Starting up business
- Date of issue
- 2/12/2021 - 7/1/2021
- Replaces guidance
- VH/3057/00.01.00/2018, 2019
This is an unofficial translation. The official instruction (record no VH/313/00.01.00/2021) is drafted in Finnish and Swedish languages.
This guidance instructs what returns and accounts a foreign company must file with the Finnish Tax Administration when starting business operations in Finland.
The guidance has been updated due to changes in the act on income tax (Tuloverolaki 1188/2020) that entered into force on 1 January 2021. The changes to § 9 of the act include provisions based on which a foreign corporate entity is treated as a resident taxpayer in Finland if the corporate entity’s place of effective management is in Finland. For more information on how a foreign corporate entity’s tax residency status and the location of its place of effective management are determined, see the Tax Administration guidance on resident and non-resident corporate taxpayers (in Finnish).
In addition, Chapter 10 has been updated based on regulations on exit tax that entered into force on 1 January 2020. The language of the guidance has also been clarified. There have been changes to the structure of the guidance, as well.
The United Kingdom’s exit from the EU entered fully into force at the start of 2021. For more information on how Brexit affects VAT, see the Tax Administration’s bulletin Brexit’s impact on taxation.
1 Foreign company’s liability for income tax
A foreign company means a company that has been established or registered outside Finland. Foreign companies are usually considered non-resident taxpayers in Finland with limited tax liability. However, if the company’s place of effective management is in Finland, it is considered a resident taxpayer with full tax liability in Finland.
National legal rules governing foreign companies' liability to tax are found in § 9, § 10 and § 13 a of the act on income tax (Tuloverolaki) and in § 83 of the act on assessment procedure (Laki verotusmenettelystä).
Foreign companies are considered non-resident taxpayers with limited tax liability, unless their place of effective management is in Finland. Non-resident foreign companies are usually only liable to pay tax to Finland on income received from Finland, such as income earned by operating a trade or business here. However, if a non-resident company has a permanent establishment in Finland, the company is liable to pay tax on all income related to the permanent establishment.
In Finnish national legislation, the definition of a permanent establishment is in § 13 a of the act on income tax. In addition, the tax treaties Finland has signed with other countries normally include further details on how a permanent establishment is defined for companies located in the contracting states. A permanent establishment is a fixed place of business through which the company runs some or all of its operations. For more information on the existence of a permanent establishment and the income taxation of a foreign corporate entity, see the Tax Administration guidance Income taxation of nonresident foreign corporate entities. The principles of determining the existence of a permanent establishment described in the guidance also apply to the tax assessment of partnerships. For more information on how an existence of permanent establishment is defined in the income tax assessment of a foreign business operator, see the Tax Administration guidance Income taxation of foreign self-employed individuals.
In certain circumstances, Finland has the right to levy tax on certain income that a non-resident company has received from Finland even if the company does not have a permanent establishment in Finland. Under Finnish national legislation, Finland has the taxing rights with respect to income generated by real estate property including flats and apartments in housing-companies if they are located in Finnish territory. For this reason, rental income received from the property is taxable, or if the property is sold for a profit, this profit is a taxable capital gain (§ 10, act on income tax). In addition, a company may be liable to pay tax at source to Finland on dividends or other such income received from Finland.
Tax treaties may restrict the taxing rights of Finland, when such rights are based on Finland's national legislation. In cases where Finland does not have a tax treaty with the country in which a foreign corporation is resident, the right of the Finnish government to levy taxes is determined solely on the basis of Finland’s national tax legislation. You can see the list of tax treaties currently in force on the Tax Administration’s Tax treaties page.
1.2 Tax residency
A corporate entity established or registered abroad is a resident taxpayer with full tax liability in Finland if its place of effective management is in Finland. The corporate entity’s place of effective management is considered to be in Finland if its board or other decision-making body that makes the highest-level decisions on daily management is located in Finland. However, when the location of the place of effective management is being determined, other circumstances relevant to the company’s organisation and business operations are also taken into account.
The period during which a foreign corporate entity treated as a resident taxpayer liable for tax usually begins either from the date it was founded or registered or from the date when Finland became the country of its place of effective management. However, the earliest date when the place of effective management can be formed is 1 January 2021.
