6U Income tax return – Foreign corporate entity, Instructions for filling out the form 2019

Tax year 2019

• Fill in all the lines of the return form and enclosures for which you have information to report.
• 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 2019 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.
• See list of enclosures

Further/additional 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.

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

MyTax: 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.

Åland-domiciled corporate entities must pay municipal tax on all their income to the tax authority of Åland Islands under the provisions governing municipal income tax (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. However, the double taxation is eliminated either by the Tax Administration or the Provincial Government, depending on your registered domicile.

2 Permanent establishment for purposes of income tax

Tick the box for one, not both, of the following options:

• The company believes that a PE (permanent establishment) for income tax purposes is formed, or the company owns immovable property in Finland.
• The company believes that it should not be treated as having a PE for income tax purposes. Complete Form 80.

Permanent establishment is formed for income tax purposes or company owns immovable property in Finland

Tick the box if a PE is formed for income tax purposes in Finland, the company owns immovable (or real estate) property in Finland, or the company receives a share of the income of a corporation in Finland.

• As a rule, foreign companies must pay tax to Finland only for the income they earn in Finland. However, if a foreign company has a permanent establishment in Finland, it is liable to pay tax on all the income attributable to the permanent establishment. Permanent establishment means a fixed place of business through which the company conducts some or all of its operations. Such a fixed place may be a place of corporate management, an office, a 'dependent agent', or it may be a construction project or an installation project that lasts longer than a threshold time limit, defined in the applicable tax treaty.
• For example, if a foreign company owns real estate property in Finland and this property also represents a source of income for the company, it must pay tax on the income received (under the provisions of §10 the Finnish act on income tax (TVL)).
• When completing the tax return, the share of income received by a foreign corporate entity from a Finnish corporation in which it is a general partner must be reported. For example, if a Finnish limited partnership operates a business in Finland and a nonresident foreign national is a shareholder-partner, the share of profits that goes to this foreign partner is treated as income from business.
• Further information on permanent establishments in income taxation
• More on permanent establishments for income tax purposes, (Income taxation of foreign corporate entities in Finland).

The company believes that it should not be treated as having a PE for purposes of income taxes

Tick the box as appropriate and complete Form 80 (Account of local operations – Foreign corporate entity).

3 Further details

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 7a, 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, complete Form 78 (Explanation of transfer prices)

The documentation is required if transactions have been made between group companies in an associated relationship (as provided in §14, act on assessment procedure (VML)), if the other party to the transaction is a foreign enterprise, or if a permanent establishment located in Finland is one of the parties, and its foreign parent is the other.

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 is an entity not regarded as a small or medium-size enterprise under the definition of the Commission Recommendation 2003/361/EC.
• When considering whether to prepare transfer pricing documentation it should be borne in mind that most group companies of a MNE, even if they are small or medium-sized companies that operate in Finland, must prepare the 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” – Siirtohinnoittelun dokumentointi (in Finnish).

Has a branch office or a PE been incorporated as provided in §52d of act on business tax?

Tick this box if you have relinquished the assets and liabilities connected with a business unit (=transferred a business). The recipient should in that case be a limited company that will continue operating the business, and the payment to your entity must be made in the form of stock in the receiving company.

Or has the company transferred the business unit formed by a branch/PE as provided in §52d?

Read more about business transfer in “Mergers and acquisitions – Business transfer” (in Finnish)

Calculation of taxable income (EVL, act on business tax)

Enter your taxable revenue and tax-deductible expenditure 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 "4 Business income" section are adjusted by deducting the expenditure in "5 Business expenses".

Note: Calculation of taxable income is only for your business revenues and expenses, not those that relate to other sources of income.

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

Complete Form 7A to report profit and capital gains attributable to a personal source of income.

Examples of activities attributable to a personal source of income:

• Renting out non-business real estate. The business source of income can only include real estate if the property or building is exclusively used, or almost exclusively used, for purposes that either directly or indirectly benefit business activities (§53, Business Tax Act).
• Operating a forestry activity without a connection to the business.
• Owning securities and corporate stock in a passive manner.
• Renting out non-business residential apartments, when this activity is not the corporate entity's business.
• Lending money to shareholders. If the company has collected interest on the loans it has granted to shareholders, or if the Tax Administration has added an amount to the taxable corporate income because no or too little interest was collected (under §29, act on assessment procedure), the interest income is treated as part of the personal source of 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 (6 Taxable profits/Tax-deductible losses).

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

Form 77 is also for reporting the profit or loss from any agricultural source of income and personal source of income, as well as the amounts not taken into consideration when calculating the allowable losses for purposes of taxation.

Form 77 with instructions (in Finnish)

Digits, values, 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 reduce them. For this reason, plus and minus signs 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: A corporate taxpayer reports a net sales figure that is negative. Enter a minus sign before the amount reported in 1 “Net sales” (under 4 Business income).

