70 Claim for eliminating double taxation, instructions for completing the form, 2020

Submit Form 70 to claim credit for foreign taxes in your Finnish income taxation. The form can be e-filed as an attachment to your tax return for the year (in MyTax or through other electronic channels). If you have paid taxes to foreign countries during the tax year, fill in the amounts in the appropriate fields. In addition, if taxes were paid to foreign countries relating to earlier tax years and this has not been credited previously (due to a low amount of the income tax payable to Finland (so that the foreign tax was so high that it could not be subtracted from the income tax to Finland)), you can fill in the appropriate space on this form to demand credit.

The form (with further information) is available on the ‘Forms’ page

Enclose documentation with this form, indicating how much tax was paid to the foreign country, when and how it was paid, and what the basis for the foreign taxes has been.

If you want to provide additional information relating to the credit being claimed, you can enclose a free-text letter. Additional information written in free text is needed in many situations – for example, if your corporation has received interest income or royalty income from sources in another EU country, and tax has been withheld at source. Indicate the legal entity form of the payer of interest or royalties, and the percentage of direct ownership in that legal entity that your corporation holds.

Further information: the Directive on interest and royalties (2003/49/EY).

If income was received from a Controlled foreign company (CFC) or from a permanent establishment in a foreign country, you must additionally enclose Form 74 (for the CFC) or Form 75 (permanent establishment).

For more information on how new tax rules on sources of income will affect the previous years’ credits for foreign taxes, see section 5.1 of the “guidance on source-of-income rules for dividing income taxes of certain corporate entities” – “Eräiden yhteisöjen tulolähdejaon poistaminen.

Credit may be given for foreign-paid taxes for earlier years

If you have not yet received credit for taxes paid to foreign countries in earlier tax years, you can demand credit for them, as well.

You can only submit this form if such credit has not been given previously because the tax payable to Finland has been lower than the foreign-paid tax subject to crediting.

If, on the other hand, it would have been possible to give you credit for the foreign tax already in the year when you paid it, but your company did not file a claim for credit at that time, you cannot submit this form. In this case, your corporation must submit a claim for adjustment for the tax year for which it had paid the foreign tax.

If the foreign tax could not be credited previously, during the correct tax year, you must complete Form 70 in the usual way for the 2020 tax year, giving details for the foreign taxes relating to 2020. When completing your income tax return for the 2020 tax year, enclose a free-text account containing information on any foreign taxes for earlier years that remain uncredited. However, that enclosure is not necessary if you already submitted the relevant information on the foreign taxes during the year concerned.

If it would have been possible to give you credit for the foreign tax during the correct tax year but your corporation failed to submit information on it and did not demand credit, you must submit a claim for adjustment.

Your free-text account and your claim for adjustment must both contain the following:

  • The amount of income
  • The expenses relating to the income
  • The amount of tax that credit is claimed for
  • The name of the source country for the income, i.e. the country from which income was received
  • The date when you paid the foreign tax, and the name of that tax (in Finnish and either in the local language or in English)
  • The category of the income, such as dividends, royalty or interest, etc.
  • The withholding rate set out by the provisions of the tax treaty
  • The conversion rate for the foreign currency, if the income and the tax are not expressed in euros
  • If applicable, an account explaining the circumstances of a fictive credit

Detailed instructions

Total taxes that should be credited

Enter the total of all the taxes for which you demand credit during the tax year. You must include the part of the taxes that cannot be credited during the tax year due to the maximum amounts set out by the provisions of the act on the elimination of international double taxation (Laki kansainvälisen kaksinkertaisen verotuksen poistamisesta 1552/1995). The Tax Administration performs the calculations necessary for determining the part that can be credited this year. The remainder will be accounted for during the future years. It will be necessary for you to submit an additional request during the future year or years.

However, if the foreign country and Finland have signed a tax treaty, the maximum amount to be credited can only be an amount determined by the taxing rights of the country of source. If you submit a demand for crediting an amount that goes over this limit, the Tax Administration may impose a punitive tax increase.

This space must be filled in if you are submitting information on new taxes that should be credited, i.e. you demand credit for taxes that were not reported to the Tax Administration before.

Do not fill in this space if you already informed the Tax Administration of all the foreign taxes that should be credited (either during the 2017 tax year or later, because the necessary information is already stored in the Tax Administration’s database).

If you submit Form 70 on paper and you have completed several forms, you should only enter the total amount on just one of your paper forms.

I demand to receive credit for the taxes reported for earlier years that are creditable but have not been credited before

Tick the “yes” box as appropriate.

If either in 2017, or during a later year, you already informed the Tax Administration on these taxes, and you are not demanding credit now for any new taxes (that you have not informed the Tax Administration previously of), you should not fill in the other spaces on Form 70. The Tax Administration will process the information you give here, combining it with your previously submitted reporting.

You cannot demand previous years’ taxes that still remain uncredited during a tax year when your corporation must pay income tax to Finland on foreign-sourced income.

Country code of the country of source

Identify the country from which the income was received by its country code.

Date when foreign tax was paid (ddmmyyyy)

Enter the date when your corporation paid the foreign tax.

Name of the tax to be credited

Give the name of the foreign tax you paid (in Finnish and either in the local language or in English).