A foreign corporate entity that is a resident taxpayer in Finland is liable to pay tax to Finland on income received from Finland and from abroad. The tax assessment of a resident foreign corporate entity is conducted according to the same provisions as the taxation of a domestic corporate entity. Factors such as the source of income, taxability of income and deductibility of expenses are determined in the same way as in the tax assessment of a Finnish corporate entity.
If the circumstances based on which the place of effective management was deemed to be located in Finland no longer exist, the place of effective management can no longer be considered to be in Finland. Therefore the foreign corporate entity can no longer be considered a resident taxpayer in Finland, starting from the date when the place of effective management was no longer in Finland. If the corporate entity is still considered to have a permanent establishment in Finland, the foreign corporate entity is treated as a non-resident taxpayer based on the permanent establishment.
For more information on how a foreign corporate entity’s tax residency status and the location of its place of effective management are determined, see the Tax Administration guidance on resident and non-resident corporate taxpayers.
2 Start-up notification
Both resident and non-resident foreign corporate entities must submit a start-up notification to the Tax Administration to register the company before it can start business activities in Finland. Based on the notification, the company is issued a Business ID and the company is entered in the Tax Administration’s register of taxpayers. The company can also use the start-up notification form to request entry into the VAT register, the register of employers and the prepayment register, if such registrations are necessary for the company’s activities. In the insurance industry, it is required that every insurance company operating in Finland be registered as liable for tax on insurance premiums.
The start-up notification must be filed on Form Y1, Y2 or Y3. These forms are published jointly by the Tax Administration and the Finnish Patent and Registration Office (PRH). Form Y1 is for setting up a business when the founder is a foreign corporate entity. Foreign businesses comparable to Finnish general partnerships and limited partnerships must use Form Y2, and similarly, foreign self-employed individuals use Form Y3. Read more about start-up notifications for foreign businesses on ytj.fi.
Foreign companies must enclose a Trade Register certificate or similar, issued by the authorities of their country and add a translation into English, Finnish or Swedish. The certificate or other account must include the following:
- company name
- its municipality of registration
- line of business
- accounting period
- list of the people who may sign for the company.
If the certificate does not include these details, the foreign company (if it is a limited-liability company or a partnership) must additionally enclose a photocopy of its Articles of Association, Charter or a similar agreement and add a translation into English, Finnish or Swedish.
In addition to the above, when the foreign business is comparable to a Finnish general or limited partnership, the following information on the people being its partner-shareholders is mandatory:
- Finnish personal ID, if issued
- date of birth
In the case of foreign self-employed individuals, if there is a registration in force in the domicile country in the trade register or a comparable registration, the self-employed individual must enclose a registration excerpt and the details listed above. Foreign self-employed individuals are always expected to enclose a photocopy of their passport.
A foreign corporate entity that has a permanent establishment in Finland must report its place of effective management as additional information on Form 6204 enclosed with the corporate entity’s Form Y. In addition, the foreign corporation must enclose a free-form account of the facts related to existence of the permanent establishment.
Foreign companies conducting construction and installation must additionally enclose their building contracts in photocopy. Similarly, foreign companies engaged in leasing employees in Finland must enclose copies of their contracts.
If the foreign company already has a Business ID, it can enter into the Tax Administration’s registers by submitting a notification of changes. The same enclosures must be added to the notification of changes as to the start-up notification. A notification of changes must also be submitted if the company’s activities change from what was reported in the start-up notification and its enclosures or in connection with the company’s registration. Any changes that can affect the company’s liability to pay income tax or VAT or its registration status in Finland must be reported. Corporate entities must report changes on Form Y4, partnerships on Form Y5, and self-employed individuals on Form Y6. You can check the existence of a Business ID in Business Information System's Company Search on ytj.fi. The forms and instructions for filing are available on the Business Information System website (ytj.fi).
The company’s Form Y must be signed by a person who has the right to sign for the company or by another party they have authorised to do so. Forms and other documents are mailed to: PRH-Verohallinto, Business Information System, P.O. Box 2000, 00231 Helsinki, Finland.
