on paper, use Form 63 and enclose a copy of the excerpt of the minutes from the meeting of shareholders.

Send the paper form and cover page to:

Finnish Tax Administration
OCR Service of corporate taxpayers’ returns - Yhteisölomakkeiden optinen lukupalvelu
P.O. Box 200
00052 VERO

If dividends are distributed mid-year or distributed for the previous accounting period, you must invariably enclose a separate explanation of the facts and circumstances. Distributions of dividends taking place after the tax return is filed must be reported on Form 63 or on an excerpt of the minutes from the meeting of shareholders, enclosed with Form 63.

Read more: Dividends and surplus based on work effort (in Finnish)

Additional information on the asset distribution and surplus of cooperatives (in Finnish)

Date when dividends or profit surplus can be drawn/payment begins

These fields are for the dates when dividends or surplus can be withdrawn i.e. the first day when shareholders can receive the money. If the dividends or surplus can be withdrawn in more than one instalment, submit a separate enclosure to provide an account. In this situation, enter the date when the first instalment could be withdrawn/received.

A specific annual information return must be submitted by the end of January 2021 for dividends or surplus withdrawable in 2020. You can file it electronically or on a paper form: Annual information return on dividends (in Finnish)

The total amount to distribute

The total distributable dividends or profit surplus for the 2020 accounting period (as the principal distribution of profits), as agreed by the shareholders’ general meeting.

If you distribute no dividends or surplus, leave the entire section blank.

Also include any dividends/surplus paid out to shareholders from an unrestricted reserve of retained earnings.

Under Companies Act, it is permissible to distribute profits for an accounting period that is still ongoing (as interim dividends, "väliosinko" in Finnish) and to distribute dividends for the previous accounting period, when a new financial statement is not yet complete or audited. In taxation, these dividends are also considered to have been distributed for the accounting period closed last. However, these dividends are not entered in this line; instead, you must write up a separate enclosure to account for them.

If a consolidated enterprise has distributed dividends from one subsidiary company to another (or to parent) in advance, the distributing company must enter the amount of dividends here according to its advance decision i.e. the amount agreed by its shareholders’ meeting.

Dividends paid by a substituting entity are not entered here.

In situations involving corporate restructuring, it is worth noting that a divided, de-merged company can no longer distribute dividends after the restructuring, because the company no longer exists. See the guideline "Corporate restructuring and taxation – demergers (in Finnish)" for more details on the prerequisites for a company established by division can distribute dividends before its shareholders’ meeting has adopted its first financial statement.

Distribution from an unrestricted-equity fund/invested equity

Enter information on the assets that, as agreed by corporate shareholders, will be distributed from the company's unrestricted equity fund (Chapter 13, §1.1, Companies Act; Chapter 16, §1.1.1 of the Act governing cooperative societies). This line is only for the type of distribution that is considered an actual transfer of assets.

Do not enter the amount of dividends or surplus in this field; it is the previous entry (Total dividends or surplus to be distributed).

Enter the date when the decision on the distribution was made.

Enter the date from which the shareholders have been able to receive the money.

Enter the part of the money that have been ready for receipt by the shareholders during the tax year.

Date when distribution was agreed (ddmmyyyy)

Enter the date when the decision on the distribution was made.

Date when payment begins (ddmmyyyy)

Enter the date from which the shareholders have been able to receive the money.

Total amount agreed to be distributed

Enter the part of the money that have been ready for receipt by the shareholders during the tax year.

5 Changes in subscribed share capital after the close of the accounting period

Share capital was raised by

Enter the amount of the increase if your share capital was increased after the close of the accounting period 2020.

Share capital was lowered by

Enter by how much your capital was reduced after the close of the 2020 accounting period.

Number of shares after change

Enter how many shares your corporate entity has after the change.

Nominal value/book value of one share

Enter your share's nominal or book value.

Subscription price of a new share

Enter how much it costs to subscribe a new, issued share.

Subscription price is determined on the basis of the mathematical value of one share

Tick the Yes box if you wish the subscription price of a new share to be used as the mathematical value of the new share when dividends are divided into capital income and earned income in the hands of your shareholders. Otherwise, the division is done based on the share's nominal value or par value in accounting.

Raised capital

Indicate whether a paid-in investment by the shareholders was necessary or whether the capital for the increase of share capital was raised without such a payment.

Company redeemed/purchased/sold its own shares

Tick this box if, after the close of the accounting period, the company has redeemed or otherwise acquired its own shares or disposed of them.

Quantity of own shares held by the company at the end of the accounting period

Indicate how many of your company's own shares are held by the company itself at the end of the 2020 accounting period.

The calculation of the comparison value of the share for 2020 will also take account of:

  • any changes in share capital that have occurred during the next accounting period, soon after the closing of the 2019 period
  • any purchases, redemption and disposal of the company's own shares.

You must inform the Tax Administration of any changes that may occur after you submit this tax return. The deadline for doing so is within one month of the date of the change.

Note: this field is only for the shares that your company itself holds. It means the shares being in the possession of the company – it does not mean the total quantity of shares.

Calculation of taxable income (EVL (=business tax act))

Enter your taxable revenue and tax-deductible expenditure, derived from business and other activities, in the Tax Accounting column of the ‘Calculation of taxable income’.

The ‘Calculation of taxable income’ section has a separate Accounting column for any income and expense items where the amount recorded in the accounts may be different from the amount used for purposes of taxation.

Fill in both the columns even if the amounts were equal.

To arrive at your net taxable income for the year, the Tax Accounting column is used. The revenues subject to tax of the "6 Business income" section are adjusted by deducting the expenditure in "7 Business expenses".

Note: The calculation of taxable income is only for the revenue and expenditure that relates to your business source of income, not other sources of income. The business source of income consists of the operation of a trade or business, as referred to in § 1.1 of the act on the taxation of business income, and of other activity if it is taxable in accordance with the act on the taxation of business income.

A personal source of income connected to a corporate entity as a taxpayer

Corporate entities can only have a personal source of income if the corporate entity promotes the public good, i.e. is a non-profit organisation. Starting from the 2020 taxable year, the other activity of corporate entities is treated as relating to the entity’s business source of income. Consequently, if income is received from the “other” activity, that income is taxed according to the provisions of the act on the taxation of business income.

Credit institutions, investment service companies, and insurance companies

If you are one of the above, you are not expected to complete the Calculation of taxable income section (Taxable profits / allowable loss).

You must complete Form 77 instead, reporting the profit or loss from business activities.

Form 77 with instructions (in Finnish) 

Entering amounts of money

Enter the euros and the cents; do not round out the amounts, and do not use a plus or minus sign. The default rule is that any revenue will increase profits and any expense will decrease it. For this reason, plus and minus characters are not necessary. However, if you enter an amount that does not follow the logic of the above default rule, you must enter a minus sign (-) before the amount.

Example 1: A corporate taxpayer reports a net sales figure that is negative. Enter a minus in front of 1 Net sales (section 6, Business income).

Example 2: A corporate taxpayer received a large refund of its leasing fees, which makes the balance of this expense item the inverse of what it usually is. You must enter a minus sign in front of the entry in 4 Leasing costs (section 7, Business expenses).

6 Business income

1 Net sales

Enter the net sales as recorded in your accounting system.

Net sales (=turnover) comprise the sales income from your primary operation, minus any discounts granted, minus VAT, and minus any other taxes that depend on sales volumes.

If your net sales include dividends, you must report them in 4 Financial income (Receipts of dividends and profit surplus) and deduct them from the net sales figure.

2 Own consumption of goods or services produced

Enter the consumption for your own use as it is in your accounting system.

3 Other operating income

Capital gains from selling shares included in the fixed assets and from liquidation of assets

Accounting column:

Enter the total amount of capital gains from the selling of shares included in your fixed assets, and your gains from liquidations, as it is on your accounting books.

Provide an itemisation on Forms 71A and 71B of the capital gains from selling shares included in fixed assets, and from liquidations, as follows:

  • Enter the items that have no effect on taxation i.e. the tax-exempt capital gains and non-deductible capital losses on Form 71A.
  • Form 71B is for any capital gains, and gains from liquidations, that are subject to tax, and for deductible capital losses and liquidation losses. Capital gains and losses relating to partnership interests must also be itemised on Form 71B.
Tax accounting:

Transfer any taxable capital gains from selling shares included in fixed assets, and taxable gains from liquidations, also when they are related to partnership interests, as you had itemized and calculated them on Form 71B. Note: the value for this field is the result from subtraction of the gains/losses that can only be deducted from capital gains from the total capital gains and liquidation gains subject to tax.

