Taxes in Finland: New Tax Benefits for Foreign Companies
The new tax incentives are for all companies operating in Finland, both domestic and international and do not constitute state aid under the EU’s definition, explain the Ecovis experts in Finland.
One of the new tax incentives encourages the share-based commitment of employees. It is not limited to start-ups, but applies to all non-listed companies. When non-listed limited liability companies issue shares to employees in Finland, the subscription price may be lower than the market value of the shares. If the subscription price is the share’s mathematical value, an individual employee who buys such shares will not be treated as having received a taxable benefit.
150% Tax Deduction for Joint R&D Projects
Companies conducting R&D activity with a genuine research organisation meet the criteria for a tax deduction in Finland. The new tax law came into effect in January 2021 and gives companies a 150% tax deduction for joint R&D projects from 2021-2025.
If the actual R&D work is performed by a sub-contracted party (university/research institute etc.), the deduction is 50% on top of the existing deduction, which is 100%. The minimum threshold for tax deduction of costs is EUR 10,000/fiscal year, with a maximum of EUR 1,000,000. This means that the actual deduction is between EUR 5,000 – 500,000 per fiscal year.
Suomi.fi e-Authorisations
The Finnish authorities are modernising their electronic systems. The "KATSO" service will be replaced by Suomi.fi e-identification and e-authorisations. The authorities in Finland use "KATSO" as an identification and authorisation service for companies. The "KATSO" services will cease to operate on 30 April 2021. E-authorisation is an even more secure solution that can not only be used by government services, but also by the private sector. With Suomi.fi e-authorisations, private persons, companies, and organisations can authorise someone else to act on their behalf. A mandate is an electronic power of attorney, the details of which are entered in the authorisation register.
For further information please contact:
Jaana Palomäki, Managing Partner, ECOVIS SGO Finland Ltd, Helsinki, Finland
Email: jaana.palomaki@ecovis.fi
Pertti Kivinen, Senior Partner, ECOVIS SGO Finland Ltd, Helsinki, Finland
Email: pertti.kivinen@ecovis.fi
Ecovis is a leading global consulting firm with its origins in Continental Europe. It has almost 8,500 people operating in nearly 80 countries. Its consulting focus and core competencies lie in the areas of tax consultation, accounting, auditing and legal advice.
The particular strength of Ecovis is the combination of personal advice at a local level with the general expertise of an international and interdisciplinary network of professionals. Every Ecovis office can rely on qualified specialists in the back offices as well as on the specific industrial or national know-how of all the Ecovis experts worldwide. This diversified expertise provides clients with effective support, especially in the fields of international transactions and investments – from preparation in the client’s home country to support in the target country.
In its consulting work Ecovis concentrates mainly on mid-sized firms. Both nationally and internationally, its one-stop-shop concept ensures all-round support in legal, fiscal, managerial and administrative issues.
The name Ecovis, a combination of the terms economy and vision, expresses both its international character and its focus on the future and growth.
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ECOVIS AG Steuerberatungsgesellschaft*
Telefon: +49 (89) 5898-266
E-Mail: gudrun.bergdolt@ecovis.com
