Business income tax
Your company’s business form will influence your company’s incomes taxes. If you have a limited liability company or a co-operative, the income tax is paid as a part of your company taxation. In the case of any other company form, your company’s income tax will be paid as part of your personal taxes.
Submit a tax return for income taxes once a year. Income tax is generally paid as a prepaid tax, which is supplemented when necessary.
You can submit a tax return and pay your income taxes in the MyTax service.Opens in a new window.
A limited liability company and co-operative pay income tax on their earnings. The amount for income tax is 20 % of the profits your limited liability company or co-operative makes.
To determine your company’s financial result, subtract deductible expenses and losses from previous years from your taxable income. Taxable income includes, for example, income from the sale of your company’s products and assets. Deductible expenses include expenses linked to the generation of income, such as salaries, rents and purchases related to your business activities.
Your personal income will not affect your company’s or co-operative’s taxation arrangements. In the case of a limited liability company, you can take out money from your company in the form of salaries or dividends, and, in the case of a co-operative, salaries, surplus refunds or interest received. You will pay personal tax on your salary, dividends, surplus refunds and interest received.
If you are self-employed, you pay a personal income tax. The amount of taxes you pay will be based on your business income.
To determine your business income, subtract deductible expenses, and losses from previous years from your taxable income. Taxable income includes, for example, income from the sale of your company’s products and assets. Deductible expenses include expenses linked to the generation of income, such as salaries, rents and purchases related to your business activities.
Your company income will be taxed partly on capital gains and partly on earnings. Capital gains tax is paid at 30% up to a threshold of EUR 30 000. For anything above that the rate is 34%. Taxes on income are progressive, meaning your tax rate will rise as your earned income grows.
If you are engaged in business activities with your spouse, capital gains and earned income shares of company income will be divided between the two of you. Aspects taken into consideration when dividing these shares include the distribution of labour and the net worth of the enterprise.
If you have a general partnership or a limited partnership, your company’s income tax will be divided between you and the other partners. Everyone will pay their own share in their personal taxes. The total amount of taxes paid on income will be based on your company’s financial result.
To determine your company’s financial result, subtract deductible expenses and losses from previous years from your taxable income. Taxable income includes, for example, income from the sale of your company’s products and assets. Deductible expenses include expenses linked to the generation of income, such as salaries, rents and purchases related to your business activities.
You will pay your share of your company’s income tax partly as your capital gain and partly as your income tax. Capital gains tax is paid at 30 % up to a threshold of EUR 30 000. For anything above that the rate is 34 %. Taxes on income are progressive, meaning your tax rate will rise as your earned income grows.
If you are an agricultural entrepreneur, you will pay your income tax as part of your personal taxes. The tax on income for your business activities is based on your company’s income.
To determine your business income, subtract deductible expenses, and losses from previous years from your taxable income. Taxable income includes for example income from the sale of agricultural products. Deductible expenses include expenses linked to the generation of income, such as salaries, rents and purchases related to your agricultural activities.
Your company income will be taxed partly on capital gains and partly on earnings. Capital gains tax is paid at 30 % up to a threshold of EUR 30 000. For anything above that the rate is 34 %. Taxes on income are progressive, meaning your tax rate will rise as your earned income grows.
If you are engaged in agricultural activities with your spouse, capital gains and earned income shares of company income will be divided between the two of you. Aspects taken into consideration when dividing these shares will include your distribution of labour and the net worth of your agricultural activities.
If you take a salary from your limited liability company or co-operative, you will pay personal income tax on it. But you will pay personal capital gains tax on dividends, surplus refunds and interest received. All the salaries paid by your company reduce your company’s profits and at the same time its amount for income tax.
If you are an independent trader or farmer, you may not pay yourself a salary. Instead, you can take money out of company funds for your own personal use. You do not have to pay personal income tax on this money, but nor will it reduce your company’s profits or the amount for income tax payable.
If you have a general partnership or a limited partnership, you may take out money in the form of a salary, money for private use, or both. You will pay personal income tax on your salary, though you need not pay any tax on money taken out for private use. Salary payments reduce the amount for your company’s income tax, though money for private use does not. It is generally irrelevant as regards income tax whether you take funds from your company for salaries, private use or both.
Your company must submit a tax return to the Finnish Tax Administration once a year for taxing of income. List your company’s profits and expenses, assets and debts as well as any other requested information for the past year.
A tax year is usually equivalent to one calendar year. A tax year can also be a financial year that has come to an end during the past calendar year or financial years that have come to an end over the past calendar year.
If your company is a limited liability company or a co-operative, you must submit the tax return within four months of the end of the financial year. Self-employed persons, general partnerships, limited partnerships and agricultural entrepreneurs must submit their tax returns each spring. The deadlines can be found on the vero.fi website.Opens in a new window.
You can submit the tax return electronically in the MyTax serviceOpens in a new window., through your program’s interface or as a file in the ilmoitin.fi serviceOpens in a new window..
If you are a self-employed person or an agricultural entrepreneur or you have a general partnership or a limited partnership, you can also submit the tax return on paper.
Income tax is paid as a prepaid tax. The Finnish Tax Administration determines the amount for your prepaid tax on the basis of your company’s previous tax period’s taxable income. If you are a new entrepreneur, your tax will be based on your own estimation of how large your company’s turnover or taxable income will be during its first financial year.
The Finnish Tax Administration will send you a decision on the prepayment of taxes and payment details. Pay your prepaid tax of your own initiative directly from your bank account or in the MyTax service. When making the payment, use your own tax prepayment reference number.
The 23rd day of the month is a common due date for prepaid tax payments. If you do not pay the tax on time, you will be required to pay interest on the delay.
Monitor your company’s performance and its income. Where necessary, apply for a change to the sum you pay in prepaid tax during the financial year. You can submit the applications in the MyTax service. You can also supplement your prepaid taxes with an additional payment after the tax year has ended. In this way, your company will not have to pay back taxes.