Capital gains from selling shares included in fixed assets (not, however, shares in housing companies or real-estate companies) is tax-exempt income if the company has owned at least 10% of the sold or liquidated company for more than a year (§6 b and §51 d, "EVL").

This means that gains from the selling of shares in housing companies and real-estate companies are taxable, gains from the selling of corporate stock held for a shorter time than one year are taxable, and gains from the selling of corporate stock when your ownership interest in the company had been below 10% are taxable as well. The capital gains of a corporation conducting equity investment business are always taxable.

In addition, enter any amounts you may have included in sections 8 and 9 of Form 71A that reduce the tax-exempt selling price. The selling price of shares that can be sold exempt of tax is subject to taxation where the accounting-based capital gain (difference between the selling price and undepreciated purchasing price) is due to one of the following reasons:

  • Write-offs of shares, previously approved in taxation (§42, act on the taxation of business income)
  • Provisions or public subsidies, which had been deducted from the purchase price
  • Deductible capital loss from the sale of shares in a consolidated enterprise between subsidiary companies

Read more: “Tax treatment of the sales of shares that are part of corporate fixed assets” – Yhteisön käyttöomaisuusosakkeiden luovutusten verokohtelu

Capital gains from selling real estate included in fixed assets

Enter any capital gains that you have received from the sale of real estate if that real estate had been booked as part of the fixed assets of your company. Complete and enclose Form 71B to itemise the capital gains received. Enter the sum total in this field.

It may be that there are no capital gains subject to tax remaining, after previous years’ capital losses have been deducted (losses formed in accordance with the act on income tax (Tuloverolaki)). In this case, leave this field blank.

For more information about how capital losses from previous years should be accounted for in the “guidance on source-of-income rules for dividing income taxes of certain corporate entities” – Eräiden yhteisöjen tulolähdejaon poistaminen.

Capital gains for selling other fixed assets

Capital gains for other fixed assets than shares, such as a profit resulting from the sale of a building, from the sale of a land area or fixed assets as referred to in §33 of the act on the taxation of business income.

The provisions of §33 apply to fixed assets with a useful life of no more than three years, any low-value assets, and motor vehicles used in a transportation business.

This line is not for the capital gains from sales of moveable assets if the sale is not entered in the books with a P/L effect (the gain is instead entered in the depreciation account as a difference between book and tax depreciation). Enter such gains in section 13, "Other tax-exempt revenues of the P/L", and the depreciation difference in section 3 (Depreciation and reduction in value of fixed assets), of part 7 (Business costs).

(For more information, see instructions for Form 62, in Finnish and Swedish)

Received subsidies and public support

This line is for grants, supplements and subsidies relating to business activities (from the Ministry of Economic Affairs and Employment, Ministry of the Environment, Business Finland, etc.) that are part of company revenue in the P/L.

Other revenues

This line is for other taxable business revenues (other than the above), and for revenues from nonbusiness activities, included in P/L.

Examples:

  • gains received from a sale of a business unit
  • received refunds of leasing fees
  • received insurance indemnities
  • rental income from real estate property that you have rented out
  • rental income from space used for employee recreation
  • received income from office services that you have supplied

4 Financial income

Receipts of dividends and profit surplus

Accounting column:

This line is for received dividends, profit surplus and other items of profit-sharing nature as recorded in accounting books. In addition, you must enter any advance receipts of dividends as if they were regular dividends. Include any refunds of profit surplus received from a cooperative society that can treat them as a deductible cost (under §18.4 of the act on the taxation of business income "EVL").

Other items of profit-sharing nature under § 6 d, subsection 7 of the act on the taxation of business income are

  • profit shares and interest from a savings bank
  • interest on the guarantee capital of a mutual insurance company or an insurance association.

Enclose an itemisation of the dividends and surplus on Form 73. However, if all your dividends are fully exempt from tax and sourced in Finland, you do not have to complete Form 73.

For more information on the tax treatment of dividend income, see instructions for Form 73 (in Finnish)

“Detailed guidance on dividends” – ohje osinkotulojen verotuksesta (in Finnish) (Osinkotulojen verotus, dnro A148/200/2017) 

Additional information on the asset distribution and surplus of cooperatives (in Finnish)

Tax accounting:

This line is for the taxable part. It must be the same amount that you had entered on Form 73.

If you are an unlisted company receiving dividends of a listed company of which you own less than 10%, the entire amount is taxable income for you. It is also fully taxable for you if the distributing company can treat the dividend payments as a deductible cost. Similarly, refunds of profit surplus, received from a cooperative society (§ 18.4, "EVL") are taxable income if the cooperative can treat such refund as a deductible cost.

In addition, you must enter any REIT-company dividends that you have received because the entire amount is taxable income for you.

In addition, you must enter the taxable part of any dividends that you have received from a Controlled Foreign Company. The same amount must be on Form 74.

Interest received from group undertakings/companies

This line is for any interest you have received on money lent to domestic and foreign companies that are associated with you through consolidation.

  • Example: the interest payments received from companies belonging to the same group (Chapter 1, §6, Accounting Act).

The money lent to such companies may be treated either as a direct or an indirect loan (under §18a.6, and §18a.7, respectively, of the "EVL" act). When a contract between two group companies is in force, specifying a lender and a borrower, it is a direct loan. The parties to a loan transaction are considered “group undertakings or group companies” if one party exercises control within the other or if a third party, either alone or jointly with closely associated parties, exercises control within both parties to the loan within the meaning of §31.2 of the act on assessment procedure (Laki verotusmenettelystä 1558/1995).

A loan is treated as an indirect group-company loan in situations where your company has given a loan to an external party (not a group company) when either of the two following conditions is fulfilled:

  • the group company or group undertaking has a receivable from the external party that has borrowed money, and this receivable is connected to the loan;
  • the collateral for the loan is a receivable, due to a party that is a group company or group undertaking.

Not all interest expenses from indirect debt under § 18 a of the "EVL" act, are necessarily entered in the books as interest expense by companies belonging to the same group (Chapter 1, § 6, Accounting Act). For this reason, the interest expenses to be entered here may deviate from corresponding interest expenses on the books (paid interest to companies belonging to the same group).

This line is additionally for any other revenues referred to in §18a.2 of "EVL" that consist of other than interest income, such as compensation for the use of external funding and compensation for efforts to obtain financing.

Interest income from associated/affiliated companies

Interest income received from companies where there is a participating ownership of shares (Chapter 1, §7, Accounting Act).

This line is additionally for any other revenues referred to in §18a.2, act on the taxation of business income, that consist of other than interest income and are received from associated or affiliated parties, such as compensation for the use of external funding and compensation for efforts to obtain financing.

Other interest income

Other interest income such as bank accounts and bank deposits.

If you receive interest from company shareholders who have borrowed money, do not enter it here because that income is attributable to the corporate entity’s “personal source of income”.

This field is additionally for any other revenues referred to in §18a.2, act on the taxation of business income, that consist of other than interest income and are received from other parties than those listed above, such as compensation for the use of external funding and compensation for efforts to obtain financing.

Shares of profits for consortia

Accounting column:

Enter the amounts as they are recorded on your accounting books.

The share of profits received from a partnership/consortium are tax-exempt income for the recipient.

However, part of income shares (§ 16 and § 16 a, act on income tax (Tuloverolaki 1535/1992)), is taxable income in the hands of the shareholders of the partnership/consortium.

Tax accounting: Taxable portions of profit shares

Enter the taxable income shares of domestic consortia, which are taxable under §16, and enter also the foreign and European profit shares (European Economic Interest Grouping (EEIG)) referred to in §16a, act on income tax.

If you are not yet aware of any shares of income, leave this space blank. Send additional information to the Tax Administration later if the actual size of the taxable share is determined after you file the tax return. 

Capital gains for selling financial assets

This line is for any capital gains that result from the selling of financial assets, such as the gains from the sale of securities that you have recorded among your company’s financial assets.

Income from capital redemption policies and certain insurance policies

Accounting column:

Enter your income derived from insurance policies with a capital-redemption clause, form life insurance policies containing a saved deposit, and from pension insurance contracts (§ 35.1 and § 35 b of the act on income tax).

