Instructions for filing

These instructions describe what information a self-employed individual must include in their tax return. The self-employed are also often referred to as private traders, business operators or entrepreneurs with a business name. 

File your tax return in MyTax.

File a business tax return on paper using Form 5

Business tax return in MyTax

  1. Go to Tax returns and tax information.

  2. First, select the year 2020 and then Business tax return – business operator or self-employed person.

  3. Background information

    In the first stage, you will see your background information.

    • Taxpayer details 
    • Division of business income between spouses
    • Double-entry bookkeeping and specification of equity
    • Calculation of interest expenses that are not deductible as business expenses
    • Cash withdrawals and cash investments
  4. Revenues 

    You can report revenues by clicking Yes in the right section.

    • Net sales
    • Increased living expenses due to temporary business trips
    • Private use entered as income
    • Subsidies and financial support
    • Dividends for stocks that belong to the business operations
    • Surplus from shares that belong to the business operations
    • Interest income or financial income
    • Reserves 
    • Other taxable income
    • Tax-exempt income
  5. Expenses

    If you have no expenses relating to business to report or you are not making depreciation, you can state so in this stage. If you have something to report, you can report expenses by clicking Yes in the right section.

    • Vehicles that belong to the business (report in the Revenues stage in MyTax)
    • Use of a private car (report in the Revenues stage in MyTax)
    • Purchases and changes in inventory
    • External services
    • Wage and staff expenses
    • Depreciation
    • Unused depreciation
    • Entertainment expenses
    • Rental expenses
    • Interest expenses
    • Financial expenses
    • Other deductible expenses
    • Increases in reserves
    • Additional deductions based on car and travel expenses
    • Other deductible expenses not recorded in the accounts
    • Training deduction
    • Non-deductible expenses
    • Other non-deductible expenses
  6. Calculation of net worth

    • Assets
    • Fixed assets
    • Goods and other current assets
    • Securities
    • Financial assets
    • Business liabilities
    • Other details and claims
    • International operations
  7. Preview and send

    Recheck the details. Click Edit to make changes. 

    If you wish to continue filling in the details later, select Save as unfinished. The Tax Administration will not process the tax return before you have submitted it. If everything is correct, click Submit.

    Returns you file are also saved in MyTax.

Background information

Taxpayer details are displayed according to the information received from the Business Information System (ytj.fi).

Change your accounting period and line of business on ytj.fi.

If more than one accounting period has ended during the tax year, report the information on all the accounting periods on one return.

In tax assessment, the income from your business is divided between you and your spouse if your spouse works for the business operation, even if your spouse does not work full time for the company.

Business income is divided into earned income and capital income.

The capital income portion is divided between you and your spouse according to how much of the company’s net assets either one of you owns. The earned income portion is divided according to how much work you have done for the company. Enter the portions for each spouse as percentages in the business tax return.

How to file on paper forms

Fill in these details in section 4 of the form. 

If you use double-entry bookkeeping, report the following information:

  • Equity at the start of the year
  • Private withdrawals and private investments during the accounting period. Enter the difference between the withdrawals and the investments.
  • Gain or loss for accounting period as recorded in the accounts
  • Equity at the end of the year

Also report the cash withdrawals and cash investments made during the calendar year:

how much money you have withdrawn from the company’s account for your own use during the calendar year. how much money you have deposited into the company’s bank account in total. Enter the difference between these figures under “Specification of equity” in the “Private withdrawals and private investments” field.

How to file in MyTax

If you answer Yes to the question Do you use double-entry bookkeeping?, MyTax opens the Specification of equity.

Fill in the details required. MyTax will automatically calculate the negative or positive amount of equity at the end of the accounting period. MyTax will also transfer this information to your next year’s tax return as “Equity at the start of the accounting period”.

Enter the difference between private withdrawals and private investments under Private withdrawals and private investments at Specification of equity.

How to file on paper forms

Fill in these details in section 13 of the form.

Indicate negative amounts with the minus sign (–).

The company’s equity at the start of the accounting period is determined primarily by the gains and losses from previous accounting periods. Enter the equity at the end of the previous accounting period in the field “Equity, start of year”.

 

If the equity is negative due to private withdrawals and the company has had to loan money to cover the withdrawals, a portion of the loans is allocated to financing of private withdrawals instead of business activities. Interest on such loans is not deductible as a business expense.

In this section, calculate the portion of interest that you cannot deduct from business income due to negative equity.

There may also be restrictions for the deductibility of interest if the equity is positive due to a revaluation increase. Read more about restrictions for the deductibility of interest (Tax Administration's statements on business tax issues, 1531/345/2003).