4 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 the company’s net sales include dividends, report them under “Receipts of dividends and profit surplus” in section 3 (Financial income). Correspondingly, deduct the amount of dividends from the net sales before entering the net sales here.

Sales on goods and services, external

Sales of goods and services relating to the PE's operations to outside customers i.e. not to group companies or undertakings, not to parties in an associated relationship.

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).

Sales of goods and services to the parent/principal

Sales of goods and services relating to the PE's operations to group.

This way, “group” may refer to the principal company, the group’s other PEs in other countries, or branch offices.

Sales of goods and services to intra-group companies

Sales of goods and services relating to the PE's operations to other group companies.

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

2 Other operating income

Capital gains for selling shares included in fixed 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:

• Form 71A is for reporting tax-exempt capital gains from selling and liquidations of assets, and for reporting non-deductible losses.
• Form 71B is for reporting tax-exempt capital gains from selling and liquidations of assets, and deductible losses. Similarly, Form 71B is also for capital and liquidation gains and corresponding losses from shares in partnerships or consortia.

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, act on business tax).

From this follows that gains from the selling of shares in housing companies and real-estate companies, the selling of shares held for a shorter time than one year are taxable, and the selling of shares in companies where the ownership interest had been less than 10% are taxable. If your corporate entity is a capital investment firm, its receipts of capital gains are always treated as taxable income.

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 is taxable income if shares were sold that are basically tax-exempt, but a gain (the difference between selling price and undepreciated acquisition cost) is created for one of the following reasons:

• Write-offs of shares, previously approved in taxation (§42, Business Tax Act)
• 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 on the selling of shares included in fixed assets (in Finnish) (Tax Administration guidance “Taxes on the gains derived from selling securities booked as fixed assets in the balance sheet”).

Other revenues from sideline business

This line is for other taxable business revenues (other than the above) 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

3 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. Include any refunds of profit surplus received from a cooperative society that can treat them as a deductible cost (under §18.4, Business Tax Act).

The following are distributions of profit under §6d.7:

• 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 don't 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)

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 a non-listed company receiving dividends from 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, Business Tax Act) are taxable income if the cooperative can treat such refund as a deductible cost.

Similarly, report any REIT company dividends, 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.

Shares of profits for consortia

Accounting column:

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

Shares 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 profit share is determined after you file the tax return.

Other financial revenues and interest income

This line is for interest income, any other financial income treated as interest income (§18a.2, act on business tax) and currency-exchange gains and other miscellaneous revenue items.

4 Revaluation gains

Accounting column:

• Revaluation gains from financial assets as they are in your accounting system (§5 a, subsection 1 of Business Tax Act).
• Revaluation gains from current assets (§5a, subsection 5, Business Tax Act).
• Revaluation gains from fixed assets (§5a, subsection 5, Business Tax Act).

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, Business Tax Act) had not been approved as a tax-deductible expense.

5 Group subsidy received

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

6 Income from decreases of reserves

Accounting column:

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

Tax accounting:

Taxable portion of the decreases. Examples of such income are:

• An unused replacement reserve (§ 43, act on business tax)
• 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, act on business tax).

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

7 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 corporate entity, 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 such a 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.

8 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 in the guideline, Property development business in taxation (in Finnish).

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

9 Taxable business income, total

Enter the total sum of items 1 to 8 in the Tax accounting column, representing the total taxable business income.

10 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.

11 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: gains from a merger (§52b, Business Tax Act) and public support for cinematic arts (see §6.1.5, act on business tax).

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, Business Tax Act).

This line is additionally for any capital gains from the sale of moveable assets subject to wear and tear, covered by indirect income recognition (§ 30 of Business Tax Act).

5 Business costs

1 Raw materials and services

Purchases, variation in stocks and inventory

Enter the following balances:

• 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).

Services ‒ from parent/principal and associated companies

Enter the total amount of services you bought from the parent company and other group companies.

Services ‒ from external providers

Enter the total amount of services you bought from others, not the parent company and other group companies. Enter the aggregate amounts.

2 Staff expenses

Wages and salaries, work done in Finland

Total of wages and fees as recorded in your payroll accounting books.

Pension expenses, work done in Finland

Total of pension expenses as recorded in your payroll accounting books.

Other payroll expenses, work done in Finland

Total of additional payroll expenses as recorded in your payroll accounting.

Staff expenses related to a PE in Finland and work done in other countries

Total of wages and indirect employee costs, as recorded in your payroll accounting books, paid for work done in Finland and attributable to a PE in Finland.

3 Depreciation and reductions in the 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 Business Tax Act, including additional amounts and specific tax-relief depreciation expenses from Form 62 to this field.

• Depreciation permitted by the Business Tax 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 Business Tax Act 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.

