Find out essential information about taxation in Finland – the Nordic Hub of the European Union
Finland provides an ideal business environment and ecosystem in European market and Euro zone in a sustainable manner. Finland has one of the most competitive corporate tax rate in EU and OECD: 20%.
On this page we provide you with the most essential information on taxation when expanding your business into the European Union (EU).
If you are establishing a company in Finland:
Good to know about taxation in the EU:
The EU consists of 27 EU countries which make a single market. The goods and services are traded freely across borders in the EU. There are generally aligned VAT rules in place in the EU countries. Still some details of the VAT rules may vary among the EU countries. Please find more information on the EU here (europa.eu).
- Value added tax (VAT) on sale of goods and services is charged on all stages of the supply chain. VAT is generally charged on domestic sale in an EU country. VAT is not charged on goods and services in cross-border sale (called intra-Community supply) to a VAT registered company in another EU country.
- The import VAT is charged on purchase of goods from outside the EU to an EU country. Buyer must also pay VAT on services bought from outside of the EU. Please find more information about VAT taxation (europa.eu).
Good to know about taxation in Finland:
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1
VAT registration
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Estimate whether you will have a permanent establishment in Finland.
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You can register for VAT when submitting your start-up notification or separately. VAT registration procedure takes 3-4 weeks after you submit the start-up notification.
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Register for VAT for a Finnish subsidiary or branch. When you have a Finnish subsidiary or branch, you need to use a Finnish tax representative.
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2
Customs registration
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When you start exporting or importing goods, see Customs' guide for new exporter or importer.
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Importer and exporter needs EORI number for Custom procedure. To get EORI number you have to register for Customs.
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3
Corporate income tax (CIT)
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Finland has one of the most competitive corporate tax rate in EU and OECD: 20%
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Estimate whether you will have a permanent establishment (PE) in Finland in income taxation. PE arises with different rules between CIT and VAT.
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In case of PE or subsidiary, prepare financial statements and file corporate income tax returns annually.
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Movable non-current assets: 25%; Buildings: 4%, 7% or 20%; Other depreciation: usually 10 years or below straight line.
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Depreciation of machinery and equipment may be doubled for tax years 2020-2025 (depreciation percentage 50%).
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Utilize tax incentive: Super R&D deduction. In addition to normal deduction (100%) on R&D costs, an extra R&D deduction of 150% is available for tax years 2022-2027 on certain criteria.
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4
Employer checklist
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Make sure your employees have work permits.
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If you pay salaries on a regular basis, register to the Employer Register.
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Withhold tax and health insurance contributions from the employees' wage or salary and remit them to the Tax Administration. The amount of tax withheld is based on the personal tax card or tax-at-source card of the employee.
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Key personnel may be eligible to the Tax card of a key person.
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Report earned income details to the Incomes Register within five days from the payment.