Finland Corporate Tax - Guide for International Expansion

Are you considering expanding your business to Finland? Understanding the Finnish corporate tax system is crucial for making informed decisions about your international operations.

Finland offers a competitive business environment with a stable tax framework, making it an attractive destination for international companies. Whether you're planning to establish a subsidiary, acquire a Finnish company, or simply understand your tax obligations, this comprehensive guide will help you navigate Finland's corporate tax landscape. Plus, we'll show you how Wise Business can streamline your financial operations and cross-border payments in Finland.

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This publication is provided for general information purposes and does not constitute legal, tax, or other professional advice from Wise Payments Limited, its subsidiaries or affiliates, and it is not intended as a substitute for obtaining business advice from a tax advisor or any other professional.

Finland Corporate tax rate in 2025

The corporate income tax rate in Finland is 20% for all companies, regardless of their size or profit level. This flat rate has been in effect since 2014 and applies to both resident and non-resident companies on their Finnish-sourced income.¹

Finland's 20% corporate tax rate is competitive within the European Union, where the average corporate tax rate stands at approximately 21.27%. This rate is significantly lower than many other developed economies and reflects Finland's commitment to maintaining an attractive business environment for both domestic and international investors.²

Finnish resident companies are subject to corporate income tax on their worldwide income, whilst non-resident companies are only taxed on income derived from Finnish sources. A company is considered a Finnish tax resident if it is incorporated in Finland or if its place of effective management is located in Finland.¹

The Finnish tax year typically follows the calendar year, running from 1 January to 31 December, though companies can apply for a different accounting period if needed for business reasons.³

Read more about Corporate Tax Planning best practices

How to pay corporate tax in Finland

Finnish companies must file their corporate income tax returns and make payments through the Finnish Tax Administration's online system called OmaVero. This digital platform is mandatory for all businesses operating in Finland and provides a comprehensive solution for tax compliance.⁴

Corporate income tax in Finland is paid in euros (EUR). If your company's functional currency is not the euro, all amounts must be converted to euros using the exchange rates published by the European Central Bank or other acceptable rates recognised by the Finnish Tax Administration.⁵

The corporate income tax return must be filed by the end of the fourth month following the end of the tax year. For companies following the calendar year, this means the deadline is 30 April. However, if you use an authorised tax advisor or accounting firm to prepare your return, you may receive an automatic extension until the end of May.⁶

Finnish companies are required to make advance payments of corporate income tax during the tax year. These advance payments, based on the estimated taxable income, are typically due on the 23rd of each month, including September and December. The number of instalments depends on the company's specific tax assessment.⁶

If the final tax liability exceeds the advance payments made, the remaining amount must be paid by the filing deadline. Conversely, if advance payments exceed the final tax liability, the excess amount will be refunded with interest.⁷

Late payment of corporate income tax incurs interest charges at a rate determined by the Finnish Tax Administration, which for 2025 is 11.5% annually.⁸ Additionally, late filing of tax returns may result in a late-filing penalty of €100, or a punitive tax increase with a minimum of €150, calculated as 0.5% to 10% of the increased income, with no maximum limit.⁹

Let's calculate the annual tax liability for a company with a turnover of €1.5 million. Assuming a profit margin of 10%, the taxable profit would be €150,000.

At Finland's corporate tax rate of 20%, the annual tax due would be:

€150,000 × 20% = €30,000

If this company fails to pay on time and incurs a 30-day delay with a 11.5% annual interest rate, the additional cost would be:

€30,000 × 11.5% × (30/365) = approximately €283.56

Therefore, the total amount owed would be €30,283.56.

For international businesses expanding to Finland, having the right financial infrastructure is essential. Wise Business offers multi-currency accounts that allow you to hold and manage euros alongside other currencies, making it easier to handle your Finnish tax obligations and day-to-day business expenses. With competitive exchange rates and transparent fees, Wise Business can help you save money on currency conversions and international transfers whilst maintaining compliance with Finnish tax requirements.

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Tax Compliance in Finland

Some helpful tips to keep your company fully compliant with Finnish tax regulations:¹⁰

• Register for taxes early: Register with the Finnish Tax Administration (Vero) to avoid penalties after incorporating your company. This ensures you can legally operate and fulfil obligations for corporate income tax, VAT, and other applicable taxes.
• Understand VAT obligations: The standard VAT rate in Finland is 24%, with reduced rates for specific goods and services. Businesses must charge the correct VAT rate and file returns on time. Regularly reviewing VAT records and staying updated on regulation changes can prevent costly penalties.
• Organize financial records: Keep invoices, receipts, and bank statements well-documented throughout the year. Using accounting software can simplify corporate tax prep, allow real-time tracking of transactions, and ease annual filings.