When the foreign company has been registered based on a start-up notification or a notification of changes, the Tax Administration will send a notice of registration to the company. After the registration, the company’s registration details can be seen in the Business Information System’s Company Search on ytj.fi.
When the company is being registered, the Tax Administration aims to determine whether the company has its place of effective management or a permanent establishment in Finland for the purposes of income taxation. Whether the company has a permanent establishment for the purposes of VAT is also determined during registration. However, the tax residency status cannot always be resolved on the basis of the submitted registration details. Planned business may change, and the duration of its operation may be longer than expected. If the tax residency status cannot be determined in connection with registration, it will be determined during the assessment procedure based on the information provided by the company. The company can also request the Tax Administration to issue an advance ruling on their tax residency status for the purposes of income tax and VAT. Advance rulings are subject to a fee. If necessary, you can contact the Tax Administration in a number of ways. You can find the Tax Administration’s contact information in the Contact us section on tax.fi.
While it is normally not necessary to complete more than just one form, there are some circumstances when a company must inform the Trade Register authority separately (for example, when setting up a "Finnish branch" of the company). For more information, visit the website of the Finnish Patent and Registration Office (www.prh.fi) and (setting up a Finnish branch).
3 Registering for VAT
Under § 1 of the Value Added Tax Act (30.12.1993/1501), taxpayers must pay VAT on the sales of goods and services in the conduct of business which takes place in Finland. Companies that operate a business treated as liable to VAT must submit a notice, using a Form Y: either a start-up notification if the business is new (Forms Y1-Y3) or a notification of changes if the business is not new (Forms Y4 - Y6). The Tax Administration enters the company in the VAT register as of the date when VAT-taxable business operation begins.
However, a company can be entered in the register from the time it starts to acquire goods and services for a business treated as liable to VAT.
For the purposes of VAT assessment, a “foreigner” means a business operator that has a registered domicile for its business in another country outside Finland (§ 10, VAT Act). A foreign company that conducts business activities liable for VAT is required to register for VAT if the company has a fixed establishment for the purposes of VAT assessment in Finland, and that establishment takes part in the sales of goods or services in Finland, and the total turnover per accounting period is more than €15 000.
The existence of a foreign company’s fixed establishment for VAT purposes is determined based on the information provided in the start-up notification and on requests for further information, if necessary. For more information on what is considered a fixed establishment for the purposes of VAT, see the Tax Administration’s guidance on the VAT registration of foreign parties (available in Finnish and Swedish, link to Finnish).
A foreign company can also apply for VAT liability on a voluntary basis. To be able to register for VAT voluntarily, the foreign company must have a VAT representative approved by the Tax Administration if it does not have a domicile or a fixed establishment in any EU Member State, the United Kingdom, or Norway. The earliest possible time for applicants to be entered in the VAT register is at the date when the Tax Administration receives the application.
If the company is not required to register for VAT and it has not registered voluntarily, the buyer of the goods or services that the foreign company has sold in Finland is liable to pay the VAT on them (reverse charge mechanism, § 9, VAT Act).
However, the mechanism is not applied in the following circumstances, and the foreign business enterprise – the seller – should register for VAT if:
- The buyer is a foreign citizen with no fixed establishment and no VAT registration in Finland.
- The buyer is a private individual.
- The sale is what is known as a distance sale of goods from another EU country to individuals in Finland or to buyers equated with individuals. For more information, see the Finnish Tax Administration’s rules and procedures regarding distance selling.
- The services being sold are passenger transport services.
- The company offers a right of entry into educational, scientific, cultural, entertainment and sports events, fairs, exhibitions, etc., and services directly associated with such events.
If the foreign company does not have a fixed establishment for the purposes of VAT in Finland, the threshold for small-scale activities (when turnover per accounting period is no more than €15,000) as defined in § 3 of the VAT Act is not applied. In such a case, VAT must be paid regardless of the amount of sales.
Constructions services sold in Finland, as well as employee leasing related to construction, are subject to the VAT reverse charge mechanism (§ 8 c, VAT Act). Reverse charge will apply if the following two conditions are met:
- the service has the characteristics of construction services or the characteristics of employee leasing for purposes of building
- the buyer is a business that usually sells construction services or usually rents out workforce as leased employees, and the business performs these operations on an ongoing basis, not merely as an exception from its other operations in other sectors.
