Foreign business in Finland

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

Notices to be filed on starting up and on changes

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

Forms are available at (

Paying Finnish income taxes

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

VAT liability

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

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

Employer obligations

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

The routines of payroll reporting have changed as of 1 Jan 2019:

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