If pursuant to the provisions of the act on income tax (Tuloverolaki 1535/1992) the interest calculated on the basis of residual negative equity is deductible from a personal source of income, you can deduct it from your capital income on your pre-completed tax return.

How to file in MyTax

You will see this section in MyTax if your equity is negative. MyTax will calculate the amount of non-deductible interest expenses.

How to file on paper

Fill in these details in section 11 of the form.

Instructions for filing on paper:

Calculate and report here the non-deductible interest expenses:

  • Enter negative equity as shown in the balance sheet at the end of the accounting period (do not enter the minus sign).
  • Add the revaluation increase included in equity to the negative equity of the closing balance sheet. 
  • Subtract from this amount the loss for the accounting period and any losses from previous accounting periods that cannot be covered by retained earnings.
  • Enter the result in the line “Adjusted negative equity” and transfer the adjusted negative equity to the calculation of net worth in section 12.2 (Business liabilities), line “Adjusted negative equity”. However, please note that this amount must not exceed the business operation’s total debt.
  • Multiply the adjusted negative equity by the basic interest rate on the date of financial statements plus one percentage point. Report the resultant amount at “Non-deductible interest on business income”. The basic interest rate from 1 January 2020 to 31 December 2020 was -0.25%.
  • Deduct this non-deductible interest from the total amount of interest on business income in section 2.3, line “Interest expenses”. Report the difference in line “Deductible portion”. The amount of non-deductible interest cannot exceed the interest expenses in total.

There may also be restrictions for the deductibility of interest if the equity is positive due to a revaluation increase. Read more about restrictions for the deductibility of interest (Tax Administration's statements on business tax issues, 1531/345/2003).

If pursuant to the provisions of the act on income tax (Tuloverolaki 1535/1992) the interest calculated on the basis of residual negative equity is deductible from a personal source of income, you can deduct it from your capital income on your pre-completed tax return.

If you use your car both for private driving and for business purposes, see instructions.

If you take goods from the company for your own private use, record their value as business income (private use entered as income) in the company’s accounting. You can use the original purchase price of the goods as their value. If the probable selling price of the goods is lower than the original purchase price, you can also use the selling price here.

Example: In 2020, Antti purchased 6 pieces of the same sports equipment for his company. The equipment was intended for sale, and the total price Antti paid was €3,000. This means that the original purchase price for one piece of equipment was €500. Antti takes two pieces of equipment for his own use. He must therefore record €1,000 as business income (2 x €500). 

Private withdrawals: if you withdraw money from the company for your own use

You cannot pay wages to yourself, to your spouse or to your children who are less than 15 years old. If you withdraw money from the company’s bank account, it is considered a private withdrawal. Do not enter it in the accounts as a business expense. In tax assessment, the money you have withdrawn is treated as taxable profit from the business operation.

If your spouse works for the business operation, the business income is divided between the two of you in tax assessment.

Revenue details

Report income without including VAT. If you are liable to pay VAT, file a VAT return separately.

The amount of net sales is the sales revenue from the company’s regular operations. Enter the revenue without the VAT included in the sales. Also deduct from the revenue any taxes directly based on the volume of sales (such as pharmacy tax) as well as any discounts you have given to customers.

Cars, dwelling, business trips and private use

In this section, report information on vehicles that are part of the business operation’s fixed assets. A vehicle is included in the fixed assets of business operations if the number of kilometres driven for business purposes is more than half of the total number of kilometres driven during the tax year.

What to report on a car included in fixed assets on the company’s tax return

Expenses caused by driving for business purposes can be deducted as business expenses. Do as follows:

  • Record all expenses related to the vehicle in the company’s accounts. These include fuel, maintenance and insurance costs, and depreciation or decreasein the car’s value (part of the expense related to the business operation). The actual expenses recorded in the accounts can be deducted in tax assessment.
  • You cannot deduct expenses related to private driving in your company’s taxation.
  • Calculate the part of the expenses related to private driving as follows: Add up the total amount of vehicle expenses and the car’s annual depreciation. Divide this figure by the total number of kilometres driven. Finally, multiply the result by the number of kilometres driven for private purposes as recorded in the driver’s log.

If you have deducted expenses related to private driving in the company’s accounting, you must add the corresponding amount to the company’s revenue. 

