Foreign enterprise in Finland – Rantalainen is at your service
Future is insight – this is Rantalainen`s brand and what it stands for:
- our accounting clients get in addition to accounting, analytic services, which are supportive for business decisions.
- our corporate income tax (“CIT”) clients, who handle their accounting themselves, get proactive services for future tax events.
A foreign enterprise without proper foresight in their international business operations commonly face unexpected occurrences due to the local regulations and practices. Even though the foreign enterprise would not have a Finnish limited liability company (“LTD”) in place, the separate entity approach strives enterprises to focus on the individualization of local operations in the bookkeeping of the head office. Basically, this means that a foreign enterprise having a permanent establishment (“PE”) in Finland shall be treated similarly to the Finnish LTD for the purposes of income taxation.
Among other things, we have implemented a CIT schedule for our cross-border customers to ensure that the mandatory and recommended CIT actions would be taken care of in Finland.
First steps are paying attention on the start-up phase, which include for instance evaluation of the PE and assessment of an arm’s length inter-company pricing model. The taxable status of a foreign enterprise would be crucial to revise annually, if any amendments occurred at the local business operations. In addition, we would pleasantly assist our customers to request binding guidance from the Finnish tax authorities when needed.
The first main question shall be, whether a foreign enterprise could be deemed to have a PE in Finland and if such was constituted, how profits would be attributable to it (when taking into account functional and factual analysis).
There are certain actions to be taken into consideration when approaching the closing date of accounting period. Foreign enterprise’s accounting period closing should be equivalent to the financial year of the head office in the state of residence. It is assumable that these actions would ease the preparation of the CIT return, which must be filed within 4 months after the accounting period closing. Foregoing actions are however depending on the facts and circumstances of each corporation.
The aim of the annual CIT schedule is to know our customers, their needs, and the business activities carried out in Finland, and thereby, we would be able to provide more accurate services at a correct time. We are willing to assist our customers with local accounting and tax advisory services, so you would be able to focus on the actual business operations at your best.
In the long run, it is more flexible – in most cases – to react proactively than retrospectively on the future events.
Rantalainen is a Finnish accounting and advisory entity employing more than 1000 specialists all over Finland. We provide whole range of services both for national and international companies within the areas of bookkeeping, payroll services, tax compliance and consulting services e.g., for VAT, company income taxation, but also mergers and acquisitions. We additionally provide tailored services including CFO & HR services as well as IT-solutions in financials.
If you have any additional questions related to starting up a business in Finland, or your ongoing Finnish business activities from the accounting and/or taxation viewpoint, or if you post employees to Finland and require the mandatory employer representative services, please get in touch.
Tommi Vilppola
Tax Manager, International Tax
M&A and Tax
+358 10 3216 733
Simon Prätorius
Manager, International Affairs
Rantalainen Helsinki
+358 10 321 6767
simon.pratorius@rantalainen.fi
Merja Hämäläinen
Senior Advisor, International Affairs, VAT
Rantalainen Helsinki
+358 10 321 6573