For more information on the VAT reverse charge in the construction industry, see the Tax Administration's detailed guidance on reverse charge liability (available in Finnish and Swedish, link to Finnish).
If a foreign company conducts tax-exempt intra-Community acquisition or supply in Finland, it has a reporting obligation in Finland. Foreign companies that conduct sales subject to zero-rate VAT, including intra-Community supply, must register for VAT in order to get refunds for the VAT included in the acquisitions made in Finland. For more information on intra-Community sales and supply as well as the tax liabilities related to them, see the Tax Administration’s detailed guidance on the subject (Arvonlisäverotus EU-tavarakaupassa) (available in Finnish and Swedish, link to Finnish).
VAT must be filed and paid in the Tax Administration’s MyTax e-service (tax.fi/mytax). For more information on filing and paying VAT, see the Tax Administration’s guidance on Self-assessed taxes.
For more information on VAT registration, see the Tax Administration’s guidance on the subject (Ulkomaalaisen rekisteröinti arvonlisäverovelvolliseksi Suomessa) (available in Finnish and Swedish, link to Finnish).
4 Registration as an employer
If you are an employer who pays wages on a regular basis and you are treated as having a permanent establishment for purposes of income taxation or you are treated as a resident taxpayer because your place of effective management is in Finland, you must sign up for the Tax Administration's register of employers. Employers that are not required to register can still choose to do so voluntarily.
Read more about paying employer’s contributions: Self-assessed taxes.
4.1 Non-resident taxpayers with a permanent establishment in Finland and foreign corporate entities treated as a resident taxpayer due to the place of effective management
If a foreign company has a permanent establishment in Finland for income taxation purposes or if its place of effective management is in Finland, it is treated in the same manner as a Finnish employer. The foreign company must therefore register as an employer if it pays wages regularly. An employer is considered to be paying wages regularly if it pays wages to two or more people on a permanent basis, or to at least six people at the same time even if their employment contracts are temporary and meant to be valid for a short term only.
The foreign employer company must withhold tax on the wages it pays, following the instructions printed on each worker’s tax card. Foreign employees staying for a shorter time than six months are issued a tax-at-source card at the local tax office. If the employee fails to show the card, you as the employer must withhold 35% tax at source. Foreign employees staying longer are issued the ordinary type of tax card; if such an employee fails to show it to you, you must withhold 60%.
In addition, you as the employer are required to pay the employer's health insurance contribution if the employee is insured in Finland according to the Health Insurance Act. However, you do not have to pay the contribution if your employee has an A1 or E101 certificate issued by their country of residence. The health insurance contribution must be paid every month based on the amount of wages and fringe benefits subject to withholding. The rate of the employer's health insurance contribution changes from year to year.
Information concerning the wages paid and the related employer's contributions must be submitted to the Incomes Register. If you are registered as an employer, you must also notify the Incomes Register if you have not paid any wages during the calendar month. Read more about reporting employer’s contributions to the Incomes Register at incomesregister.fi.
You are treated as a casual employer if you only have one wage earner on the payroll during the year, or if there are a maximum of five wage earners but the length of their employment is shorter than a calendar year. However, even if you are a casual employer, you must still report any paid-out wages and the related employer's contributions to the Incomes Register. You can also choose to enter the register of employers voluntarily as a casual employer. If you register, you have the same obligations as a regular employer.
For more information, see the Tax Administration’s bulletin on the obligations of a foreign employer.
4.2 Non-resident foreign company with no permanent establishment in Finland
If a foreign company does not have a permanent establishment in Finland for income taxation purposes, it does not need to register as an employer. In these circumstances, the employees carry the responsibility of making the prepayments of income tax on their earnings. This only concerns the ones who stay in Finland for longer than six months. However, in certain cases a foreign company must still report its wage payments to the Incomes Register (see Reporting data to the Incomes Register: international situations).
A foreign company can choose to be voluntarily register as an employer in Finland. A company that has voluntarily registered as an employer has the same obligations as a company that has a permanent establishment for the purposes of Finnish income tax.