 See instructions on how to keep a driver’s log and how to calculate the expenses related to private driving

How to file in MyTax

  • Enter the total expenses in the Revenues stage, in the section Vehicles included in business equipment. Also include the vehicle’s depreciation in these expenses.
  • Enter the vehicle’s depreciation in the Expenses stage, at “Depreciation”. 
  • Select the vehicle you are entering details for.
  • State whether the use data is based on a driver's log or other clarification. 
  • At “Business use”, enter the total number of kilometres driven for business purposes with the vehicles included in business equipment.
  • At “Private use”, enter the number of kilometres driven for private purposes.
  • Based on the details you enter, MyTax calculates the vehicles’ total number of kilometres for the tax year.
  • At “Total expenses”, enter the total expenses as recorded in the accounts. Also include the vehicle’s depreciation in these expenses.
  • If you have recorded all the car’s expenses in the accounts (including expenses for private use), select Expenses for private driving have been deducted in the accounts.
  • If you have recorded only the expenses related to business use in the accounts, select Expenses for private driving have not been deducted in the accounts.

How to file on paper forms

  • Specify the kilometres driven and calculate the expenses in section 6 of the tax return. Separate between kilometres driven for business purposes and for private purposes.
  • Transfer the amount given in the “Private use as a share of total expenses” field in section 6 to the tax return’s section 2.1, subsection “Use of business assets for private purposes, if included in business accounting”, line “Private use of car”.
  • In addition, fill in the details on the depreciation in section 2.3 of the tax return and specify the depreciations in section 5. Read more about filing depreciation.

In this section, report the expenses caused by using a private vehicle for business purposes. A vehicle is considered to be private if 50% or less of the kilometres driven during the tax year were for business purposes

If you use your private car for business purposes, you may be entitled to an additional deduction for the vehicle expenses related to business driving.

You must keep a driver’s log  or other similar record of the times you use your private car for business purposes. Do not enclose the driver’s log with the tax return. We will request it if necessary.  

The additional deduction cannot be greater than the tax-exempt kilometre allowance for wage earners.

  • In 2020, the kilometre allowance was €0.43 / kilometre.

If you have deducted the car’s expenses in your company’s accounting, these amounts will be subtracted from the additional deduction. In this case, the additional deduction is the difference between the wage earners’ tax-exempt kilometre allowance and the amount of actual expenses you have deducted in the accounts.

If you have deducted expenses related to private car use in accounting and the total amount of the expenses exceeds the maximum amount of additional deduction calculated according to the Tax Administration’s cost allowance decision (linkki), the actual costs will be deducted in the tax assessment. As a result, no additional deduction can be made, so do not fill in this column.

Example 1: During the 2020 tax year, your drove 40,000 km with your car. Of this, 15,000 km were attributable to business use and 25,000 km to private use. Because the car was used more for private purposes than for business purposes, it is considered a private car. The expenses caused by the business use of the car have not been deducted in the company’s accounting. You can therefore make an additional deduction for the 15,000 km of business use: 15,000 km x €0.43 = €6,450.

Example: During the 2020 tax year, your drove 30,000 km with your car. Of this, 5,000 km were attributable to business use and 25,000 km to private use. Because the car was used more for private purposes than for business purposes, it is considered a private car. You have deducted the expenses caused by the business use in your company’s accounting as follows: Average vehicle expenses €5,000 : 30,000 = €0.167/km. Part of the expenses related to business use 5,000 x €0.167 = €835.00. Amount based on the maximum tax-exempt kilometre allowance 5,000 x €0.43 = €2,150.00. Additional deduction €2,150 - €835 = €1,315.

See instructions

What is driving for business purposes?

How to keep a driver’s log 

How to file in MyTax

Enter the total number of kilometres driven in the tax year as well as the number of kilometres driven for business purposes. Also state whether the use data is based on a driver's log or other similar clarification.

Based on the details you enter, MyTax calculates the maximum amount of the additional deduction in total.

If you have deducted expenses related to a car that is a private asset in the business operation’s accounting, answer Yes to “Have you deducted the expenses in the accounts or the notes?” and enter the amount you have deducted.

Based on the details you enter, MyTax calculates the amount of the additional deduction.

How to file on paper forms

Fill in the details required for the additional deduction in the tax return’s section 10, “Itemisation of private car use for business purposes”, as follows: 

  • Field 1: State whether the use data is based on a driver's log or other similar clarification.
  • Field 2: Enter the total number of kilometres driven with the car during the tax year.
  • Field 3: Enter the number of kilometres driven for business purposes during the tax year.
  • Field 4: Enter the maximum amount of the additional deduction per kilometre during the tax year. In 2020 the maximum deduction is €0.43/km. The amount per kilometre may be increased in certain situations
  • Field 5: Calculate the maximum amount of deduction in total (multiply the number of kilometres driven for business purposes with the maximum amount of deduction per kilometre).
  • Field 6: Enter the amount you have deducted in accounting as expenses for a car included in private assets.
  • Field 7: Calculate the amount of additional deduction by subtracting from the maximum amount the expenses that you have deducted in accounting. If you have not deducted any expenses for a car included in private assets in accounting, enter here the same amount that you entered in subsection 5.