International Expansion to Finland

If you are exploring overseas expansion for your business, you should definitely consider Finland. As a member of the European Union and the Euro area, it provides access to a market of over 500 million consumers. The country’s population of 5.6 million enjoys high purchasing power, with a GDP per capita of €40,700, well above the EU average. Finland contributes 1.6% to the EU’s total GDP, and real GDP is expected to grow by 1.0% in 2025 and 1.3% in 2026.¹¹

The nation is known for its skilled, educated, and multilingual workforce. Only 10% of young adults lack an upper secondary qualification, and more than 50% of the total population is employed, with an employment rate of 76.7% for those aged 20 to 64.¹² Finland also invests heavily in research and development, approximately 3% of its GDP, exceeding the OECD average.¹³

Finland ranks highly in global competitiveness and sustainability, placing 8th in the 2022 IMD World Competitiveness Ranking and 1st in the UN Sustainable Development Report.¹⁴ The country’s infrastructure supports international business, with 19.8 million air passengers in 2024 and air freight of 184,303 tons, reflecting strong global connectivity.¹⁵ EU membership has also strengthened Finland’s trade, with exports to EU countries accounting for 58.1% of total goods and imports from EU countries at 70.9%.¹⁶

To start a business in Finland, you have to:¹⁷

1. Develop a business idea and plan: Define your product, market, and strategy.
2. Select a business name and location: Choose a unique name and a suitable location.
3. Arrange financing: Secure funds for startup and operations.
4. Choose a company type: Decide on the legal structure for your business.
5. Register with authorities: Notify the Trade Register and Tax Administration (Vero) to get a Business ID (Y-tunnus).
6. Open a business bank account: Set up the company’s bank account.

Understanding Finland’s corporate tax system is essential for expansion. Companies should monitor the Finnish corporate tax rate, look for the A-listed banksin this region, and determine how to comply with regional economic laws to scale their profits.

Discover the top 5 best Corporate Tax softwares

Incorporation of Business in Finland

To incorporate a business in Finland, you must register with the Finnish Trade Register and the Tax Administration (Vero). Once registered, the company receives a Business ID (Y-tunnus), which is required for all legal, tax, and banking activities.

Moreover, the following information is necessary to incorporate a company in Finland:¹⁸

• Company name: A unique name for your Finnish company.
• Type of company: Choose the appropriate legal structure (see below).
• Registered office: A physical address in Finland for official correspondence.
• Directors: Individuals appointed to manage the company on behalf of the shareholders.
• Shareholders: The owners of the company.
• Articles of association: The foundational legal document that outlines the company’s rules and governance.

Companies expanding internationally should consult international corporate tax advisors to ensure compliance with Finnish corporate tax law. Understanding the Finnish taxation policies is crucial when evaluating the benefits of operating in Finland versus zero corporate tax.

Business Entities in Finland

Finland offers several types of business entities suitable for different purposes:¹⁹

• Private Limited Company (Oy): The most common structure for small and medium-sized enterprises. Shareholders have limited liability, and a minimum of one director is required.
• Public Limited Company (Oyj): Suitable for businesses planning to list on the stock exchange. It requires at least two directors, and there is no limit to the number of shareholders.
• General Partnership (Ay): Composed of two or more partners who share liability and management responsibilities.
• Limited Partnership (Ky): This type of partnership includes general partners with unlimited liability and limited partners whose liability is restricted to their investment.

Under Finnish corporate law, at least one director of a limited liability company (Osakeyhtiö, Oy) must reside in the European Economic Area (EEA).²⁰ This ensures local accountability for compliance with regulations.

International corporate tax best practices

Managing corporate tax obligations across multiple jurisdictions requires a strategic approach that balances compliance with efficiency. Here are essential practices for international businesses operating in Finland and other countries.

Maintain robust compliance frameworks across all jurisdictions where you operate. This includes understanding local tax laws, filing requirements, and payment deadlines in each country. Regular consultation with local tax advisors ensures you stay current with changing regulations and avoid costly penalties.

Leverage double taxation agreements (DTAs) to minimise your overall tax burden. Finland has comprehensive double taxation treaties with over 80 countries, which can significantly reduce withholding taxes on dividends, royalties, and interest payments between treaty countries. Understanding these agreements is crucial for optimising your international tax position.

Implement strong transfer pricing documentation and policies. With the OECD's Base Erosion and Profit Shifting (BEPS) initiatives and Finland's adoption of these standards, maintaining arm's length pricing between related entities is more important than ever. Proper documentation protects against tax authority challenges and ensures compliance with international standards.

