Income tax returns for foreign corporations
A foreign corporation operating in Finland may be obliged to file income tax returns to the Finnish Tax Administration. Foreign corporations operating in the construction or installation sectors must file a tax return every year. Foreign corporations must also file a tax return if the Tax Administration requests it.
These instructions are for foreign organisations that are non-resident taxpayers in Finland. A foreign organisation whose place of effective management is located in Finland is considered a resident taxpayer in Finland. Read more about the place of effective management and a tax resident foreign organisation’s tax return.
When must a foreign corporation file a tax return?
A foreign corporation must file a tax return detailing its taxable income and deductible expenses, if at least one of the following conditions applies:
The foreign company has:
- permanent establishment in Finland
- real property (either a real estate unit or shares in housing companies) located in Finland
- a share in consortium income in Finland
- tax domicile in a country that has no bilateral tax treaty with Finland.
File your tax return electronically
Foreign corporations must file the tax return form 6U electronically. This can be done in several ways:
- Submit tax return data in the MyTax service.
- Submit the file produced by your accounting software by using the Ilmoitin.fi portal.
The entire tax return, together with all the necessary attachments, must be submitted electronically. Submit all accompanying forms (such as Form 62) and additional attachment files (such as your profit and loss account and balance sheet) with your tax return online. If you wish to add an attachment to your tax return after filing it, but there is no need to make changes to the tax return itself, only submit the new attachment.
You need a UID and a Suomi.fi authorisation for e-filing
Foreign corporations need a UID and a Suomi.fi authorisation in order to use the Tax Administration’s e-services. When you have the UID and the authorisation, you can log in to the e-services with the Finnish Authenticator app.
When must a tax return be filed?
The filing deadline for a tax return is four months after the end of the calendar month in which your accounting period ends. The accounting period of the permanent establishment of a foreign corporation is determined by the accounting period of the parent company.
Example: The accounting period of a limited company ends 15 March 2023. The company must file their tax return by 31 July 2023. If the final deadline is a Saturday or holiday, the filing deadline is extended to the next working day.
If you file on paper, the tax return must arrive at the Tax Administration by 4.15 pm on the date of the deadline. We recommend that you send it off early enough to make sure there is enough time for postal delivery. You can file on paper only if there is a special reason (for example, if electronic filing is impossible due to technical difficulties).
Information to be submitted on Form 6U
Foreign corporations use the tax return form 6U to report the revenues, expenses, assets and liabilities of its permanent establishment. If the tax authorities have collected any tax at source on the income of the foreign corporation, the tax return must include an account detailing the amounts paid in. The Tax Administration will consider these details when calculating the final income tax.
The section Calculation of taxable income is for reporting the revenue and expense figures of the permanent establishment.
To arrive at taxable income, subtract your business costs (section 5) from your business income (section 4). State your taxable profits or tax-deductible losses under section 6.
The section Calculation of net worth is for reporting the assets, liabilities and equity of the permanent establishment.
Even if a foreign corporation does not have a permanent establishment in Finland, it must usually pay tax on the income it receives from real estate and housing-company apartments located in Finland.
Photocopies of the permanent establishment's profit-and-loss account and balance must be enclosed with the tax return. The profit-and-loss account and balance must be drawn up as required by the Finnish Accounting Act.
If there is no permanent establishment in Finland
Foreign corporations are not required to pay Finnish income tax if they do not have a permanent establishment in Finland. If you believe your activities in Finland do not give rise to a permanent establishment for income tax purposes, you must state this under section 2 of Form 6U and enclose with it a completed Form 80 (Account of local operations - Foreign corporate entity). The tax return and the accompanying Form 80 must be filed within four months from the end of the month in which the corporation's accounting period ends.
You are not required to file a tax return and Form 80 if you have received a binding advance ruling from the Tax Administration stating that you are not considered to have a permanent establishment in Finland. However, if there have been changes in the corporation’s operations or if the Tax Administration has requested you to provide more information, you must file a tax return with Form 80.