Include the additional deduction in the amount entered in section 2.3 at “Additional deductions”.

You may receive an additional deduction in tax assessment if you have made temporary business trips. A temporary business trip is a trip you have made outside your regular area of operation, such as a training trip, a trip to pick up goods or a temporary long-distance trip for selling products. If the business trip took place inside your company’s regular area of operation, you cannot get the additional deduction. Read more about deducting expenses related to business trips. 

The maximum amount for the additional deduction is the same as the maximum daily allowance payable to wage earners. See the amounts in the Tax Administration decision

If you have deducted your increased living expenses in accounting and the total amount of the expenses exceeds the maximum amount of additional deduction calculated according to the Tax Administration’s cost allowance decision (linkki), the actual costs will be deducted in the tax assessment. As a result, no additional deduction can be made, so do not fill in this column.

How to file in MyTax

Separate between different types of travel days:

  • domestic business trips lasting over 6 hours but less than 10 hours 
  • domestic business trips lasting over 10 hours
  • international trips.

Open the specification for the trip in question and fill in the following details:

  • number of travel days, and
  • whether you have deducted all or some of the expenses related to the trip in your accounting. If you have deducted these expenses in the accounting, enter the amount deducted.

MyTax calculates the amount of the additional deduction.

How to file on paper forms

Fill in the following details in section 9:

Separate between different types of travel days:

  • domestic business trips lasting over 6 hours but less than 10 hours
  • domestic business trips lasting over 10 hours
  • international trips.

Columns 2–6:

Column 2: Enter the number of travel days in the specifications.  

Column 3: Enter the maximum deductions for domestic travel per travel day. See the amounts in the Tax Administration decision.

Column 4: Calculate the maximum amount of deduction for all travel days in total. To calculate the maximum amount of deduction for travel abroad, multiply the total travel days in each country by that country's foreign per diem allowance and add together the amounts of all the countries. See the amounts of foreign daily allowance per country in the Tax Administration’s cost allowance decision.

Column 5: On each line, enter the portion of the increased living expenses related to temporary business travel that you have deducted in accounting.

Column 6: Calculate and enter here the amount of additional deduction: subtract from the maximum amount the expenses that you have deducted in accounting. If you have not deducted any of the increased living expenses in accounting, enter here the same amount that you entered in column 4 (Total maximum amount).

Section 2.3, “Additional deductions”: Calculate the total amount of the additional deduction.

If you have privately used commodities that have been registered as business expenses, the private household’s share of the expenses must be filed as income.

Private use of goods

If goods have been taken into private household use, enter the total amount of their original acquisition costs without VAT.

Other private use

Report the portion attributable to private use of a business-related telephone, real estate unit, holiday home or boat. If you are using a real estate unit that belongs to the business operations for private purposes, report the portion of the expenses and depreciation that corresponds to the private use.

Example: 60% of a real estate unit owned by a private business operator is used as a workshop and 40% as the business operator's own dwelling. The interest expenses attributable to the real estate unit are €8,000. The depreciation for the building is €2,000. Other expenses relating to the building are €3,000 in total. The portion added to the company’s business income under 'other private use’ is €5,200, i.e. 40% of the total expenses (€13,000).

Do not report cash withdrawals in this section. Report them in the Background information stage in MyTax. If you are filing on paper, enter them in section 7 of the form.

How to file on paper forms

Fill in these details in section 2.1 at “Use of business assets for private purposes, if included in business accounting”.  

Other business revenue

Grants and subsidies include all grants, subsidies and benefits that you have received for your business activities, such as employment subsidies. If you have been granted a VAT relief for small businesses, enter the amount here.

Report here only such grants and subsidies relating to business activities (from the Ministry of Economic Affairs and Employment, Ministry of the Environment, Business Finland, etc.) which have been recorded directly as revenue.

Do not report here any grants you have received from the public sector for the purchasing of fixed assets. Instead, enter them as income indirectly by deducting them from the acquisition cost.

Separate between

  • the total amount of dividends received from listed companies, and
  • the total amount of dividends received from non-listed companies.

A company is listed if its securities are subject to trade on the stock exchange, for example. 

The taxable portion of dividends received from a business source of income is determined by whether the dividends are distributed by a listed company or by a non-listed company.

How to file in MyTax

MyTax calculates the taxable portion based on the details you enter.

