Accounting and legal

Accounting and tax

    Tax regulations in Finland
  1. The standard corporate tax rate in Finland is 20%;
  2. There is no special capital gains tax rate, as capital gains are treated as regular corporate profits;
  3. Capital gains from sale of shares are not taxable if i) the shares are of a subsidiary ii) the selling company owns at least 10% of the subsidiary iii) the shares have been held for at least a year iv) the shares are not of a real estate company v) the subsidiary is located in a country having a tax treaty with Finland;
  4. VAT in Finland is levied at a standard rate of 24%. VAT registration is required for companies exceeding €8,500 in annual revenue .Monthly VAT returns must be filed before the 12th of the following month;
  5. Business losses can be carried forward for 10 years, unless more than 50% of the company’s shares were transferred during or after the loss making year;
  6. Dividends i) paid to EU companies with at least 10% ownership in the distributing company, is tax exempt and ii) paid to non-EU resident companies is subject to a withholding tax of 20%, unless reduced by a tax treaty;
  7. Royalty payments to a non-EU resident company are taxed at 20%, unless reduced by a tax treaty;
  8. Businesses must be audited if they fall under two of the following three criteria i) over €200,000 in annual turnover ii) over €100,000 in assets iii) more than 3 employees;
  9. Real property tax rates vary by district, but is 1% on average;
  10. Corporate tax returns must be filed with the Finnish Tax Administration within four months of the financial year end;
  11. Employers in general contribute about 22% of the total amount of salaries in social security contributions. The contributions include i) 2% for health insurance ii) 17% for pension insurance iii) 1% on the first €1,990,500 and 3% on the excess, for unemployment insurance and iv) 1% for accident insurance;
  12. Employees must also contribute to their social security. Employers are required to withhold from an employee’s gross salary i) 5.5% for employees under 53 years of age (7% otherwise) for pension insurance ii) 1% for unemployment insurance;
  13. Withholding taxes may be reduced through Finland’s double taxation treaties with 70 countries including Australia, China, Singapore, UK and the United States;
  14. Healy Consultants will assist our Clients with i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparation of financial accounting records iv) preparing forecasts, budgets, and sensitivity analysis;
  15. It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.

Legal and compliance

Healy Consultants’ compliance department assists our Clients to fulfill all annual legal and tax obligations.

Staff regulations

  • Probation period may not be longer than 4 months;
  • Weekly overtime work may not exceed 16 hours;
  • Overtime work is paid as an increased rate of salary at i) 50% for the first two hours and ii) 100% thereafter;
  • Employers in general contribute about 22% of the total amount of salaries in social security contributions. The contributions include i) 2% for health insurance ii) 17% for pension insurance iii) 1% on the first €1,990,500 and 3% on the excess, for unemployment insurance and iv) 1% for accident insurance;
  • Employees must also contribute to their social security. Employers are required to withhold from an employee’s gross salary i) 5.5% for employees under 53 years of age (7% otherwise) for pension insurance ii) 1% for unemployment insurance;
  • Employees are entitled to 30 days of annual leave;
  • Maternity leave in Finland is 105 working days, and paternity leave is 18 days.

Reporting regulations

  • Transfer pricing rules follow OECD guidelines. Consequently, companies with i) more than 250 employees ii) more than €50 million in annual turnover and iii) more than €43 million in assets are required to submit all documentation regarding the documentation to the Finnish Tax Administration;
  • Any change in the company board or shareholders registry must be disclosed to the Trade Register.

Company regulations

  • Finnish LLC requires at least 1 shareholder and 2 directors, one of which has to be an EEA resident. The minimum paid up capital for an LLC registration is €2,500;
  • Companies must be registered at the Trade Register within 3 months of signing of the M&AA;
  • The name of an LLC must include the words “osakeyhtiö” or its abbreviation “oy” and the name of a PLC must include the words “julkinen osakeyhtiö” or its abbreviation “oyj”.

Contact us

For additional information on our accounting and legal services in Finland, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Ms. Zhang Yi, directly:
client relationship officer - Zhang Yi