Credit calculator for foreign tax at source

You can use the credit calculator for foreign tax at source to determine the amount of creditable tax starting from tax year 2017.

Credit calculator for foreign tax at source

What is the calculator for?

You can use the calculator when you have received dividends, interest income, royalties or business income from a permanent establishment from outside Finland. You cannot use the calculator to determine the amount of creditable tax for other types of income.

Please note that the calculator can only give a rough estimate of the creditable amount.

What information do I need for the calculation?

You need the following information to use the calculator:

• tax year
• tax on the income source payable to Finland (public broadcasting tax and income tax for the income source)
• income from the income source taxable in Finland (financial result minus loss from previous years)
• source country for the income
• income category
• amount of tax paid abroad
• gross income received from abroad (income from which no income tax has been deducted)
• income from abroad with expenses for the production of income deducted
• share of ownership.

The information you enter in the calculator is not saved.

Enter the amounts correctly

Give the amounts in euros. Do not enter spaces between the numbers. Do not enter more than two decimals. Place a comma between the euros and the cents. For example, if the amount is one thousand euros and 25 cents, enter: 1000,25.

How is the amount of tax credit calculated?

If you have received the income from a country with which Finland has a tax treaty, the tax treaty states whether Finland must eliminate double taxation with the credit method or the exemption method. The credit method is the most common.

The tax treaties do not define the calculation procedures utilised in these methods. Each country determines their own calculation procedure.

The Finnish procedure is described in detail in the act on the elimination of international double taxation (Laki kansainvälisen kaksinkertaisen verotuksen poistamisesta 1552/1995). The maximum amount of credit that can be granted is the amount of tax that would be imposed on the income in Finland. The maximum credit is calculated separately for each income source and each income type.

If the amount of tax paid abroad is less than the maximum credit, the full amount of tax paid abroad is deducted from the Finnish taxes, proportionate to the taxes. If the amount of tax paid abroad is more than the maximum credit, only the maximum amount of credit can be deducted from the Finnish tax for the tax year. The amount exceeding the maximum credit can be carried over to the following five tax years as unused credit.

Tax paid to the source country cannot be credited in a tax year when the income source has generated a loss or has not generated any taxable income due to losses carried over from previous years. The tax may be creditable in the tax assessment of the following tax years, if the company receives income taxed abroad in the following years and taxable income is generated for the company in Finland.

Tax paid to the source country may not be creditable at all if the income is exempt from tax according to Finnish legislation (e.g. tax-exempt dividends).

Further information about the elimination of double taxation