• Fill in the details on your depreciation that was not allowed 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, Business Tax 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 areas when the fair value of the asset at the end of the tax year is significantly lower than the undepreciated purchase cost.

4 Other business expenses

Entertainment expenses

Accounting column:

All entertainment expenses recorded in your accounting. Information on entertainment expenses and the concept of entertainment expenses (in Finnish) (in the guideline, Entertainment expenses in income taxation).

Tax accounting: Deductible portion

• = 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, Business Tax Act).

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.
• Similarly, Form 71B is also for capital and liquidation gains and corresponding losses from shares in partnerships or consortia.

Tax accounting: Deductible portion

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

• This type of deduction from gains is already made at the stage when calculations are drawn up to arrive at the taxable value of the capital gain, which is reported in section 4 (Business income), line 2 ”Other operating income”. For this reason, the capital loss must not be entered here even in those cases.

More information on the deductibility of capital losses (in Finnish) (in the “Taxation of the sales of a corporation's shares” guidance).

Write-offs within Accounts Receivable

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

PE-related management costs of the parent/principal

Part of the management costs paid by the parent/principal but attributable to the permanent establishment in Finland. Examples of such costs include:

• Expenses for staff on-the-job training, recreation expenses
• IT expenses and other telecommunications expenses
• Marketing expenses

Other deductible operating expenses

Enter any deductible business costs, directly relating to the permanent establishment in Finland, and not entered in the lines of the Tax Accounting column as other operating costs. 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 lines 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 line 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 line 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. They are not tax-deductible.

Fines and other penalties

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

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

This line 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. Statutory reserves are not deductible.

“Statutory reserves” means 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, or the day when they arise is not known.

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 building, bridge, aeroplane or other such large machinery unit (§ 47, Business Tax Act). If you have a reserve treated as deductible because it is a warranty-repair provision, enter it in the Tax Accounting column under 7 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, Business Tax Act).
• I they are to be refunded to the corporate entity later if the utility contract is terminated, payments you have made for creating a connection with a utility grid such as electric power, telecommunications, water, sewage, heating, are non-deductible expenses (§16.3, Business Tax Act).
• 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, Business Tax Act).

5 Financial expenses

Interest paid to the main operation (=to the parent or principal)

Accounting column:

Enter the amount that the PE or branch has entered in the books as payments of interest to the parent company or the principal.

Tax accounting:

Enter the deductible part of the paid interest.

Interest paid to group undertakings/companies (§ 18 a, act on business tax)

This line 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 Business Tax 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).

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, Business tax 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 line 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 (§ 18 a, act on business tax)

Interest expenses under § 18 a, subsection 2, paragraph 2 of the act on business tax.

Adjusted portion of interest paid (§ 18a, act on business tax)
or “Adjustment of interest expenses (§ 18 a, act on business tax)” in MyTax

Enter the euro value of how much the deductibility restriction set out in §18a, act on business tax, 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 the act on business tax (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, act on business tax, you must enter a minus sign and the part you cannot deduct in this line.

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).

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.

These items are not tax-deductible (§ 16, item 7, Business Tax Act).

Losses of other financial assets and final reductions in value

Accounting column:

This line is for any loss of other financial assets, and for any final reductions in value, as they are on your books. 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

6 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.

7 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.

8 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 field is for any dividends that are related to a work effort of the beneficiary, etc. 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 the work effort of a person in the sphere of interest (§ 33 b.3, act on income tax). Dividends and profit surplus based on work effort (wages), detailed guidance in Finnish.

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

9 Total tax-deductible business expenses/costs

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

6 Taxable profits or tax-deductible losses

This section is for reporting profits or allowable losses, by source of income, for the 2019 tax year.

Do not enter any losses from previous years. The Tax Administration subtracts them automatically unless you have had changes relating to “11 Changes of the shareholding, information on past losses". You can check the allowed amount of losses from the tax decision.

If your corporate entity has had income from a personal source, complete Form 7A to specify the income and the related expenses.

If your corporate entity has had income from an agricultural source, complete Form 7M.

Business profit

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

Subtract Tax-deductible business costs (section 5 of the form, line 9) from Taxable business income (section 4, line 8).

Business loss

Enter the allowable loss in this line. This is normally the negative difference that results from subtracting Tax-deductible business costs (section 5, line 9) from Taxable business income (section 4, line 8).

However, if your expenses include donations or group subsidy payments that you have made (Amounts not taken into consideration), you must reduce the loss in this field by their amount.

Items that are not taken into account in allowable loss

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

The deduction based on the giving of a donation is not taken into consideration (§57, act on income tax), because it is based on special tax rules. However, it is taken into consideration in case the calculation concerns a personal source of income for which a loss is made.

Taxes at source withheld in Finland on company income

Enter the amount of taxes at source withheld in Finland on the corporate entity’s income.