Tax accounting column:

Enter the part of the above income that is subject to taxation. Tax must be paid on received amounts from a capital redemption policy, or from a life insurance policy, that are part of the company’s business source of income, and for which there is no interest income at a fixed rate (for more information, see § 35.1 of the act on income tax). Such a received amount of income may be an insurance indemnity or an amount paid to you in connection with a repurchase. Your taxable income would consist of the proportional part of the received amount that equals the yield from the savings deposit at the date of receipt. If this kind of income is received, it is treated as income for the ongoing tax year when received. 

In addition, if you receive income in the form of revenue from a life insurance policy containing savings, from a capital redemption policy, or from a pension insurance contract as referred to in § 35 b of the act on income tax, it is treated as taxable income and its amount must be calculated as laid down in § 35 b of the act.

Other financial revenues

Other financial income, such as exchange rate gains.

5 Revaluation gains

Accounting column:

  • Revaluation gains from financial assets as they are in your accounting system (§5 a, subsection 1 of the "EVL" act).
  • Revaluation gains from current assets (§5a, subsection 5).
  • Revaluation gains from fixed assets (§5a, subsection 5).

Tax accounting:

In most cases, revaluation gains are taxable income. This line is for reporting it. However, revaluation gains are tax-exempt income when the depreciation expense of fixed assets, suggested on the basis of the matching principle (for example, within the meaning of § 42 of "EVL") had not been approved as a tax-deductible expense.

6 Group subsidy received

Enter any received payment of intra-group subsidy or contribution. Complete Form 65 to specify them.

7 Income from decreases of reserves

Accounting column:

The reversal (=decrease) of mandatory and taxation-based reserves as they are in your accounting system.

Tax accounting:

Taxable portion of the decreases. Taxable decreases include the following:

  • An unused replacement reserve (§ 43, "EVL")
  • A warranty reserve of a company operating a construction, shipbuilding or metal industry business for the part that exceeds the expenses arising from warranty repairs (§47).

Itemise the reserves that are on your accounting books on Form 62.

8 Shares of profits in a Controlled Foreign Company

This line is for reporting the share of a Controlled Foreign Company's profits that your corporate entity has received. Deduct the corporate entity's share of the same CFC's losses from five previous years, if any, from this amount.

Provide the details of each CFC and calculate your entity's share of the profit or loss of each CFC on Form 74.

A CFC is defined as a company, placed under the ownership and control of Finnish tax residents in its foreign country of residence, and liable there to less than 3/5 of the corresponding Finnish level of income taxation. A permanent establishment of a foreign company located in a low-tax country may also be regarded as a CFC. However, a company that has its tax residence in the European Economic Area or in a tax-treaty country is not considered a CFC if Finland has agreed on the necessary information exchange with said country. In this case, a further requirement for not being considered a CFC is that the company must actually be located in its country of tax residence.

A shareholder is taxed on the profits of the CFC if its ownership either alone, or together with others with the same shared interests, is at least 25% of the CFC, or if the shareholder is entitled to a share of at least 25% of the CFC’s returns that emanate from its assets. If the CFC is a subsidiary or an affiliate, as defined in the Accounting Act, enclose its financial statements for this accounting period and the previous accounting period.

9 Capital gains from other assets

This field is for the capital gains derived from any sales (transfers, conveyances) of assets falling into the “other” category of assets. Complete Form 71B to itemise the capital gains you have received, and then enter the sum total in this field.

It may be that no capital gains subject to tax will remain after previous years’ capital losses have been deducted (losses formed in accordance with the act on income tax (Tuloverolaki)). In this case, leave this field blank.

For more information about how capital losses from previous years should be accounted for, see “guidance on source-of-income rules for dividing income taxes of certain corporate entities” – Eräiden yhteisöjen tulolähdejaon poistaminen

10 Other taxable revenues (not in the accounting period’s P/L account)

This line is for any other taxable income not recorded in the profit-and-loss account.

Such revenues may include the differences that are caused by differing regulations on periodization of accounting and of taxation. The property development business is an example of a sector where these differences may occur.

Read more: “Property development business” – Perustajaurakointiliiketoiminta verotuksessa.

Note: any profit your company may have made by selling some of its own stock is not treated as taxable income. Do not enter it in this field.

11 Taxable business income, total

Enter the total of lines 1 to 10 in the “Tax accounting” column. This represents the total of taxable income derived from the business source of income.

12 Refunds of taxes

Enter any tax refunds that you have recorded as revenue in P/L.

Include any interest that you may have received on the refunds. Such interest is treated as tax-exempt income.

13 Cinema support received

This line is for any receipts of public support for cinematic production (cf. § 6, subsection 1, item 5, of the "EVL" act).

14 Capital gains, indirect income recognition

This field is for any capital gains from the sale of moveable assets subject to wear and tear, covered by indirect income recognition (§ 30 of the act on the taxation of business income).

15 Other tax-exempt revenues of the P/L

This line is for reporting the total of other tax-exempt revenues, recorded in the profit and loss account.

Examples of such revenues include merger profit (§52 b).

Connection fees charged by a corporate entity that maintains an electric power network, a telecommunications, water supply, or district-heating network, are tax-exempt revenues when refunded to you. However, transferable connection fees are taxable income, and they are not entered here (§6, subsection 1, item 3).

7 Business costs

1 Raw materials and services

Purchases, variation in stocks and inventory

Enter the following amounts:

  • Purchase costs of the goods sold during the accounting year
  • Purchases during the accounting period
  • The change in the inventory of finished goods and work-in-progress (either an increased or diminished inventory balance)

External services

This line is for the expenses that your corporate entity has paid for services needed for your production.

2 Staff expenses

Wages and salaries

Wages and salaries as they are in your accounting system.

Pension expenses

Pension expenses as they are in your accounting system.

Other staff expenses

Other non-wage staff expenses as they are in your accounting system.

3 Depreciation and reductions in value of fixed assets

Depreciation

First, complete Form 62 to itemise your depreciation expenses.

Accounting column:

The planned depreciation expenses and depreciation differences that you have included in the P/L as expenses.

Transfer the total from Form 62 to this field.

Tax accounting: Deductible portion

Transfer the depreciation permitted by the act on the taxation of business income (EVL), including additional amounts and specific tax-relief depreciation expenses from Form 62 to this field.

  • Depreciation permitted by the "EVL" act means the tax-deductible depreciation within the meaning of §24, §30-§34 and §36-§41 of the Act.
  • This entry must match the total amount of "EVL" depreciation expenses that you had on Form 62 (items 5 and 6 in the depreciation columns).

Report also any depreciation expenses from previous years that have not been deducted for tax purposes (“reserved depreciation”) and which you are claiming a deduction for this year.

  • Itemise the depreciations that were not approved or deducted in previous years on Form 12A.
  • You must also complete Form 12A for any year when your corporate entity does not use its right of depreciation, i.e. creates a new expense that has not been deducted for tax purposes (“reserved depreciation”).

Although it may be permitted under international accounting standards, no depreciation expenses are acceptable against any assets that you use under a leasing contract. Do not enter such expenses in the Tax Accounting column.

Read more: Instructions for Form 62.

Reduction in the value of fixed assets

Accounting column:

Decreases in the value of fixed assets, as shown by accounting, not reported in the form of depreciation.

Tax accounting: Deductible portion

The part of the reductions in value of permanent fixed assets that is deductible under § 42 of the "EVL" act.

This may only include:

  • Write-offs against the value of securities other than corporate stock
  • Reduction in the value of permanent fixed assets other than land, when the fair market value of the asset/property at the end of the tax year is significantly lower than its undepreciated residual acquisition value.

4 Other expenses relating to operation

Entertainment expenses

Accounting column:

All entertainment expenses recorded in your accounting. For more information, see the Edustusmenot tuloverotuksessa guidance (in Finnish).

Tax accounting: Deductible portion is
  • 50% of the expenses (§8.1.8, act on business tax)

Donations granted

Accounting column:

All the donations that your corporate entity has paid out, as recorded in your accounting.

Tax accounting: Deductible portion

This line is for the deductible part.

Only reasonable donations to a non-profit corporation are deductible, and generally they should be granted for a local purpose or a purpose close to your entity's line of business.

Under certain conditions, corporate entities may also deduct some donations that are granted for the purpose of conserving cultural history or promoting science or arts, and that amount to at least €850 (§ 57).