How to file on paper

Calculate and fill in these details in section 2.1 of the form.

At “Dividends from listed companies”, fill in only the taxable portion in euros.

  • 85% is taxable business income and 15% is tax-exempt income. 

At “Dividends from non-listed companies”, fill in only the taxable portion in euros.

  •  75% is taxable business income and 25% is tax-exempt income.  

Report surplus you have received from listed and non-listed cooperatives separately. A cooperative is publicly listed if its shares are subject to trade on the stock exchange, for example.

The taxable portion of the surplus is determined by whether the payor is a listed or non-listed cooperative.  There are currently no listed cooperatives in Finland.

25% of surplus from a non-listed cooperative is taxable business income and 75% is tax-exempt income, provided that the surplus amount is no more than €5,000 per year. If the surplus amount is more than that, 75% of the exceeding amount is treated as taxable business income and 25% as tax-exempt income.

In other words, surplus is taxed more leniently up to a total of €5,000. The €5,000 threshold is specific for the taxpayer and can be applied only once a year. If you are running a business with your spouse, you can use the remaining part of your spouse’s €5,000 tax relief in your business tax return. 

If you have received surplus from multiple sources, see the instructions (linkki)

Surplus refunds, which are tax-deductible for cooperatives, are fully taxable income for the surplus recipient when the refunds relate to business activities.

The amount you have reported as taxable may change, because the Tax Administration checks the remission based on the available details and updates the figure, if necessary.

How to file in MyTax

Report the surplus you have received from listed and non-listed cooperatives separately. MyTax calculates the taxable portion of the surplus received from listed cooperatives. Report the taxable portion of the surplus received from non-listed cooperatives yourself.

How to file on paper

Fill in these details in section 2.1 at “Taxable portion” under “Dividends and surplus”.

In this section, report income such as interest income from receivables and foreign exchange gains.

An operating reserve can be deducted in taxation if it has been recorded in the accounts. The maximum reserve is calculated yearly based on the wages that have been paid out during the 12-month period. 

The total amount of operating reserves created in the tax year and unreleased operating reserves created in previous years may not exceed 30% of the wages subject to withholding that you have paid during the 12 months preceding the end of the accounting period. 

Determine the operating reserve separately for each tax year. The operating reserve maximum may be exceeded if the amount of wages has decreased since the previous year. In that case, the exceeding  part of the operating reserve made previously is taxable income for the tax year (decrease of reserves).

Report the amount of the operating reserve at the end of the preceding tax year and the operating reserve you made during the tax year. 

How to file in MyTax

At Total decrease of reserves to be entered as income, enter the calculated decrease of operating reserve and add to it any decreases of other reserves, such as unused replacement reserve recorded as revenue.

If you have made other reserves in addition to operating reserves

Specify all reserves on Form 62.You can find Form 62 in the Expenses stage, at the Depreciation section. Answer Yes to Have you made depreciation of other assets than movable fixed assets?

How to file on paper forms

Enter the total decrease of reserves entered as income in section 2.1, line “Relieved write-offs and reserves”. If you have only made operating reserves, report the amount of the operating reserve in section 14.

If you have also made other reserves, itemise all the reserves on Form 62.

In this section, report all the taxable income that is not included in any other section. For example, your business operation may have received income from capital gains of fixed assets or from damages. Also report any taxable income that is not recorded in the profit and loss account for the accounting period as other taxable income.

In this section, report the total amount of tax-exempt revenues that are recorded in the profit and loss account.

Examples of tax-exempt revenues:

  • refunds of subscription charges for electricity, telecommunication, water, sewage or district heat networks paid to the network operator.
  • interest on deposit accounts to which the act on tax at source on interest income (Laki korkotulon lähdeverosta 1341/1990) applies.

Do not include tax-exempt income in the income items reported in the calculation of taxable income.

How to file on paper forms

Fill in these details in section 2.2 at “Tax-exempt income in the income statement”. 

Details on expenses

If you are liable to pay VAT, report expenses without including VAT. File a VAT return separately. If you are not liable to pay VAT, report expenses with the VAT included.

In this section, report the acquisition costs of the goods sold during the accounting period.

To calculate the acquisition cost, adjust the amount of purchases in the accounting period with the inventory changes to finished and unfinished products.

Calculate the purchases and changes in inventory with the following formula:

Initial stock

+ purchases during the accounting period

- final inventory.

In this section, report any services, work and subcontracts which relate to your company’s regular operations and for which you hired an outside operator.

Report the wages, salaries and fringe benefits you have paid to people employed in your business activities as well as any indirect wage expenses deducted as expenses for the accounting period. However, you cannot deduct wages, pensions or other benefits that you have paid to your spouse or to a family member who was less than 14 years old at the beginning of the tax year.

