Finland Country Profile taxation trade issues

Finland

TAXES - ACCOUNTING

Corporate tax

Tax rate for resident companies	26%

Tax rate on long-term capital gains	The tax rate on capital gains is 26%.

System governing groups of companies and dividends paid by subsidiaries to their parent companies	Dividends paid to non - resident companies: Withholding tax of 28% or 0% (infringement foreseen by international agreements). Dividends paid to resident companies : Withholding tax of 0%.

Tax rate on branches	Branches are subject to general corporate taxation rules.

Income tax

Fiscal year

The fiscal year begins on January 1st and ends on December 31st of the same year.

Income tax rate

The tax rates are as follows:

In EUR	In %
12.000 - 15.400	10.5
15.400 - 20.500	15.0
20.500 - 32.500	20.5
32.100 - 56.900	26.5
> 55.800	33.5

There are two additional taxes: a municipal income tax (from 16 to 21%) and a church tax (from 1 to 2.25%). The wealth tax was abolished from January 1st 2006.
Married persons are taxed separately.

VAT rates

Standard rates	22%

Reduced rates	A 17% rate applies to basic foodstuff and animal feed. An 8% rate applies to passenger transport, books, medicines, accommodation services and entry fees to cultural events. Exports are zero-rated. Exemptions include the sale or rental of immovable property, financial and insurance services, healthcare and education.

Other important taxes

Name of tax	Rate
Inheritance and gift tax	10 to 16%
Car tax	8 to 20%
Municipal tax on real property	0.5% to 1%

Accounting

Introduction
The accounting of the Scandinavian countries (Denmark, Finland, Iceland, Norway and Sweden) have a common accounting system thanks to their closely related history and culture.
The relation between the accounting and the tax system is the same as in Germany.

General accounting principles
Intangible assets can be booked in the Balance sheet or in expenses in the profit and loss account (choice of the company).
Physical fixed assets must be estimated at the original or production cost.
Current assets have to appear at the lower cost and value of the market.
Stocks are estimated at the weighed average cost or by the FIFO method.

Obligations and publications
Law refers to the notion of "good accounting method" as regards the methods of companies for the elaboration of financial status.
All the companies of capital have to send a copy of their annual report to the legal authorities of the country. This annual report must contain a profit and loss account, a balance sheet and an annual report.

Certification and auditing
The audit is compulsory.

Professionals and representative organizations
The auditors: they are represented by two professional organisations recognized by the State: the kht-yhdistys-Förening ( CGR) who are the authorized auditors and the HTM-TILINTARKASTAJA ( HTM) who are the approved auditors.

Useful links

Finnish Tax Administration
Finnish Ministry of Finance
Finnish customs
Finnish Government

Last modified in January 2007