Corporate Tax Rate in Finland and Taxation of Dividends

27.03.2013

Today, the Finnish government published a report on the government’s decisions on spending limits and state finances, including certain decisions on taxation.

One of the major decisions made by government concerns the Finnish corporate tax rate, which currently stands at a rate of 24,5 %. According to the newly published report, the government intends to decrease the corporate tax rate to 20 % starting from the beginning of 2014. If the decision becomes law, the Finnish corporate tax rate would be one of the lowest in Europe.

Taking into consideration the business environment, relatively stable economy and ease of doing business in Finland, the decrease of the tax rate should make Finland a considerable candidate for foreign businesses when considering which country to set up office in.

It may further be mentioned that dividends from Finnish companies can, in general, under certain circumstances be paid to parent entities within the EU without the obligation to pay source tax in Finland. In addition to that, Finland has concluded tax treaties with most countries to avoid double taxation of dividends and limiting the amount of Finnish source tax on dividends to 0-15 %, depending on the size of the investment made. The tax treaties also generally exclude source tax on certain types of income from Finnish sources (royalties, etc.).

Attorneys at law MK-Law Ltd offers foreign corporations and entrepreneurs a full range of legal services, covering, among other things, company formation and administration services, as well as tax consultation and advice in tax planning.

Inquiries and further information:

Jan Långstedt, Partner (Tel: +358400538022; email: jan.langstedt@mklaw.fi)