Report pensions and staff expenses that you have paid. The staff expenses include, for example, insurance contributions and the like arising from provision of pension, sickness and disability benefits and other such benefits and rights for employees and their relatives.

At Wages affecting how business income is divided into earned income and capital income, enter the wages subject to withholding that you have paid in the 12 months preceding the end of the tax year. 30% of these wages is added to the net worth of the business, which means that they affect how the business income is divided into earned income and capital income.

How to file on paper forms

Fill in these details in section 15 of the form.

Acquisition costs for commodities with a probable economic life of more than 3 years are deductible as depreciation.

You can make increased depreciation, i.e. tax relief depreciation, on new deployed machinery and equipment in the tax years 2020–2023.
Movable fixed assets are treated as a whole. Report the value of the depreciation on movable fixed assets as recorded in the accounting and the undepreciated balance at the beginning of the tax year.

The maximum amount that can be depreciated for tax purposes is the amount that has been recorded in the accounts for the current or previous tax years. In addition, the total amount of depreciation to be deducted may not exceed the maximum depreciation laid down in the act on the taxation of business income.

Read more: depreciation on fixed assets.

How to file in MyTax

If you only report depreciation on movable fixed assets, enter the value of the movable fixed assets you have taken into use during the tax year at “Increase during the tax year” and the amount of selling prices and insurance indemnities received for fixed assets during the tax year at “Selling prices and insurance indemnities”.

MyTax calculates the maximum depreciation (25%) according to the act on the taxation of business income (Laki elinkeinotulon verottamisesta 360/1968). Enter the depreciation for the tax year and the additional depreciation in their respective fields.

If you reported depreciation on moveable fixed assets on Form 62 in the previous year, MyTax will ask you to complete Form 62 this year also. If you do not want to file depreciation on moveable assets on Form 62, clear the form and enter the details under Depreciation on the acquisition cost of movable fixed assets

If you also depreciate other assets than movable fixed assets or file tax relief depreciation for new machinery

Answer Yes to “Have you made depreciation of other assets than movable fixed assets?”  Open the specification and fill in the details of Form 62.

You can also use Form 62 to report details on other reserves in addition to operating reserves. 

How to file on paper forms

Fill in these details in section 2.3 of the form, at “Depreciation”.

Separate between the depreciation made in the accounting and the tax-deductible portion of the depreciation (§ 24, § 30–34 and § 36–41, act on the taxation of business income (Laki elinkeinotulon verottamisesta 360/1968)). Also report any depreciation from previous years that has not been deducted in your tax assessment (unused depreciation) and that you want to deduct in the tax year. Specify the unused depreciation on Form 12A (Specification of unused tax depreciation).

If you have only depreciated movable fixed assets, provide an itemisation in section 5 of the tax return, at “Depreciation on acquisition cost of movable fixed assets”.

To the amount reported at “Undepreciated acquisition cost at start of tax year”, add the fixed assets you have acquired during the tax year (“Increase during tax year”) and then subtract the selling prices and insurance indemnities you have received (“Selling prices and insurance indemnities”). The result is your undepreciated acquisition cost. You can make a depreciation of up to 25% from it during the tax year.

If you are also making depreciations on other than movable fixed assets, provide itemisations on Form 62 (Itemisation of reserves, revaluations and depreciation).

If you make tax relief depreciation (e.g. due to taking a new piece of machinery into use), report all details on movable fixed assets on Form 62.

In this section, report any depreciation from previous years that has not been deducted in your tax assessment (unused depreciation) and that you want to deduct in the tax year.

How to file in MyTax

Select Yes and open the specification (Form 12A).

How to file on paper

On Form 12A (Deferred depreciation)

Entertainment expenses are such expenses recorded in the accounts that have arisen from promoting business activities by entertaining clients and partners.

Enter the total amount of entertainment expenses as recorded in the accounts.

You can deduct 50% of entertainment expenses.

How to file in MyTax

Enter the total amount. MyTax calculates the deductible portion of entertainment expenses.

How to file on paper forms

Calculate the deductible portion yourself and fill it in on the tax return form.

In this section, report the total amount of business-related rental expenses according to the accounting. Expenses can arise from renting facilities and equipment, for example.

In this section, report the amount of interest expenses related to the business operation deducted in the accounts as well as the tax-deductible amount.

If you use single-entry bookkeeping, enter here the interest expenses for loans relating to business operations that you have deducted in accounting.

