Income Tax Returns in Finland

• More information on deadlines in English
  
• More information on applying for postponement in Finnish: operators of trade and business, corporate taxpayers

Income Tax Returns for Corporate Taxpayers

Corporate taxpayers submit their income tax returns after their financial statement is ready, within four months of the end of the fiscal year. If the company’s fiscal year has ended on 31.12.2015, the income tax return must be at the Finnish Tax Administration by 2.5.2016. This means that the financial statement, auditing and taxes for the last fiscal year must be taken care of before submitting the income tax return. Income tax returns are submitted with form 6B.

Before submitting the income tax return, the corporate taxpayer should check the amount of withholding tax paid in advance. The corporate taxpayer can supplement the earlier payment in order to meet the amount of income tax to be paid, or apply for a reduction in withholding tax, which is done at the same time as submitting the income tax return.

In addition, the following documents and information are needed:

• A report on transfer pricing documentation
• A breakdown on shareholder loans (the annual notification for shareholder loans was done by 24.2.2016)
• Minutes from the annual general meeting with the decision on profit distribution (if it has been decided that the company shares dividends or the company has distributable funds)
  
  • Minutes are not required if the financial statement has been confirmed and form 6B and form 63 have been submitted.
• Information on the financial statement. Most of the information required in form 6B should already be found on the financial statement, but here are a few things that require more information:
  • Tax-deductible expenses and the expenses they are based on:
    
    • Total amount of representation expenses must be presented, as well as the tax-deductible portion (50 %).
      
    • Total amount of donations made, as well as the tax deductible portion
      
    • Total amount of capital loss from property shares (forms 71A and 71B), as well as their tax deductible portion
• Non tax-deductible expenses
  
  • direct taxes
    
  • tax increase
    
  • fines and fine-natured payments
    
  • decrease in value of property shares
    
  • compulsory reservations
• Profit / Loss in each source of income respectively
  
  • business activity
    
  • personal

For more information and a detailed guide on filling form 6B correctly in English please visit the Finnish Tax Administration’s site.

Income Tax Returns for Individuals

Pre-completed income tax returns should be carefully inspected, as an individual taxpayer might be eligible for tax-deductions that have not been taken into account by the Finnish Tax Administration. The Administration does some of the deductions ex officio, but taxpayers must demand for some of the tax deductions themselves. Taxpayers are not required to submit receipts or other documents related to the tax deductions filed, but they must be retained for further clarification, if needed.

Tax-deductions done ex officio include:

• work-related expenses up to 620 euros
  
• earned income allowance
  
• pension income allowance

Tax-deductions that must be demanded include:

• Commuting costs
  

Commutes that enable the taxpayer to apply for tax-deductions can be e.g., regular commute, weekend trips home, commute to secondary place of work, business trips and commutes related to a certain sector of work.

No deductions are given if the actual cost doesn’t exceed 750 euros, and expenses for regular commutes can be deducted to a maximum of 7000 euros.

• Household expenses

Deductions based on household expenses can be made up to 2400 euros. The taxpayer’s own liability is 100 euros. In order to be eligible for making this tax deduction, the household work done must be provided by either a company or an operator in trade or business with a valid business ID. The amount of tax deduction that can be made is 45 % of work inclusive of VAT. This means that to be eligible for the full amount of the tax deduction, household work done must cost approx. 5 555 euros (more information available in Finnish).

• Work-related expenses that exceed 620 euros
  

These expenses can include e.g. vocational literature, and work-related housing expenses up to 250 euros per month (more information available in Finnish).

• Interest from a loan meant for earning income
  

These interest expenses can come from e.g. loans used to acquire investment property. This deduction is made from capital income.

• Tax-deduction based on 65 % of interest on a mortgage
  

The deduction is made from capital income.

• Source of income loss
  

Loss produced can only be deducted within its respective source (personal, business and agriculture)

• Deficit in capital income
  

In case there is no capital income, the taxpayer can apply for a tax credit based on the deficit in capital income against income tax on earned income. The credit is 30 % of the deficit in capital income, up to a maximum of 1 400 euros, increased by 400 euros by each child the taxpayer has, but to a maximum of 800 euros. The so called “child increase” must be demanded, and can only be demanded by one parent (more information available in Finnish).

• Shareholder loan payments
  

Shareholder loan payments can be classified as work-related expenses, if the payments have been made within five years of raising the loan. The deduction is made from capital income (more information available in Finnish).

For a more information and a detailed guide on filling out a pre-completed income tax return in English, please visit the Finnish Tax Administration’s site.