Consider the impact of Finland's implementation of the EU's Anti-Tax Avoidance Directive (ATAD), which includes rules on controlled foreign companies, interest deductibility limitations, and general anti-abuse provisions. These measures affect how international structures are taxed and require careful planning to ensure compliance.

Take the complexity out of international expansion with Wise Business

Researching corporate tax is a crucial step when expanding your business into a new country. The next step is setting up the financial infrastructure to handle the complexities of operating across borders, from managing multi-currency cash flow to mitigating FX risk.

The Wise Business account provides the financial tools to make your international expansion to Finland efficient and simple. It's the one account for managing your money globally.

With a Wise Business account, you can:

• Pay suppliers and initial fees: Pay suppliers, global payroll, and one-off incorporation costs in the local currency.

• Get paid like a local: Use local account details for 8+ major currencies to easily receive payments from customers or investors.

• Manage your money across borders: Hold and exchange 40+ currencies in one account, always with the mid-market exchange rate and low, transparent fees.

• Streamline your accounting: Integrate with tools like Xero or QuickBooks to simplify tracking your company's international finances.

• Empower your team: Provide multi-user access for your finance team and issue expense cards for international spending.

Wise is designed to support every step of your journey, from paying your first registration fee to receiving international payments and managing your global treasury.

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FAQs - Corporate tax in Finland

Who is liable for corporate tax in Finland?

All Finnish resident companies are liable for corporate income tax on their worldwide income. A company is considered a Finnish tax resident if it's incorporated in Finland or if its place of effective management is located in Finland. Non-resident companies are only liable for tax on their Finnish-source income, such as income from a permanent establishment or certain types of Finnish-source investment income.

Are there any tax incentives for businesses in Finland?

Finland offers several tax incentives to encourage business investment and innovation. A significant incentive is the research and development (R&D) tax deduction, which provides a general additional deduction of 50% and a supplementary deduction of 45% on qualifying R&D expenses, with specific caps for each. The country also provides accelerated depreciation for certain business assets and has special provisions for start-up companies. Finland also participates in various EU state aid schemes that can provide additional support for specific industries or regions.

What is the tax treatment of dividends in Finland?

Dividends received by Finnish companies from other Finnish companies are generally exempt from corporate income tax to avoid double taxation. Dividends from foreign companies may be exempt under Finland's participation exemption rules if the Finnish company holds at least 10% of the foreign company's shares for a continuous period of at least one year. Dividends paid by Finnish companies to shareholders are subject to withholding tax, though rates may be reduced under applicable double taxation treaties.

What is the process for registering for corporate tax in Finland?

Companies must register for corporate income tax as part of their business registration process with the Finnish Patent and Registration Office (PRH). This registration automatically includes enrollment with the Finnish Tax Administration for tax purposes. Foreign companies establishing a permanent establishment in Finland must register separately for tax purposes within one month of commencing business activities. The registration process can be completed online through the Finnish Business Information System (YTJ).

What are the common pitfalls to avoid regarding corporate tax in Finland?

The most common pitfalls include failing to make adequate advance tax payments, which can result in significant interest charges, and misunderstanding the rules around deductible expenses, particularly for entertainment and representation costs. Many companies also struggle with transfer pricing documentation requirements when dealing with related party transactions. Additionally, failing to properly classify workers as employees versus contractors can lead to unexpected tax and social security obligations. Finally, companies often underestimate the importance of maintaining proper accounting records in accordance with Finnish accounting standards, which can complicate tax compliance and increase the risk of penalties.

Sources used in this article:

1. PwC Tax Summaries: Finland Corporate Income Taxes
2. Tax Foundation: Corporate Tax Rates by Country 2024
3. PwC Tax Summaries: Finland Tax Administration
4. Vero.fi: Tax Return for Companies
5. ECB: Euro Reference Exchange Rates
6. Vero.fi: Corporate Tax Deadlines
7. Vero.fi: Your Tax Return and Assessment
8. Vero.fi: Interest on Late Payments
9. Vero.fi: Late Filing Penalty
10. GLZ.fi: Preparing Your Business for Tax Season
11. European Union: About Finland
12. OECD: Finland Education Profile
13. World Bank: Finland R&D Expenditure
14. U.S. Trade.gov: Finland Investment Climate
15. Statistics Finland: GDP
16. EU Commission: Finland's EU Membership
17. Business Finland: How to Set Up a Business
18. Suomi.fi: Limited Liability Company Guide
19. Tetra Consultants: 7 Types of Companies in Finland
20. Adcount: Company Formation in Finland

Sources last checked 15/09/2025