What should I know about business taxation?

The type of company you have determines business taxation in Finland. The company’s profit and net assets form the amount of tax the company has to pay. If you have incurred losses, it will be deducted from the profit of the coming financial years before the taxes will be calculated for those years. By subtracting the company’s loans from its assets, you get the company’s net assets. Only if the company has a good result after wages are subtracted, the company type will matter.

Earnings of a private entrepreneur are taxed as both capital income and earner income. Net assets determine the proportion of the capital income to be taxed. Your bookkeeper can advise you on whether you should request capital income taxation for a certain proportion.

In limited and general partnerships, the result is taxed by dividing the profit and net assets between the partners. The compensation received by silent partners in limited partnerships is taxed as capital income.

Limited liability companies pay corporate tax, which is levied from the company’s result. Corporations pay corporate tax from their taxable income and deductible expenditures according to the 20 percent tax rate.

When a company’s turnover exceeds 10,000 euros, the company needs to pay value-added tax (VAT). If the turnover is between 10,000 euros and 30,000 euros, the company might be eligible for a tax relief.

For most matters regarding taxation, you can request an advance ruling from the Tax Administration. You can apply for changes to your advance tax once the taxation has ended. You can apply for changes to the taxation within five years from when the taxation ended.

A company has to pay excise duty on the consumption or use of certain products such as electricity/fuels, alcoholic beverages/beverage containers, tobacco, waste, sweets, ice cream and soft drinks. Excise duties are collected on products manufactured in Finland as well as those imported into Finland. These duties are levied by the Finnish Customs.