If your corporate entity is not on the prepayment register, the payor can withheld tax-at-source from any amounts due to you.

If tax has been withheld although the foreign company is not treated as having a permanent establishment in Finland, the company is entitled to request a refund.

For more information, see Refunds of tax at source.

This line is not for any prepayments paid in by you.

7 Key figures for the parent/principal or Accounting period details on the main operation

Turnover of the parent/principal (entire operations)

Enter the worldwide sales/turnover of the corporate entity, as recorded in accounting.

Total expenses

Enter the worldwide expenses the corporate entity, as recorded in accounting.

Profit or loss for the accounting period, main operation

Enter the worldwide profit or loss of the corporate entity, as recorded in accounting.

Number of staff

Enter the number of employees of the corporate entity that is your main operation, your parent or your principal.

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 will 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' corporate 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 you are a corporate entity that does not operate a trade or business, fill in “Other long-term investments (Income Tax Act), total” at the bottom part of the column to specify your assets, and fill in "9 – Liabilities" to specify your liabilities.

8 Assets

Enter all assets as amounts equalling their undepreciated, residual acquisition cost unless the 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 business taxes (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, act on business tax), 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 act on business tax, are deemed long-term assets, i.e. they cannot be deducted as an annual expense. Under the provisions of § 24, act on business tax, 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 2019, the taxation value for 2018 is used exceptionally as the comparison value, because the taxation value for 2019 has not yet been confirmed at that point.

If the corporation's accounting period ends between 1 October and 31 December 2019, the taxation value for 2019 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 included in fixed assets, financial assets and other 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 (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 the 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).

Real estate and buildings / current assets

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

Other current assets

Goods or items included in other current assets. Examples:

• Materials and supplies
• Work-in-progress
• Finished products
• Goods, merchandise
• Securities treated as current assets
• Advances paid for 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 similar assets.

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.

Securities included in financial assets (Form 8A)

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

Itemise the securities included in fixed assets, in financial assets, and in other long-term investments (assets taxable under the provisions of the act on income taxation) on Form 8A. Transfer the sum (Total financial assets) on this line from the column where the amount is higher at the bottom of Form 8A.

Other financial assets and other receivables

Other than the assets included in financial assets itemised above. Examples:

• prepayments and accrued income
• cash deposited in banks
• Cash
• Other receivables (e.g. insurance indemnities).

Total financial assets

The total value of all financial assets above.

Other long-term investments (Income Tax Act)

Assets that are outside your business, and taxed under the act on income tax (TVL, must not be included in the above lines for fixed assets, current assets or investment assets. Instead, enter them in the lines below.

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 long-term investments (assets taxable under the provisions of the act on income taxation) on Form 8A. Transfer the interim amount (Other long-term investments) to this line from the column at the bottom of Form 8A the total amount of which is higher.

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 third-party tenant.

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 2019 and 30 September 2019, use the real property's 2018 tax value in the comparison.

Other assets taxed under the act on income tax

Other assets not directly serving a business purpose.

Other long-term investments (Income Tax Act), total

The total value of all of the assets taxable under the act on income tax, i.e. your other long-term investments in total.

Total assets

Enter the total of fixed assets, current assets and financial assets and other long-term investments.

9 Liabilities

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 credit accounts
• Other short-term loans from financial institutions

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.

Read more about distributing dividends in advance in “Taxation of dividends” – Osinkotulojen verotus (in Finnish).

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 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

Other liabilities

Other liabilities may include

• Long-term pension loans
• Advances received
• 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
• Debt consisting of employer’s health insurance contributions
• Accounts payable
• Convertible bonds you have issued
• Debentures you have issued

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, the tax liabilities must be reported here if it is 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. However, the amounts for "Current liabilities total" and "Non-current liabilities total" come from the accounts i.e. are book values.

Total current liabilities

Enter the book balance of your short-term debt.

Total non-current liabilities

Enter the book balance of your long-term debt.

10 Auditor’s report

Have the auditors given their report?

Always enclose the auditor's report with the income tax return if your corporate entity has the statutory obligation to have the financial statements of its Finnish-located PE audited. Statutory audit in Finland of a Finnish PE must be arranged, if the foreign company's annual accounts are not being compiled, audited and made public in the manner corresponding to the current EU rules on the adoption of financial statements or in another generally accepted manner (§ 1:1, Auditing Act).

• 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 date 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 has given their report.

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

If you opt for paper filing, you must staple Form 63 to the Auditor's report. Send the paper version and cover page to:

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

Nevertheless, it is mandatory for the company/entity to appoint an auditor if its articles of association, the corporate rules, etc. contain provisions to that effect.

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.

11 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.

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.

Similarly, 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.

If you file the tax return on paper, remember to authorize the completed form with your signature and the date.