If you use double-entry bookkeeping, calculate the deductible amount by subtracting any non-deductible interest expenses from the total amount of all interest expenses. The amount of non-deductible interest expenses can never be higher than the interest expenses in total.

Do not include surtax, penalty interest, late-filing penalties, or any late-payment interest or late-payment interest with relief related to taxes. These expenses are not tax-deductible.

How to calculate the amount of non-deductible interest expenses in MyTax

Calculate the amount in MyTax in the Background stage, at “Calculation of interest expenses that are not deductible as business expenses”.

How to file on paper forms

Fill in these details in section 11 of the tax return.

In this section, report other financial expenses as recorded in the accounting. Examples of other financial expenses:

  • loan management costs
  • bank fees for providing a credit limit
  • bank guarantee commissions
  • credit insurance expenses
  • mortgage expenses
  • recovery and collection expenses
  • exchange rate losses.

In this section, report other deductible business expenses that are included in the profit and loss account for the accounting period but that are not reported as business expenses elsewhere in the calculation of taxable income. Examples of other deductible expenses:

  • travel expenses 
  • motor vehicle expenses 
  • leasing fees.

Do not report any additional deductions for travel and vehicle expenses in this section.

How to file in MyTax

Fill in these details in the Expenses stage, at Additional deductions based on car expenses or travel expenses.

How to file on paper forms

Fill in these details in section 2.3 at “Additional deductions” and in sections 9 and 10. 

A negative result for the tax year can either be recognised as business loss or deducted in part or in full from the capital income of the self-employed person.

If spouses run the business together, a request for the deduction of loss from capital income is deemed to be a joint request. The Tax Administration divides the allowable loss deducible from capital income between the spouses on the basis of their percentage shares of work as reported at ‘Working at point of service (percentage)’ in section 4 (Division of business income between spouses).

How to file in MyTax

If you select No at “Deduction for loss from capital income”, the Tax Administration will deduct the allowable loss from the business income over the next 10 tax years as income accrues.

If you select Yes at “Deduction for loss from capital income”, the loss or part of it is deducted from capital income. Enter the amount of loss in euros that you want to be deducted. 

How to file on paper forms

If you want the Tax Administration to treat the tax year’s negative result as a business loss, do not fill in section 3 of the tax return. The Tax Administration will then deduct the allowable loss from the business income over the next 10 tax years as income accrues.

If you want the Tax Administration to treat the loss or part of the loss as a deduction from capital income, report the amount in euros that you want to be deducted in the tax return’s section 3.

Business assets

Report details on assets based on the data for the accounting period that ended last. Use the undepreciated acquisition cost of the assets when you enter them in the calculation. Exceptions are separately specified in these instructions.

Real estate units, buildings and structures

Specify the details on real estate units, buildings and structures included in fixed business assets on Form 18B. A real estate unit comprises a land area and the buildings located on it. Real estate also refers to a building, structure or other facility that is located on another owner's land and that can be handed over to a third party without consulting the landowner so that the right of possession to the land is also transferred (§6, act on income tax (Tuloverolaki 1535/1992)). For each real estate unit, report both the undepreciated acquisition cost and the unit’s comparison value (the comparison value is the taxable value for the tax year whose end date is used in the calculation of net worth). The comparison is made separately for each real estate unit, and the higher of the two values is used in the calculation of net worth.

How to file in MyTax

Click Open specification to report the real estate units, buildings and structures included in the business operation’s fixed assets. MyTax automatically selects the highest available value for each real estate unit and calculates their total value.

How to file on paper forms

Transfer the total value of real estate units from Form 18B to line “Real estate, buildings and structures” in section 12.1 “Business assets” on the tax return.

Machinery and equipment

Report here the value of the machinery and equipment intended for permanent business use. The value of the machinery and equipment is the part of the acquisition cost that is not depreciated in income taxation.

How to file in MyTax

If you have filled in Form 62 on movable fixed assets in the Expenses stage, the value of machinery and equipment is automatically transferred to the “Movable fixed assets” field. In this case, enter the same figure at “Machinery and equipment”.

Other fixed assets

Report the value of commodities included in other fixed assets. Other fixed assets include gravel and sand pits, ore and mineral deposits, quarries, peat bogs, railways, dams, bridges and reservoirs.

Enter the value of goods included in the business assets and the value of other current assets separately.

Goods are commodities purchased from an external supplier, intended for selling. If you are engaged in wholesale trade or retail trade, also add the packaging materials acquired for the purpose of selling the goods.

Other current assets include materials, supplies and self-manufactured products.

Specify securities included in fixed assets and financial assets on Form 8B. Report the quantity of securities included in the business operation for each security that you own. In addition, report both the undepreciated acquisition cost for purposes of income tax and the security-specific comparison value for each asset.