Capital losses for selling fixed-asset shares or securities; losses from liquidations of assets

Accounting column:

Capital losses from selling corporate stock and shares in partnerships and consortia, if such stock, etc. have been included in your balance sheet under fixed assets.

Complete Forms 71A and 71B to itemise these losses as follows:

  • Form 71A is for the items that have no effect on taxation, i.e. for the tax-exempt capital gains and non-deductible capital losses.
  • Form 71B is for any capital gains, and gains from liquidations, that are subject to tax, and for tax-deductible capital losses and liquidation losses. The deductible capital losses can be either unlimited or they may only be deducted from capital gains during the tax year and the five years following.
  • Capital gains and losses relating to partnership interests must also be itemised on Form 71B.
Tax accounting: Deductible portion

The capital losses for selling shares and partnership interests included in fixed assets with unlimited deductibility. This field is for

  • Capital losses resulting from the fixed assets of an entity that operates an equity-investment business.
  • Losses resulting from the selling of shares in a housing company or real estate company and equivalent, if the sold shares had been part of the assets that serve your corporate entity’ business.

Note: a capital loss is usually non-deductible (and the corresponding capital gains tax-exempt), so do not enter it in this field.

In some circumstances, you can deduct a capital loss only from the taxable capital gains for selling shares included in fixed assets during the tax year, or during the five years following the tax year.

  • Such capital loss deductible from capital gains is deducted already when calculating the taxable portion of capital gains, reported in 3 Other operating income, under 6 Business income. For this reason, the capital loss must not be entered here even in those cases.

For more information, see “The tax treatment of corporate entity’s profits for the sale of its fixed assets” – Yhteisön käyttöomaisuusosakkeiden luovutusten verokohtelu.

Capital losses for selling other fixed assets

Losses from the sale of assets such as land, smaller fixed assets or a motor vehicle that has been used in the transport business (§ 33).

Do not enter the losses that are not entered in the profit-and-loss account (i.e. it is instead entered as a difference between planned and book depreciation). This type of loss is reported under "Other non-deductible costs". The "Depreciation" line in the Accounting column under 3 Depreciation and reduction in value of fixed assets is for entering the resulting change in the difference between planned and book depreciation.

Leasing costs

Leasing costs as they are recorded in your accounting system.

Write-offs within Accounts Receivable

The write-offs within accounts receivable (§ 17.2, act on business tax).

Other deductible expenses related to operation

Enter any deductible costs related to business and to other activity, if any, that are not entered in the lines of the Tax Accounting column as other operating costs under 4 Other expenses relating to operation. Examples of such costs include:

  • Additional personnel costs paid on a voluntary basis
  • Office expenses
  • Motor vehicle expenses
  • IT-related hardware and software expenses
  • Other machinery & equipment
  • Commuting and travel expenses
  • Selling expenses
  • Marketing expenses
  • Research & Development
  • Administrative expenses
  • Other overhead
  • Other business expenses

Also enter the tax-deductible Public Broadcasting Tax and Real Estate Tax paid.

Non-deductible expenses

These fields are for information on non-tax-deductible expenses recorded in company accounting as part of the profit-and-loss account.

Enter the amounts in this list without including them in the Calculation of taxable income.

Direct taxes

This field is for the income taxes that you have recorded as expenses in the profit and loss account. This means that you should enter the taxes that relate to the accounting period on an accrual basis, not only the payments of taxes in advance that were made during the period.

Do not enter real estate tax on this field because it is treated as a tax-deductible expense.

Punitive tax increases and late-filing penalties

All tax increases are non-deductible regardless of what tax is their base.

Also enter any late-filing fee, any discounted late payment interest with relief, late payment interest, or penalty fee for non-filing. These items are not tax-deductible.

Fines and other penalties

Enter any payments of fines, sanctioned penalties, etc. (§16.5, act on business tax).

Merger loss

Loss resulting from a merger (§ 52 b, act on business tax).

Reduction in the value of shares that are included in your fixed assets

This field is for the reduction in the value of shares in your fixed assets.

If a depreciation entry is made due to such write-offs, it is not deductible.

Statutory reserves

Statutory reserves made in accounting. In most cases, statutory reserves are not tax-deductible.

What is meant by “statutory reserves” is the amount of estimated future expenses and losses arising from the obligations referred to in Chapter 5, §14, Accounting Act, for which no exact amount or precise date of payment is known yet.

Such future expenditure and losses may be incurred by a renovation, or teardown, of a production line or facility used in the business, by warranty repair liabilities for sold products, by claims on defective products and by compensation for damages.

A warranty repair provision is tax-deductible, but only in the case of a company in the construction, shipbuilding or metal industry that is liable for the defects in a bridge, airplane, building, or in comparable large units (§ 47). If you have a reserve treated as deductible because it is a warranty-repair provision, enter it in the Tax Accounting column under 8 Increases of reserves.

Other non-deductible expenses

Enter any other non-deductible expenses that cannot be entered elsewhere.

Such expenses include:

  • Expenses incurred as a result of generating or maintaining tax-exempt income. However, if the amount of the expense is higher than the tax-exempt income, the excess is deductible (§16.2, act on business tax = the "EVL" act).
  • Fees paid for creating a connection to an electricity, telecommunications, water supply, sewer or district heating network, and refunded to your corporate entity if it waives the benefit produced by the connection fee (§ 16.3, "EVL").
  • Bribes and benefits of a bribe-like nature given.
  • The amount paid by the corporate entity to buy back its own shares is a non-deductible expense unless the shares had been given to the seller due to an employment contract (§16.9 and §18.3, "EVL").

Financial expenses

Interest paid to group undertakings/companies (§ 18 a, the "EVL" act)

This field is for any interest you have paid on money borrowed from domestic and foreign group companies.

  • Example: interest payments, or interest to be paid, to companies of the same group (under Chapter 1, §6, Accounting Act).

The money lent to such companies may be treated either as a direct or an indirect loan (under §18a.6, and §18a.7, respectively, of the "EVL"). When a contract between two group companies is in force, specifying a lender and a borrower, it is a direct loan. The parties to a loan transaction are considered “group undertakings or group companies” if one party exercises control within the other or if a third party, either alone or jointly with closely associated parties, exercises control within both parties to the loan within the meaning of §31.2 of the act on assessment procedure (Laki verotusmenettelystä 1558/1995).

If your corporate entity has borrowed money from an unassociated party that is not among your group companies, it will still be treated as debt between group companies when either of the following conditions is fulfilled:

  • The group company or group undertaking has a receivable from the external party that has lent out money, and this receivable is connected to the loan;
  • The collateral for the loan is a receivable that would be paid to a group company or group undertaking.

Not all interest expenses from indirect debt under § 18 a of the "EVL" act are necessarily entered in the books as interest expense by companies belonging to the same group (Chapter 1, § 6, Accounting Act). For this reason, the interest expenses to be entered here may deviate from corresponding interest expenses on the books (paid interest to companies belonging to the same group).

Interest paid to associated/affiliated companies

This field is for any interest you have paid to companies where there is a participating interest (Chapter 1, §7, Accounting Act).

Other interest expenses

Other interest expenses, e.g. relating to

  • Accounts payable
  • Bonds
  • Convertible bonds
  • Bank loans
  • Finance-company loans
  • Pension-company loans
  • Bills of exchange

Financial expenses treated as interest paid (§ 18a, "EVL" )

Interest expenses under §18a, subsection 2.2 of the act on business tax

Adjustment of interest expenses (§ 18a, "EVL")

Enter the euro value of how much the deductibility restriction, set out in §18a of "EVL", will restrict the amount you are able to deduct.

Calculate the impact on Form 81 (Account of net interest expenses). Complete Form 81 (Explanation of net interest expenses) if your net interest expenses exceed €500,000. You are expected to complete Form 81 in order to give details relating to all sources of income. However, for purposes of the 6B income tax return, only the portion taxable under "EVL" is relevant. (See item no 8 on Form 81.)

If all the interest expenses of your corporate entity are not deductible, due to the restriction in §18a, you must enter a minus sign and the part you cannot deduct in this field.

Also include any previous years' net interest expense (associated debt) that your company wants to have deducted during the tax year (by claiming it on Form 81).

