Top-up tax

On what basis is top-up tax paid?

A constituent entity is obliged to pay top-up tax in Finland if

• the group’s effective tax rate in Finland is less than 15% during the accounting period, i.e. less than the minimum tax rate, or if
• top-up tax payable for the accounting period is allocated to the entity because of a low effective tax rate in another jurisdiction.

The amount of top-up tax to be paid is calculated by jurisdiction and allocated to constituent entities for payment.

Tax decision

The Tax Administration performs tax assessment based on the top-up tax return and information received from elsewhere. After the tax assessment, the constituent entity receives a tax decision, which shows the result of the tax assessment and the amount of top-up tax to be paid.

The Tax Administration can also carry out taxation by estimation, which is governed by the act on the assessment procedure.

For what period is tax assessment carried out?

The Tax Administration carries out tax assessment for a period corresponding to the accounting period of the group’s ultimate parent entity. 

When does tax assessment end?

Tax assessment ends on the date indicated in the tax decision. The tax assessment is completed no later than two years after the end of the accounting period.