If registration as an employer is in force, the company must withhold tax on the wages it pays to employees, following the instructions printed on each employee’s tax card. A company registered as an employer must also withhold tax at source on any income paid to non-residents, which is taxable in Finland, such as wage income paid to a leased employee. In such a case, the employee need not take care of their prepayments to the Finnish Tax Administration.
4.3 Employee leasing
A foreign employer can lease an employee coming from outside Finland to work for a service recipient in Finland. If the foreign employer is a non-resident taxpayer with no permanent establishment in Finland, an employee leasing notice must be submitted on the foreign employee and the wages paid to the employee must be reported to the Incomes Register on an earnings payment report. The employee leasing notice can be given on the earnings payment report either in connection with the earnings payment data or separately. However, if Finland has a tax treaty with the employee’s country of residence that prevents Finland from taxing the employee’s wage income, the employee leasing notice or the earnings payment report do not need to be filed.
If the foreign employer has a permanent establishment in Finland or is treated as a resident taxpayer due to its place of effective management in Finland, the employee leasing notice does not need to be filed. However, all wages paid to foreign leased employees must be reported to the Incomes Register on the earnings payment report.
The foreign company must also collect tax at source on the leased employee’s wages or withhold tax on them, if the company has a permanent establishment in Finland or if it is treated as a resident taxpayer due to its place of effective management in Finland. In other cases, the employer is not obligated to collect tax at source or withhold tax. Instead, the employees themselves must pay the taxes to the Tax Administration.
Foreign employers treated as resident taxpayers in Finland and non-resident employers registered in prepayment register must themselves report details on leased employees and the wages paid to them to the Incomes Register. If a non-resident employer has not been registered for prepayment, a representative of the employer must file the reports to the Incomes Register. In circumstances where there is no representative appointed by the employer or the representative does not report the required information, the reporting obligation falls on the employer regardless of whether they are registered for prepayment.
For further guidance on employee leasing and the obligations of the foreign employee-leasing companies, see Leased employees – taxation in Finland. Read more about reporting to the incomes register on the Incomes Register page.
5 Registering as liable for tax on insurance premiums
Insurance companies with an operation in Finland must pay a tax on the insurance premiums agreed with their clients, if the object of insurance is a property located in Finland, an interest related to activities practised in Finland, or other interest in Finland. Sometimes the policyholder is the party liable to pay the tax. For more information on the liability to pay tax on insurance premiums, see the guidance on the tax on insurance premiums.
6 Registering for prepayment register
Companies that conduct business activities or are likely to do so can request to be entered in the prepayment register. There is no mandatory rule that would require a business to have a prepayment registration. If the company is not registered in prepayment register, the party that pays the company nonwage payment or compensation for use must withhold tax on the payment (see Chapter 8 for more details).
Non-resident foreign companies can be registered in the prepayment register if they have a permanent establishment in Finland or if their domicile is in a country that has signed a tax treaty with Finland (§ 25, act on tax prepayments (Ennakkoperintälaki 1118/1996)). Foreign corporate entities treated as resident taxpayers can be registered in the prepayment register in the same way as Finnish companies. For more information, see the Tax Administration’s page How to get a prepayment registration.
The information on whether a company is registered on the prepayment register is public. Customers paying nonwage compensation are required to check whether the payee is on the prepayment register. You can check the registration with the Business Information System’s Company Search feature on ytj.fi.
If a company liable to pay Finnish income tax has the prepayment registration, it carries the responsibility for its income tax payments independently. However, the fact that the company is registered on the prepayment register does not cause income tax liability in Finland. For more information on how prepayment registration affects business operations, see Registration for the prepayment register and its effect on the operation of business.
The Tax Administration can remove a company from the prepayment register if the company neglects its obligations to pay taxes or neglects its duty to report (§ 26, act on tax prepayments (Ennakkoperintälaki 1118/1996)). A company can be removed from the prepayment register if it has not filed its returns on VAT, employer's contributions or income tax, or if the company has not paid its VAT, income tax or prepayments.
If the Tax Administration sends a letter of inquiry for further information on the foreign company's operation in Finland, it must provide the requested information. The company may also be removed from the prepayment register if it does not give a reply to such a letter.