The comparison value of a listed security is 70% of the last trading price on the financial statement date of the business operator or self-employed individual. The comparison value of a mutual fund share is 70% of the fair market value at the end of the tax year. The comparison value of a non-listed share is the taxable value given in the tax decision of the company in question. The taxation value for 2005 is used as the comparison value for housing-company shares acquired before 1 January 2006. Housing company shares acquired on or after 1 January 2006 do not have any comparison value, which means that the acquisition cost not depreciated for income tax purposes must also be entered in the “Comparison value” column.

How to file in MyTax

Based on the details you enter, MyTax automatically calculates the value used in the calculation of net worth.

How to file on paper forms

Use Form 8B to compare which amount is greater: the total undepreciated acquisition cost of securities included in fixed assets and financial assets, or their total comparison value. Compare the amounts entered on the final line of Form 8B (Fixed assets and financial assets in total).

If the total undepreciated acquisition cost is greater, copy the sum total of undepreciated acquisition costs from the line “Käyttöomaisuus yhteensä” (fixed assets in total) of Form 8B to the tax return’s section 12.1, subsection “Fixed assets”, line “Fixed-asset securities”, and also copy the sum total of undepreciated acquisition costs from the line “Rahoitusomaisuus yhteensä” (financial assets in total) of Form 8B to the tax return’s section 12.1, subsection “Financial assets”, line “Financial-asset securities”.  If the total comparison value is greater than the total undepreciated acquisition cost, enter the sum total of the comparison values on the same line.

Enter accounts receivable, cash-in-hand and other financial assets separately.

Accounts receivable include current and non-current accounts receivable and instalment accounts receivable. Cash-in-hand includes the cash assets of a business operator or self-employed person. Other financial assets include business-related receivables that are not based on sales of goods or services, for example.

Do not include bank deposits in the financial assets of the business operation. Interest income that accrues on a bank account is not taxed under the act on income tax, but under the act on tax at source, which is why the bank account capital is not included in the business assets either.

Business liabilities

Report details on liabilities based on the data for the accounting period that ended last.

Report both current and non-current liabilities. A liability is regarded as current (short-term) if it is due for payment within a year or less. A liability is regarded as non-current (long-term) if it is due for payment after a year or more. 

Calculated tax liabilities under the Accounting Act (chapter 5, § 18) are not regarded as liabilities in the calculation of net worth.

How to file in MyTax

The information on adjusted negative equity will be transferred to this section from the specification entered in the Background stage. If the amount is the same as or higher than the total amount of current and non-current liabilities, the amount of business liabilities is 0.

How to file on paper forms

In section 12.2., fill in the amount of adjusted negative equity that you calculated in section 11 (Calculation of non-deductible interest expenses) of the tax return. However, please note that this amount must not exceed the business operation’s total debt. At “Total business liabilities”, add together the current and non-current liabilities and subtract from the result the amount of adjusted negative equity.

Other details and claims

In this section, report the capital gains that you have received from securities and real estate included in fixed assets. Capital gain means the positive difference between the selling price and the undepreciated acquisition cost. Add the amount of capital gains to the revenues that you report in the “Revenues” section of the tax return.

You must provide a separate account of these capital gains, because the minimum amount deemed as capital income is equivalent to the amount of capital gains on fixed-asset real estate and securities. However, do not enter here the portion of capital gains from which a replacement reserve has been created.

How to file on paper forms

Report these details in section 16, “Capital gains for securities and real estate included in fixed assets”.

Business income is capital income up to the amount corresponding to a 20% annual return on the net worth of the business in the previous tax year.

You can also request an alternative way of dividing business income:

  • I request that the maximum amount of capital income be 10% of net worth.
  • I request that the distributable business income be fully treated as earned income.

You can only request one or the other. From a tax assessment perspective, the best option depends on the earned income of both the business operator and their spouse and the deductions made from the income.

If spouses operate the business together, the request on the division of business income is considered a joint request.

How to file on paper forms

You can request different division of business income in the tax return’s section 17.

Give more detailed accounts if you claim credit for taxes paid abroad, if you have a permanent establishment abroad or if you have income shares from a CFC.

  • Do you claim credit for taxes you have paid to another country?
  • Do you claim credit for taxes you have paid to another country?
  • Have you received income shares from a CFC?

How to file in MyTax

If you answer Yes to the questions above, open the specification and fill in the required details.

How to file on paper

On Form 70 (Claim for removal of double taxation)

On Form 75 (Profits of a permanent establishment located in a foreign country)

On Form 74 (Calculation of CFC income)