Example 1:
The net interest expenses of a corporate entity are €1,300,000. You fill in Form 81 in order to see how much this corporate entity cannot deduct due to the tax rules on restricted deduction rights of interest expenses. The results of your calculation on Form 81 show that the €1,300,000 can be deducted in its entirety. The corporate entity has no non-deductible interest, and its deductible net interest expense has already been reported in the tax return lines prior to this line. Leave this line empty.

Example 2:
The net interest expenses of a corporate entity are €1,100,000. You fill in Form 81 in order to see how much this corporate entity cannot deduct due to the tax rules on restricted deduction rights of interest expenses. The calculation results show that €250,000 can be deductible, so €850,000 must remain undeducted. This means that you must enter –850,000 euros i.e. the impact of the restriction in this line. As a result, for purposes of deduction, the entity’s interest expenses (on other lines prior to this line) are by €850,000 lower.

Example 3:
The net interest expenses of a corporate entity are €1,300,000 for the tax year. You fill in Form 81 in order to see how much this corporate entity cannot deduct due to the tax rules on restricted deduction rights of interest expenses. It turns out that €1,300,000 of the tax year’s net interest expenses can be deductible, and in addition, €200,000 of old non-deductible interest expenses can be deducted as well. Deductible net interest expenses for the tax year have been entered in the lines prior to this line. As a result, you should enter +200,000 euros, the impact resulting from the calculation here. In other words, in addition to the deductible interest expenses reported on prior lines, the entity can additionally deduct the €200,000 entered in this line.

Group support and write-offs of Accounts Receivable

Enter how much intra-group support your corporate entity has granted to a company where your entity alone, or together with other subsidiary companies (cf. § 6b.7, act on business tax) own at least 10%.

In addition, you must give details on any other expenses you have paid in order to improve the financial status of another company without a reciprocal payment. In addition, fill in any write-offs and depreciation of the receivables (however, do not do so for accounts receivable) from such a company.

None of these expenses entitle you to tax deductions (§ 16, subsection 1.7, act on business tax).

Losses of other financial assets and final reductions in value

Accounting column:

This line is for any losses of other financial assets, and any final reductions in value, as they are recorded in your accounting system. These include losses caused by embezzlement, theft or other crime.

Tax accounting: Deductible portion

The deductible portion of the losses of other financial assets and final reductions in value.

  • Losses of financial assets are deductible (§ 17.1, act on business tax).
  • Final reductions in the value of financial assets are also deductible under § 17.2 of the act on business tax; however, they are not deductible when the value of a receivable from another subsidiary company was reduced (see above, "Group support and write-offs of Accounts Receivable").

Capital losses for selling financial assets

Capital losses for selling financial assets as recorded in your accounting, such as losses incurred from the sale of a security or receivable included in financial assets.

Other financial expenses

This line is for other financial costs as shown by accounting. These include:

  • Loan management fees
  • Bank overdraft facility fees
  • Bank guarantee commissions
  • Credit insurance expenses
  • Mortgage expenses
  • Recovery expenses
  • Exchange rate losses
  • Factoring expenses
  • Expenses for futures contracts

Do not enter any of the financial expenses that you had entered above under “Financial expenses treated as interest paid (§ 18 a of the "EVL" act).

6 Tax-deductible repayment of a surplus by a cooperative society

This line is for any tax-deductible surplus refund of a co-operative under § 18 of the "EVL" act.

7 Group subsidy paid out

This line is for any intra-group contribution or subsidy that your entity has paid to other group companies. Complete Form 65 to specify them.

8 Increases of reserves

Accounting column:

Increases in the reserves based on tax rules, as shown by accounting. Fill out Form 62 to specify.

Tax accounting: Deductible portion

This line is for the part of your tax-based reserves that is deductible.

A corporate entity using Form 6B may deduct only the increases to a replacement reserve, referred to in §43, and a warranty reserve, referred to in §47 of the "EVL" act.

9 Capital losses from other assets, write-downs of other assets

Enclose Form 71B to itemise any losses (for selling “other” assets) that you have had.

Accounting column:

Enter the amount, as it is recorded in your books, of the losses for sales of other assets and property, and of written-down values of assets.

Tax accounting:

Enter the deductible part of the above amount of capital losses and written-down values. Generally, when a sale of other property, and a sale of shares in a real estate company or housing company results in a loss, you can get a tax deduction.

However, restrictions are in force that limit the deductiblity of losses from stocks and partnership shares included in other assets (not shares in real estate and housing companies). If you have sold shares, corporate stock, shares in general/limited partnerships (part of your “other” assets), and the result was a loss, the only way to deduct such a loss is to put it against any taxable capital gains for selling similar “other” assets. The tax deduction is available during the tax year and five years after that.  Do not enter the losses resulting from (non-real-estate, non-housing company) stocks and other shares here. Enclose Form 71B to itemise the losses.

For more information on the deductibility of capital losses, see section 3.4 of the “guidance on source-of-income rules for dividing the income taxes of certain corporate entities” – Eräiden yhteisöjen tulolähdejaon poistaminen (VH/1881/00.01.00/2019) (in Finnish and in Swedish).

10 Write-downs of receivables included in other assets

Accounting column:

Enter the amount, as it is recorded in your books, of any written-down receivables that are part of your “other” assets.

Tax accounting:

Enter the deductible part of the write-down of receivables included in other assets. In accordance with the provision of § 17.2 of the "EVL" act, if the taxpayer has had a receivable but it has been lost, the taxpayer is entitled to a tax deduction.

The tax-deductibility of decreased value of receivables is discussed in more detail in the Tax Administration’s guidance on the deductibility of decreases in the value of receivables in the taxation of business income.

11 Other deductible expenses/costs (not in the acc. period’s P/L account)

Any deductible expenses, for tax purposes, that are not included in the accounting period’s P/L account.

This line is e.g. for any dividends that are related to a work effort of the shareholder-beneficiary. Dividends from non-listed companies are subject to earned-income tax if the distribution basis is the work effort of the shareholder who gets the dividends or of a person in the sphere of interest (§33b.3, act on income tax). For more information, read the guidelines, Taxation of dividends based on work effort (in Finnish).

In addition, you must enter any training deduction claimed by your corporate entity. Enclose Form 79 (in Finnish) to specify.

12 Total tax-deductible business expenses/costs

Fill in the sum total of the Tax Accounting column: the tax-deductible expenses of your business operation.

8 Taxable profits or tax-deductible losses

This section is for reporting profits or allowable losses, for the business source of income, for the 2020 tax year.  

Do not enter any losses from previous years. The Tax Administration subtracts them automatically unless you have had changes relating to “13 Changes of the shareholding, information on past losses". You can check the allowed amount of losses from the tax decision.

If your corporate entity had income from agriculture, complete Form 7M to specify the agricultural revenue and expenditure.

Business profit

If the result is positive, enter it in this line.

Subtract tax-deductible business costs (Part 7, Section 10) from taxable business revenues (Part 6, Section 10) to arrive at Business profit.

Business loss

Enter the allowable loss in this line. For most corporate entities, this would be the difference, if negative, of: Taxable business income (section 6, line 10) – Tax-deductible business costs (section 7, line 10).

If, however, the expenses contain paid-out intra-group contributions (Amounts not taken into consideration), subtract the loss in this field accordingly because such expenses must not be included when calculating the allowable loss.

Items that are not taken into account in allowable loss

Payments of intra-group subsidy, and reserves on the balance sheet for residential property are amounts not taken into consideration (under §57, act on income taxation).

Calculation of net worth

All corporate entities must complete the Calculation of Net Worth because the information is needed for statistical and other purposes. However, if your corporate entity is a listed company, you can report the assets and liabilities at their balance-sheet values, because the net worth and the mathematical value that result from the calculation have no impact on how your dividends are taxed. The comparison values of listed companies’ shares depend on stock-market quotes, not on the book values on the balance sheet.

For purposes of this guidance, a “listed” entity means a company with all its stock, or a series of shares, being subject to stock-exchange trading in Finland (the basic listing or the 'Pre List' of NASDAQ OMX Helsinki Oy), elsewhere in the European Economic Area, or in a comparable market outside the European Economic Area.

If you are a credit institution, an insurance company or a provider of investment services (regardless of whether you are listed or non-listed), you do not have to fill in all the spaces of the Calculation of Net Worth. You only have to fill in the totals of assets and liabilities.