Companies in the construction, installation and assembly sectors must provide a report every year
All foreign corporations operating in the construction, installation and assembly sectors must file a tax return with Form 6U and report on their operations and contracts in Finland with Form 80 every year. The tax return and Form 80 are mandatory even if the corporation's operations in Finland did not give rise to a permanent establishment during the previous reporting year.
Assessment notice provides the amount of tax refund or residual tax
Using the tax-return information submitted by the taxpayer, the Tax Administration performs the calculations necessary for ascertaining the final amount of income tax for the year.
The Finnish Tax Administration processes the foreign corporation’s tax return information, completes the assessment and prepares a decision letter after that. Every taxpayer entity has its own end date for tax assessment. This date is printed on the decision letter. However, for foreign corporations, the assessment will end no later than 10 months after the end of the last calendar month of the accounting period. If more than one accounting period has ended during the calendar year, the end date of assessment is no later than 10 months after the end of the month when the most recent accounting period ended.
After completing of the assessment process, the Tax Administration sends the decision letter to the foreign corporation.
Example: The accounting period of a corporation is 1 January 2022 to 31 December 2022. The assessment process will end on 31 October 2023 at the latest.
Example: The accounting period of a corporation is 1 April 2022 to 31 March 2023. The assessment process will end on 31 January 2024 at the latest.
The end date indicated on the decision letter may change. The following circumstances may cause such a change:
- The foreign corporation sends the Tax Administration some additional or corrected details for taxation before the end date of the assessment process.
- The Tax Administration extends the process of assessment because tax audits or other control measures are still unfinished. In this case, the Tax Administration will send the foreign corporation a notice stating that the assessment process is still ongoing. The notice is sent off before the end date.
If the basic details affecting the corporation’s assessment change before the end date of the assessment process, the Tax Administration will send the foreign corporation a new decision letter. If a foreign corporation has provided some additional or corrected details for taxation, or if the Tax Administration has sent the taxpayer a notice indicating that the assessment process is still ongoing, the Tax Administration will send the corporation a revised decision even if the final result of the assessment does not change.
There will be an end date of assessment printed on the letter; this date may be the same as the date set out previously or a later date. However, the date when assessment ends is the date on the most recent letter.
The final result of the assessment is also indicated by the most recent decision letter.
The decision shows whether the corporation will receive a refund or whether it must pay residual tax. The corporation may have to pay residual tax if it has not paid enough tax in advance and it has not made to cover for the missing prepayments. Corporations must also pay late-payment interest with relief on residual tax.
What are the consequences for failing to file a tax return?
If a company files its tax return late, it will have to pay either a late-filing penalty or a punitive tax increase.
A late-filing penalty is imposed if the tax return is filed after the filing deadline but before the company’s tax assessment has been completed. A late-filing penalty is also imposed if additions or corrections are made to the tax return on the company’s initiative after the filing deadline but before the completion of its tax assessment. However, late-filing penalties are usually only imposed if the changes made to the tax return increase the amount of taxable income. The amount of late-filing penalty is €100. Read more about the late-filing penalty and the punitive tax increase in the income taxation of corporate entities and benefits under joint administration.
If no tax return has been filed before the company’s tax assessment is completed, a punitive tax increase is imposed. A punitive tax increase is also imposed if there is something wrong or missing in the company’s tax return or in the other required information and the company does not correct them on its own initiative before the completion of tax assessment. The amount of the punitive tax increase depends on how significant the mistakes or omissions are. However, the punitive tax increase is always at least €150.
If a company does not file a tax return at all, the consequences usually include a punitive tax increase as well as removal from the prepayment register. In addition, the company’s taxes may be assessed by estimation. This means that the Tax Administration estimates the company’s taxable income. The Tax Administration is always required to hear the company before a punitive tax increase is imposed, the company is removed from the prepayment register, or the company’s taxes are assessed by estimation.
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