Registration may also be denied or removed based on previous negligence by the company’s managers or by other companies managed by them.
If the company’s activities in Finland end, the company must notify the authorities by filing a Form Y. The Tax Administration will then remove the company from the prepayment register (§ 26, act on tax prepayments (Ennakkoperintälaki 1118/1996)).
Companies that are liable for taxes in Finland must usually make tax prepayments on their taxable profits. The prepayment amount is based on an estimate of the taxable income to be received by the company in the tax year. If the estimate changes, the company can request an adjustment to the prepayment amount. If the paid-in prepayments are not enough to cover the actual income tax liability determined at the end of the year, the company must pay back taxes as well as late-payment interest with relief.
If you are self-employed, you are expected to complete Form Y3 (pdf) and give your estimates of turnover and taxable income for your first year of business on it. Similarly, if you are a partnership, you complete Form Y2 (pdf). Changes must be reported in MyTax (5010, business operators and self-employed individuals, shareholders in a partnership). Corporate entities can request prepayment or changes to it in MyTax and by filing Form 5017e (Tax prepayment request/change request).
For more information on requesting and making prepayments, see the Tax Administration’s page on the subject.
8 Withholding of tax at source on nonwage compensation paid to a foreign company
Foreign companies that are non-resident taxpayers are not obliged to pay income tax, unless they are treated as having a permanent establishment in Finland. However, tax at source must be withheld on nonwage compensation paid to a non-resident foreign company if the work has been performed in Finland. Nonwage compensation (often also called trade income) is the compensation paid for the performance of work, a one-off assignment, or for the rendering of a service. The payer of the compensation is liable to withhold the tax at source. The withholding of tax at source on nonwage compensation comes into question mainly when a non-resident foreign company carries out its business mainly abroad, but the company has temporary, short and individual assignments in Finland.
Payers of compensation do not have to withhold tax at source if
- the foreign company is prepayment-registered in Finland,
- the foreign company is able to present a 0% tax-at-source card to the payer, or
- the foreign company can show other documentation establishing that withholding is not necessary. This means documentation that proves that the foreign company cannot be treated as having a permanent establishment in the prevailing circumstances.
However, when nonwage compensation is paid for building, earthmoving, water construction or other construction, installation, assembly, shipbuilding, transportation or cleaning services, caregiving or medical care services, the recipient of the work must withhold tax at source except if the beneficiary is on the prepayment register or has a tax-at-source card with a 0% rate (§ 10 f, act on the taxation of non-residents' income (Laki rajoitetusti verovelvollisen tulon verottamisesta 627/1978)).
When an invoice is written up, it is permissible to have some sales of goods included in it. The invoice should contain a specification displaying the nonwage compensation on a separate line or on an enclosure to the invoice. Another approach is to issue two separate invoices, one for the goods, the other for the work. If there is no clear indication of the amount of the nonwage compensation, tax at source must be applied on the entire invoice. If the beneficiary of such an invoice is not in the prepayment register, the customer must withhold tax on the part of the nonwage compensation, regardless of the amount of the compensation.
The rate is 13% on payments going to companies that are similar to Finnish limited-liability companies or partnerships. The tax-at-source rate is 35% if the recipient is a self-employed individual (§ 7, act on the taxation of non-residents' income (Laki rajoitetusti verovelvollisen tulon verottamisesta 627/1978)).
If you are self-employed and going to receive income in Finland and need a tax-at-source card, complete Form 5057e (Application for a nonresident taxpayer's tax-at-source card, prepayment calculation, tax card). Enclose with the application Form 6205e (Explanation of business conducted in Finland by self-employed individual).
A foreign corporate entity can request a tax-at-source card by filing Form 6202e (Application for a tax-at-source card for trade income received by a foreign corporation). You must enclose a Trade Register certificate or similar, issued by the authorities of your country and add a translation into English, Finnish or Swedish, as well as a copy of the assignment contract.
For more information on requesting a tax-at-source card and on refunds of tax at source withheld in excess, see the Tax Administration bulletin on the refund of tax withheld at source.
If nonwage compensation is paid to a foreign corporate entity treated as a resident taxpayer in Finland that is not registered in prepayment register, the payer of the income must withhold tax on their payment. In such a case, the withholding rate is 13%.