If your corporate entity does not conduct trade or business within the meaning of § 1.1 of the "EVL" act, you must specify its assets under “Other assets".

If your corporate entity is a nonprofit organisation, it may still have assets classified as "other non-current investments" (= assets and property as referred to in the Act on income tax (Tuloverolaki)).

9 Assets

Enter all assets at their undepreciated, residual acquisition cost unless this guidance instructs you to do otherwise. Values in this calculation may deviate from those on company balance sheet.

Fixed assets

The business assets intended for permanent use are fixed assets (§ 12, act on the taxation of business ("EVL")).

They are normally included in the non-current assets category.

Fixed assets subject to wear and tear include

  • buildings,
  • machinery,
  • equipment, etc., and
  • any patents and other intangible rights that are transferable.

Complete Form 62 to specify the depreciation, and the differences in booked/planned, relating to your fixed assets subject to wear.

Land, securities and similar fixed assets are regarded as not being subject to wear and tear.

Intangible assets

Enter the total value of intangible assets.

Intangible assets include

  • patents,
  • copyrights,
  • trademarks,
  • licenses in force,
  • concession and permit rights, and
  • licence fees for computer software.

Non-current investments, long-term

Enter the non-current investments that have retained their value and can be treated as assets. See the corresponding line 7, under F Capitalized Expenditure (§24 to §25, "EVL"), on Form 62, “Undepreciated acquisition cost at the end of the tax year”).

The expenses you have paid can be capitalized and treated as assets if they accumulate or retain income for three or more years. For example, the expenses you have capitalized as required by the "EVL" act are deemed long-term assets, i.e. they cannot be deducted as an annual expense. Under the provisions of § 24 of the "EVL" act, these expenses include the improvement costs of a leasehold, and the goodwill value you have paid for when you have bought a business unit. In addition, as it has been established by case-law, some research & development expenses can be capitalized.

Calculated tax receivables, expenses arising from the company's founding and organisation measures or long term expenses with no net asset value are not deemed to be assets.

If a difference resulting from a merger is positive on the books, this value must be included in the receiving company's net worth (under the court rulings KHO 1994-B-545 and KHO 1994-B-546).

Real estate, buildings and structures (Form 18)

Enter the total value of real estate, buildings and structures included in the company's fixed assets.

Complete Form 18 to specify.

The value should either be the undepreciated residual acquisition cost (= total undepreciated end-of-year balance of building acquisition cost and land acquisition cost, reported on line 7 on Form 62) or a comparison value (= taxation value), whichever is higher.

You must compare the above values for each real estate unit separately.

A real estate unit comprises a land area and the buildings located on it.

According to § 6 of the income tax act, real estate also refers to a building, structure or other facility located on another owner's land, which can be handed over to a third party without consulting the landowner so that the right of possession for the land is also transferred.

If the corporation's accounting period ends between 1 January and 30 September 2020, the taxation value for 2019 is used exceptionally as the comparison value, because the taxation value for 2020 has not yet been confirmed at that point.

If the corporation's accounting period ends between 1 October and 31 December 2020, the taxation value for 2020 must be used.

Other structures treated as being fixed assets are

  • Fuel tanks, acid tanks and other structures designed for storage, built of metal or similar materials
  • Lighter structures built from wood etc.
  • Structures utilised exclusively for research and development of the business.

The comparison value of forest land is its average annual yield × 10.

The comparison value of agricultural land is its average annual yield × 7. The Tax Administration issues an official decision every year confirming the relevant annual yields.

The comparison value of water and fallow lands is 0.

Machinery and equipment

Enter the total undepreciated (for tax purposes) acquisition cost.

Examples include:

  • Machines and various pieces of equipment
  • Trucks and vans
  • Passenger cars
  • Commercial vehicles
  • Furniture
  • The machinery and equipment you offer for rent

If you have any machinery and equipment in that you hold under a leasing contract, it is not regarded as being part of the fixed assets of your corporate entity. Do not enter its value here.

Cash advances paid

The cash advances that you have pre-paid, if it is part of your fixed assets.

Securities included in fixed assets (Form 8A must be completed)

Compare the undepreciated acquisition cost and the comparison values of securities (corporate stock, etc.) included in fixed assets, in financial assets and in other assets. If your corporate entity is a nonprofit organisation, it can still have some non-current investments (assets taxed under the act on income taxation).

Transfer the securities included in fixed assets here. Take the value from the column where the total value is higher.

The value of shares is 70% of the closing stock-market quote on the end date of your accounting period. See quotes (www.nasdaqomxnordic.com). This website contains the quote information for the end date of your accounting period.

The comparison values of shares in mutual funds and UCITS is 70% of the fair market value at the end of the calendar year.

The comparison value of an unlisted share is indicated in the corporate entity’s tax decision.

The taxation value for 2005 is used as the comparison value for housing-company shares acquired before 1 January 2006.

Apartment shares acquired on 1 January 2006 or later do not have a separate comparison value; nor do unlisted bonds, stock options or shares in a co-operative. For these securities, you must enter the undepreciated acquisition cost (for income-tax purposes) in the Comparison value column on Form 8A.

Receivables from companies within the same group

This line is for any receivables, from companies within the same group, included in the fixed assets.

“Group companies” refer to the parent company and subsidiaries, as defined in the Accounting Act (Chapter 1, §6).

Receivables from associated/affiliated companies

This line is for any receivables, included in fixed assets, that you have from companies that are associated or affiliated with you (within the meaning of Chapter 1, §7, Accounting Act).

Other non-current receivables

This line is for any other receivables included in fixed assets.

Other fixed assets

Other assets, included in fixed assets on your books.

Other fixed assets may include living species such as animals and plants, works of art and collectibles.

Total fixed assets, total non-current assets

Enter the total value of all the above fixed assets.

Current assets

Under § 10 of the act on business tax, current assets are merchandise, raw materials, semi-finished goods and other goods intended for handing over to a customer in the course of business, with or without further processing. Additionally, fuel and lubricants, and other comparable supplies, intended for consumption in the course of business are regarded as current assets.

Enter the acquisition cost as the value of your current assets, net of any deduction (write-off) reflecting a decrease in value (§ 28, subsection 1, act on business tax).

Raw materials and consumables

Examples include the materials you need for your production, various supplies, and consumables.

They may be directly connected to the manufacturing of the goods intended for sale; or connected to the maintenance of your machinery and equipment.

Work in progress

Work in progress means self-manufactured goods intended for sale, the manufacturing process of which is unfinished at the end of the accounting period (semi-finished goods).

A work in progress can be material or immaterial.

  • Examples of intangible WIP include the unfinished design work of an architectural business or a design company, or an unfinished movie that the company intends to sell when it is completed.

Finished products

This line is for goods that the company itself has manufactured to a state where they are ready for delivery to customers.

Finished products also include by-products and manufacturing waste.

Goods

This line is for the goods you have bought from an external supplier and intend to sell on as such.

If you are engaged in wholesale trade or retail trade, add packaging materials.

Real estate and buildings / current assets

This line is for any real estate and buildings included in your current assets.

Securities included in current assets

This line is for any securities you may have among your current assets.

Other current assets

Goods or items included in other current assets. They include cash advances paid if they are included in current assets.

Total current assets

Enter the total of the current assets above.

Financial assets

Financial assets include cash, receivables in the form of bank account balances, and cash equivalents, any notes receivable, and other comparable items (§ 9).

Additionally, the company's accounts receivable and cash reserves in the form of securities are also regarded as financial assets.

Enter the nominal value for receivables included in financial assets, and the acquisition cost of other financial assets. First, subtract any write-off or depreciation allowance from both values as specified in § 17 of the act on business tax.

If the receivables are not denominated in euros, you must convert them into euros following the same rules as how you convert foreign currency amounts for accounting purposes, i.e. by the exchange rate of the balance-sheet date (Chapter 5, § 3, Accounting Act).

Accounts receivable

Long-term and short-term receivables, instalment account receivables, and other comparable expected amounts to be received.

Receivables from companies within the same group

Receivables from companies within the same group; not, however, accounts receivable.

Companies within the same group are the parent company and subsidiary referred to in Chapter 1, § 6 of the Accounting Act.

Receivables from associated/affiliated companies

Enter the receivables from associated/affiliated companies (Chapter 1, §7, Accounting Act), excluding any accounts receivable.

Loans receivable

This line is for other than the loans discussed above. Enter such loans as long-term and short-term receivables from the staff and management in this line.