Income category

These boxes are for the proper classification of the income (for example, dividends, interest, royalties, income derived from immovable property, capital gains received for the selling of assets/property, or business income).

Withholding rate based on tax treaty

Enter the percentage rate of withholding as laid down in the tax treaty between Finland and the country where the income is sourced, having looked up the proper rate in the treaty article that concerns the category of the income. If Finland and the country have no tax treaty, leave the field blank.

Exchange rate

Enter the rate used when converting the foreign-sourced income into euros. The rate should be the exchange rate that was valid on the date when you received the income.

Amount of income (including paid taxes)

Enter the gross income received from the country without subtracting the tax paid to that country, and without subtracting any expenses relating to the income.

Expenses relating to the income

Enter the appropriate expenses for the production of income, for the maintenance of the income, and interest; these expenses are tax-deductible in Finland.

Amount that should be credited

Enter the part of the tax you paid to the foreign country that your corporation claims credit for when its Finnish tax assessment is processed. Transfer the sum total of the different foreign taxes, from the spaces where you had entered them, to this space, field no 551. Include the part of the tax that goes over the maximum amount set out by the act on elimination of international double taxation (Laki kansainvälisen kaksinkertaisen verotuksen poistamisesta 1552/1995). The Tax Administration performs the calculations necessary for determining the part that can be credited this year. The remainder will be accounted for during the future years. It will be necessary for you to submit an additional request during the future year or years. However, if the foreign country and Finland have signed a tax treaty, the maximum amount to be credited can only be an amount determined by the taxing rights of the country of source. We recommend that you make a check in order to ascertain that the foreign-paid tax had been imposed in accordance with the tax treaty with Finland. You cannot demand credit in excess of the country’s taxing rights as they have been set out by the tax treaty. If you submit a demand for crediting an amount that goes over this limit, the Tax Administration may impose a punitive tax increase.

The calculation for the maximum amount to be credited will be made in accordance with the following rules *):

  • The calculation is based on the sources of income concerned.
  • No higher credit can be given than the amount that Finnish tax rules would require as the tax to be imposed for the income concerned.
  • In the same way, no higher credit can be given than the tax payable to Finland on the income derived from the same source of income. For example, if the source of income has resulted in a loss and as a result, no taxes to Finland are payable on that source of income, there can be no crediting for such tax paid to a foreign country.
  • The amount remaining un-credited can be deducted from the taxes that relate to the same source of income during five upcoming tax years if the taxpayer claims deduction. Unused credits are processed in chronological order, taking account of the maximum permissible amount to be credited.
  • Finland will only give credit for a tax that has been imposed in accordance with the provisions of the applicable tax treaty. If the country imposed a tax higher than that set out in the treaty, your corporation must submit a claim to the tax authorities of that country in order to demand refund of the excess amount.

*) The Finnish act on elimination of international double taxation (Laki kansainvälisen kaksinkertaisen verotuksen poistamisesta 1552/1995) and the tax treaties for the avoidance of double taxation between Finland and other countries.

Tax that should be credited

It is only possible for Finnish tax authorities to give credit for foreign-paid taxes when the paid amount has been a final tax, or when an advance tax has been paid that matches the final tax. Check the appropriate box.

If the amount of the final tax that you already paid to the foreign country should change, or if you claimed credit for a foreign advance tax that turns out to be not in line with the final tax that it was intended to match, you must inform the Tax Administration of the new amounts.

The tax treaty assumes fictive credit

Some of Finland’s tax treaties contain provisions allowing taxpayers to claim credit for taxes that the source country has not collected. If credit is given, it is called a fictive credit. You should only fill in the “Amount of foreign taxes paid” with an amount that you actually paid. If fictive credit is allowable, you should include in the “Amount that should be credited”. In this case, tick the box for “The tax treaty assumes fictive credit”.

Tax paid to foreign jurisdictions due to a hybrid mismatch arrangement

This section is only for corporate entities that have participated in a hybrid mismatch arrangement and paid foreign taxes. If you have done so, you must additionally submit Form 82, “Account of cross-border hybrid arrangements”.

Country code of the country of source

Identify the country from which the income was received by its country code.

Date of payment (ddmmyyyy)

Enter the date when your corporation paid the foreign tax.

Name of the tax to be credited (in Finnish, in the language of the source country or in English)

Give the name of the foreign tax you paid (in Finnish and either in the local language or in English).

Net income received from a foreign country

Enter the net amount of income from foreign sources. Please note that the amount to enter in this field should be the gross income minus any third-party payment that must be subtracted from it. This means that you can adjust the gross income only by subtracting a payment to a third party, if any. Do not subtract any other expenses. This is how you arrive at the net taxable income for purposes of Finnish taxation.

Amount of foreign taxes paid

Enter the amount of tax that was paid to foreign countries.

The relative portion of foreign tax on the net income taxed in Finland

Compute this ratio by first dividing the net taxable income in Finland by the gross income. Then multiply the result by the tax withheld at source by the foreign country.

Net income from a foreign country (as you had calculated)
/Gross income from a foreign country
× the tax withheld at source in a foreign country 
= tax subject to credit

The above formula results in the portion representing the creditable part of the foreign tax that was withheld at source.

Amount that should be credited

Calculate the credit that you claim and enter it in the “Total taxes that should be credited” line. Please note that this credit cannot accumulate as an unused credit that could be carried forward to future years.