9 Filing a tax return
9.1 Foreign company treated as non-resident taxpayer
A non-resident foreign company only has to pay tax to Finland on the income it receives from Finland. If the company has a permanent establishment in Finland, the company is liable to pay tax on all income related to the permanent establishment.
Corporate taxpayers must file their income tax return 6U electronically within four months from the end of their accounting period. If a foreign corporate entity views that it does not have a permanent establishment in Finland for the purposes of income taxation, the corporation must enclose Form 80 (Account of local operations - Foreign corporate entity) with their tax return. For instructions on filing tax returns and accounts, see Income tax returns from foreign companies.
Businesses registered as partnerships and self-employed must file their income tax returns by the first days of April the year following the tax calendar year. For more information on filing as a self-employed individual or partnership, see the Tax Administration pages Tax return – the self-employed and Tax return – general and limited partnerships. For more information on income tax filing as a foreign business operator, see the detailed guidance Income taxation of foreign self-employed individuals.
Read more about reporting obligations:
Official decision of the Tax Administration on filing of tax returns and corrections to real estate data (available in Finnish and Swedish, link to Finnish).
The Tax Administration’s decision on information reported on a tax return (available in Finnish and Swedish, link to Finnish).
9.2 Foreign corporate entity treated as resident taxpayer
A foreign corporate entity that is a resident taxpayer in Finland is liable to pay tax to Finland on income received from Finland and from abroad.
Foreign corporate entities treated as resident taxpayers must file their income tax return 6B electronically within four months from the end of their accounting period. For more information on filing tax returns, see Tax return - limited liability companies and cooperative societies.
10 Changes to operations or terminating operations
Companies must let the Finnish Tax Administration know of any significant changes as compared with the time of registration. Such changes may have an impact on the liability to pay VAT and income tax in Finland. Examples include a change of the estimated length of the period of business operation in Finland, new building contract, the inclusion of new kinds of business in the operation, an extension of the company’s stay in Finland, or a change in the company’s taxpayer status from non-resident to resident due to the location of the company’s place of effective management in Finland. Changes must be reported on a notification of changes (Form Y4, Y5 or Y6).
Foreign companies must submit a Y4, Y5 or Y6 notice form in order to let the Finnish Tax Administration know that their register details (business name or contact details, wage payments or VAT taxable business) change or if they go out of business. You must keep filing tax returns until the Tax Administration has removed the company from its registers. In other words, it is not enough just to file the notification of termination – you must wait until you are de-registered before you can stop filing returns.
Foreign companies must also always file an income tax return for their last year of operations. Upon termination, the company must review the amount of prepayments for the last year of operation. The company must provide new address and bank account information abroad in order to pay any tax refunds.
A foreign corporate entity treated as a resident taxpayer must also submit a notification of changes if its place of effective management is no longer located in Finland. The corporate entity can no longer be treated as a resident taxpayer if its place of effective management is not in Finland. If the corporation continues its activities in Finland, and it is considered to have a permanent establishment in Finland, it is treated as a non-resident taxpayer in Finland based on the permanent establishment.
If the country of tax residence of a foreign corporate entity treated as a resident taxpayer in Finland is changed to another country in accordance with Finnish legislation or a tax treaty signed for the avoidance of double taxation, the value of the transferred assets on the exit date (with the undepreciated acquisition cost of the assets deducted from the total value) is considered to be taxable income for the corporate entity, with the exception of assets that are still actually related to the entity’s permanent establishment in Finland. Similarly, if the business activities conducted by a permanent establishment are transferred to another country, or if the foreign corporate entity transfers assets from its permanent establishment in Finland to its head office or another permanent establishment located in another country so that Finland no longer has the right to tax these assets, the value of the assets on the exit date (with their undepreciated acquisition costs deducted from the total value) is treated as the permanent establishment’s taxable income (§ 51 e, act on the taxation of business income (Laki elinkeinotulon verottamisesta 360/1968)). For more information on exit tax, see the Tax Administration’ detailed guidance on the subject (Maastapoistumisverotus) (available in Finnish and Swedish, link to Finnish).