Note: do not enter any receivables from shareholders in this field; instead, they are entered as other non-current investments under "Shareholder borrowing", because they are included in the corporate entity's “TVL” source of income, i.e. are taxed under the provisions of the act on income taxation (TVL).

Other receivable

Other receivables may include tax receivables, security deposits, paid collateral and claims for compensation.

Deferred tax assets (Chapter 5, § 18, Accounting Act) are not included in the assets when calculating net worth. However, you must enter a receivable from the Tax Administration in this line if it is for current year’s taxes that you have booked on an accrual basis.

Securities included in financial assets (Form 8A)

This line is for any securities that are part of your financial assets.

Itemise the securities you have included in fixed assets, in financial assets, and in other assets on Form 8A. Then transfer the sum total (Financial assets, total) to this line of Form 6B from the column on Form 8A where the value is higher.  If your corporate entity is a nonprofit organisation, it can still own assets classified as non-current investment assets (taxable under the act on income tax).

Prepayments and accrued income

This line is for your pre-paid expenses and deferred income.

Percentage-of-completion values

This line is for any amounts that are receivable based on a percentage of completion.

Cash in hand

Enter how much cash, not deposited in bank accounts, your corporate entity has.

Cash deposited in banks

Cash in banks include bank account balances, bank deposits, investment assets and currency assets.

Other financial assets

Other than the assets included in financial assets itemised above.

Total financial assets

The total value of all financial assets above.

Other assets

These lines are for the holdings that are outside your business operation, because they must not be included in the above lines for fixed assets, current assets or investment assets.

Enter all assets as amounts equalling their undepreciated, residual acquisition cost unless this guidance has instructed you to do otherwise.

Securities (Form 8A)

Securities outside of your business.

Itemise the securities included in fixed assets, in financial assets, and in other assets taxable on Form 8A. Transfer the sum total (Other assets) to this field from the column on Form 8A where the value is higher.

If your corporate entity is a nonprofit organisation, it can still have assets and property classified as other non-current investments (taxable in accordance with the provisions of the act on income tax).

Real estate, buildings and structures

Enter any real estate that does not serve the business purposes of your company. For example, enter any real estate you have rented out to a tenant (an outsider tenant) that has no association with your corporate entity.

The value should either be the undepreciated residual acquisition cost (used for income-tax purposes) or a comparison value (= tax value), whichever is higher.

If your accounting period ends between 1 January 2020 and 30 September 2020, use the real property's 2019 tax value in the comparison.

Receivables from members of your consolidated group (intercompany receivables)

Enter any amounts you expect to receive from other subsidiaries or from the parent company.

Other receivable items

Enter any amounts that you expect to receive that are not itemised elsewhere. 

Shareholder loans (shareholder borrowing)

The total amount of loans granted to shareholders and their family members on the balance sheet date.

Provide a shareholder-specific itemisation in 2 List of shareholders or on Form 72.

Other relevant assets of this category

Other assets that do not serve the business purposes of your company, not itemised above.

Other assets, total

The total value of all of the "other" assets, as itemised above, in total.

Total assets

Enter the total of fixed assets, current assets, financial assets and the assets in the "other" category.

10 Liabilities

Bonds and debentures

The short-term and long-term bond loans, debenture loans and other debenture stock issued by your corporate entity.

Convertible debentures

The short-term and long-term convertible debentures that you have issued for subscription.

Loans from financial institutions

Enter the following balances:

  • Short-term and long-term loans from financial institutions
  • Loans from financing companies and your repayments of these loans
  • Factoring-account balances
  • Other short-term loans from financial institutions

Accounts payable

This line is for:

  • Short-term and long-term accounts payable

  • Any instalment-account balances

  • Any accounts payable to associated/affiliated companies and group companies

  • Accounts payable for investments and advance invoices

  • Other accounts payable

Amounts owed to companies within the same group

Short-term and long-term liabilities to companies within the same group but not, however, accounts payable.

Examples of what to enter in this line:

  • Advances you have received from group companies
  • Your debt to group companies in the form of bills of exchange
  • Other intra-group debt balances
  • Accruals and deferred income, where the counterpart is a group company

Companies within the same group are the parent company and subsidiaries referred to in Chapter 1, § 6 of the Accounting Act.

If your group of companies has applied a system of distributing dividends in advance, and your corporate entity distributes them in advance, you must not include any unpaid dividends in your debts. Instead, they must be subtracted from your net worth in the same way as any other dividends that you have decided to distribute but have not yet paid out.

Amounts owed to associated/affiliated companies

Enter the short-term and long-term debts your company owes to companies where it has a participating interest (under Chapter 1, Section 7, Accounting Act). However, do not enter any accounts-payable balances in this line.

This means that this line is for any received advances from associated or affiliated companies, and any bills of exchange, other debt, and accruals owed to them.

Amounts owed to shareholders

Short-term and long-term liabilities to shareholders and their family members.

Accrued expenses and deferred income

Items to be included:

  • Rental income that you have received in advance
  • Interest income
  • Accrued investment grants relating to future periods
  • Other deferred income
  • Any wage expenses booked for the accounting period on an accrual basis
  • The liability consisting of vacation pay, not yet paid out to your workers

Advances received, long-term

Long-term transfers or accruals of money, received by the corporate entity in advance.

Advances received, short-term

Short-term transfers or accruals of money, received in advance.

Other liabilities

Other liabilities may include

  • Long-term pension loans
  • Financial bills of exchange and liabilities to workers
  • Short-term financial bills of exchange
  • Tax withholding, which you have not yet paid on to the tax office
  • Social security contributions, which you have not yet paid on

The liabilities of an insurance institution, insurance company, pension institution, pension foundation and pension fund and such provisions made in order to improve the solvency of such an entity (Act on the Valuation of Assets for Tax Purposes, § 2, subsection 3).

The connection fees received by electricity, telecommunications and other such companies constitute liabilities, if they involve a refund obligation (Act on the Valuation of Assets for Tax Purposes).

For purposes of the Calculation of Net Worth, tax debt estimates within the meaning of Chapter 5, §18, Accounting Act, are not debt, so you must not enter them as debt. However, tax liabilities must be entered in this line if they are caused by taxes entered for the accounting period on an accrual basis.

Subordinated loans taken

The total of subordinated loans (Chapter 12, § 1, Companies Act) you have taken.

In taxation, a subordinated loan is usually considered to be a liability item (cf. § 2.3, Valuation Act), so it is entered as a liability in the calculation of net worth regardless of its booking method.

Liabilities total

This is the total of all the entries that represent debt.

Please note that the amount here is not necessarily the sum of Current liabilities total and Non-current liabilities total because they are from the company's accounting books but the total to be entered here is based on tax accounting.

Total current liabilities

The total amount of current liabilities based on accounting.

Total non-current liabilities

The total amount of non-current liabilities based on accounting.

Net worth – positive

Subtract the totals of 10 Liabilities from 9 Assets.

If the difference between assets and liabilities is positive, enter it here.

Net worth – negative

Subtract the totals of 10 Liabilities from 9 Assets.

If the difference between assets and liabilities is negative, enter it here.

Mathematical value of one share

  • You can calculate the mathematical value of one share for 2020 by dividing the positive net worth by the quantity of issued shares.

  • Any shares that are redeemed, or repurchased by your corporate entity are not included in the quantity when calculating the mathematical value (and comparison value) of the share.

  • The mathematical value of the share is used in the taxation of the dividends paid out to the shareholders in 2020.

Comparison value of share

The comparison value of the share for 2020 is also calculated based on the company's net worth. However, the total distributable dividends and advance dividends (but not dividends paid by a substituting entity) from the 2020 accounting period are subtracted from the net worth before the calculation.  In addition, you must account for any changes in circumstances that have taken place after the end of the accounting period, or during the next accounting period, such as changes in the quantity and the nominal value of the shares, or any mergers and de-mergers that have taken place.

11 Capital, equity and reserves

Report the capital, equity and reserves as book values, recorded in your accounting.

Restricted equity

Share capital / Coop capital

The corporate entity's registered share capital, the registered capital of a cooperative, or other comparable founding capital of the entity.

Other restricted equity

Under Accounting Act, some reserves of the balance sheet are restricted and cannot be used freely (for more information, see §8, subsection 1, Companies Act).

Old reserve funds and share-premium accounts are also restricted equity, referred to in Chapter 8, § 1 of the new Companies Act (§ 13, Act on the Implementation of the Limited Liability Companies Act).

Unrestricted equity

Fund for invested equity

This line is for a fund for invested unrestricted equity within the meaning of Chapter 8, § 2, Companies Act.

Other reserves

Any other reserves included in unrestricted equity.

Retained earnings

Enter the profits from previous years as recorded in your books here if the total sum of previous years' profits and losses is positive.

Retained losses

Enter the retained loss from previous years, as it is on your books, if the total sum of previous years' profits and losses is negative.

Profit for the year

Enter the book profit for the year that closes.

The lines below the ”Loss for the year” line are available to you for making an additional calculation of the taxable income and the items affecting it. The sum total must be the same as the profits of the year that closes, as recorded in your books.

Loss for the year

Enter the book loss.

You have the option to make an additional calculation of the losses that can be allowable for carryover to future tax years. The sum total must be the same as the losses on your books.

Filling in the following items is voluntary:

Taxable profit

The first line is for the sum total of your taxable profits from various sources of income.

To arrive at such a total, add together the positive results of your business source of income, agricultural source of income, and personal source of income.

Previous years’ losses are not subtracted from the profit.

Tax-deductible allowable loss

Enter the sum total of the losses to be allowed for carryover to next accounting periods.

Add together the negative results of your business source of income, agricultural source of income, and personal source of income.

Tax-exempt revenues

Add the non-taxable revenues, as recorded in your accounting for the accounting period, to the taxable profit, or to the loss to be allowed for carryover.

These revenues are the sum of the following items (see your Calculation of taxable income):

+ Capital gains for selling shares included in fixed assets, and from liquidation of assets, with their taxable portion subtracted
Receipts of dividends, with their taxable portion subtracted
+ Received profit-shares for consortia, with their taxable portion subtracted
+ Revaluation gains, with their taxable portion subtracted

+ Income from decreases of reserves, with their taxable portion subtracted
+ Refunds of taxes

+ Cinema support received
+ Other tax-exempt revenues of the P/L
+ Receipts of dividends, included in a personal source of income, with their taxable portion subtracted, as itemised on Form 7A.

Non-deductible expenses

Subtract the non-tax-deductible expenses.

Add together the following items on the Calculation of taxable income:
+ Depreciation expenses, net of the deductible part of them (however, do not include any unused depreciation from previous years)
+ Reductions in the value of fixed assets, net of the deductible part of them
+ Entertainment expenses, net of the deductible part of them
+ Donations granted, net of the deductible part of them
+ Capital losses for the selling of securities included in fixed assets and for liquidation of assets, net of the deductible part of them
+ Direct taxes
+ Punitive tax increases
+ Fines and other penalties
+ Merger loss
+ Reduction in the value of shares that are included in your fixed assets
+ Statutory reserves
+ Other non-deductible costs
+ Group support and write-offs of Accounts Receivable
+ Losses of other financial assets and final reductions in value, net of the deductible part of them
+ Increases in reserves, net of the deductible part of them

Other reconciliation between accounting book profit / taxable profit

Other reconciliation between your accounting and tax-accounting profit, for example:

– Other taxable revenues (not in the accounting period’s P/L account)
– Amounts not taken into consideration when calculating the allowable loss for the period
+ The depreciation expenses that you had not used during previous years, included in the “deductible portion” of depreciation in the Calculation of taxable income
+ Other deductible expenses (not in the accounting period’s P/L account), for example a donation deducted in taxation (§ 57 of the act on income tax) not booked as an expense.

The end result of this reconciliation must equal the profit or loss on the books.

Capital, Equity and Reserves

The sum total of the capital, equity and reserves items, or the total equity on the books.

12 Auditor’s report

Have the auditors given their report?

Always enclose the auditor's report with the income tax return if your company has the statutory obligation to have its financial statements audited.

  • Tick the "Yes" box if the auditors have already given their report (before you file the return).
  • Tick the "No, will give later" box if the auditors have not yet given their report but will at a later date.

If the audit is not completed by the deadline of the income tax return, you must deliver the auditor's report to the Tax Administration later, within one month of the date when the auditor gives their report.

If you file electronically, you can sign back in to add more information.

You must add Form 63 as a cover page if you deliver a paper version of the auditor’s report to the Tax Administration. Send the paper version and cover page to:

Finnish Tax Administration
OCR Service of corporate taxpayers’ returns - Yhteisölomakkeiden optinen lukupalvelu
P.O. Box 200
00052 VERO

Tick the "No because no auditor has been appointed under § 4, Auditing Act" box if you have a small business that exercises its option not to appoint an auditor (Auditing Act (1141/2015)).

A corporate entity can choose not to appoint an auditor if no more than one of the following conditions was fulfilled during both the closed and the immediately preceding accounting periods:

  • The balance-sheet total is over €100,000.
  • The net sales (=turnover) was over €200,000.
  • Average number of people on the payroll is more than 3.

However, an auditor must be appointed if your articles of association, memorandum of association, or corporate rules require it.

Further provisions on when an auditor must be appointed are found in Chapter 2, § 2, subsection 4 of the Auditing Act. These provisions contain some restrictions on sectors of business as well as on shareholders’ power and influence.

Are there any disapproving remarks in the auditor's report?

Tick the "No" box if the auditor's report does not contain any disapproving statements, remarks or additional notes referred to in the Auditing Act.

Tick the "Yes" box if the auditor's report does contain them.

13 Changes of shareholding, information on past losses

Complete this section in all situations where more than half of the shares of your corporate entity were transferred during a single tax year, or in stages over several years. This information affects your rights to deduct losses from previous years. This concerns other transfers than through inheritance or testament.

Losses of a corporate taxpayer are deductible against its taxable profits, attributable to the same source of income as the losses were, over the ten tax years following the year of the loss.

Effect of ownership changes

Your corporate entity loses its right to deduct previous years’ losses in circumstances listed below:

  • More than 50% of corporate stock has changed hands; either directly or indirectly.
  • The changes of ownership took place during a year when a loss was made, or after such a year.
  • The reason for the changes was a sale or exchange deal, etc., of shares; the reason was not an inheritance or last will.

However, you can ask for an exemption from the Tax Administration to deduct the losses regardless of the change in ownership (§ 122, act on income tax).

Read more: “How to file an application for advance ruling/exemption and the decision thereon” – Ennakkoratkaisu- ja poikkeuslupahakemuksen tekeminen ja siihen annettava päätös

Indirect ownership changes, or changes in the shareholder's type of ownership, are taken into consideration if the shareholder owns at least 20% of the company and a majority of the shares of the shareholder in question is transferred to another party. In such a case, all shares of the holding corporation or partnership are considered to have changed ownership.

Example: X Ltd owns the entire corporate stock of Z Ltd. When more than half of X Ltd’s shares go to a new owner, all shares of Z Ltd are considered to have changed ownership.

However, if your corporate entity is a listed company, any changes of its publicly traded shares do not prevent the deduction of losses and unused tax credits.

Deduction of losses if shares transferred to new owner

Enter the tax year when the transfer took place, if more than half of the shares have changed hands in one transaction during the past ten tax years. If a tax year has already been reported to the Tax Administration, it need not be reported again.

In the same way, enter the year even if this has occurred progressively: the change in ownership may have happened during a period spanning several years, or there may have been indirect changes of ownership during the past ten tax years. In this case, indicate the tax year before which or during which any losses made by the company would not be deductible because the current owner is different. In addition, you must enclose a free-text explanation of the changes and the times when they happened.

Example: One individual shareholder owns all the 100 shares of a company. She sells 50 shares to someone in 2018, and one share to someone in 2019. Taking account of these changes in ownership in 2018 and 2019, it is established that more than half of the corporate stock has changed hands. We also take account of the fact that the company made losses every year from 2015 to 2019.

The company enters 2018 as the tax year of its ownership changes and submits an explanation of the changes in a separate enclosure.

The company may not deduct the losses from 2014−2018 from its profits in tax year 2020. During the loss year 2019, only one share was transferred, so the company, having made a profit in 2020, may deduct the loss made in 2019 for purposes of its 2020 taxation.

Note: there may be a change in ownership although the shareholders remain the same. The proportions of ownership may vary when a corporate entity issues a set of new shares, but only some of the old shareholders sign up to purchase them.