Accountancy Practices in Finland:
Accounting & Notifications to Authorities
This is a brief guide only, and does not constitute legal advice. Always check the latest rules & regulations with the relevant authorities.
Finnish Accountancy in Brief
All persons and entities engaged in business, including self-employed professionals, are obliged to keep
books.
The management of an enterprise is responsible for its accounting, regardless of whether accounting is carried out by an external firm. The obligation to keep books starts when founding the enterprise. The obligation to audit is dependent on conditions and thresholds. Financial statements must be compiled for each accounting period and submitted to the Trade Register for publication.
Companies have self-assessed and annual notification obligations to authorities. In addition, employer companies submit information on paid wages to their employment pension and accident insurance companies, and apply for reimbursement of occupational healthcare expenses. Most notifications are submitted electronically. See:
- Finnish Tax Administration: Businesses & Corporations
- Suomi.fi > Employer’s responsibilities
Financial Statements
A financial statement explains business activities and the events/details which made up company profit/loss during an accounting period. Companies must submit a financial statement to the Trade Register within 4 months of the end of an accounting period. In brief, the financial statement comprises:
- Profit and loss account
- Balance sheet
- Funds statement
- Balance sheet book
- Balance sheet specifications
- Report of activities
- Supplementary attachments
Obligation to Audit
A corporation or foundation is obliged to appoint an auditor and carry out audits in accordance with the Auditing Act and elsewhere in the law.
Thresholds: Unless otherwise provided by law, there is no obligation to appoint an auditor for a corporation where not more than one of the following conditions were met in both the past completed financial year and the financial year immediately preceding it:
- The balance sheet total exceeds €100,000 euros
- Net sales or comparable revenue exceeds €200,000 euros
- The average number of employees exceeds three
Source: Finnish Association of Auditors , Auditing Act 2015
See also: Finnish & International Auditing Firms
Self-Assessed Taxes
Tax returns for self-assessed taxes must be submitted online, for example at the Tax Administration's e-Service MyTax
Self-assessed taxes such as VAT and employers' contributions (ex. taxes withheld on payment of wages, health insurance contributions) must be filed with and paid to the Tax Administration. Taxpayers can file returns electronically through MyTax or through other networks. Many businesses file returns electronically through their accounting software.
- Many types of returns must be e-filed: It is mandatory for VAT taxpayers, employers and others liable to self-assessment to file returns electronically.
- Corrections: Taxpayers can correct errors on previously filed returns online if the errors have little or no economic impact.
- Tax periods & thresholds: The standard reporting period for self-assessed taxes is the calendar month, though thresholds exist which allow longer reporting periods. Thresholds depend on sales per year or similar annual revenues.
The threshold for reporting by calendar quarter is €100,000.
The threshold for reporting by calendar year is €30,000. - Late payment charges: A 45-day grace period has been introduced - you can continue to make corrections during 45 days after the due date without late payment charges. Punitive tax for late payment is now maximum 50% of the tax to be debited.
- VAT on a cash basis: Companies with maximum €500,000 in turnover have the option to account for their VAT on a cash basis. This offers small businesses a way to improve liquidity.
- Further Information & Instructions: Finnish Tax Administration
Annual Notifications to the Tax Administration
Nearly all annual notifications should be submitted electronically, though exceptions exist and some may still be submitted on paper. Some of the main notifications include:
Annual Information Return
Each employer, or comparable payor, must submit an annual information return to the Tax Administration with details of paid wages and certain other payments. Annual information returns are submitted once a year, usually by the end of January in the year following the payment.
Information returns must be submitted electronically if five or more beneficiaries receive payments. Information and instructions are available at the Finnish Tax Administration
The Incomes Register
Payors must report wages, employer's contributions and other earned income information to the Incomes Register.
Submissions to the Incomes Register may be made:
- Directly
- Via the Palkka.fi e-service
- Read more about the Incomes Register at the Finnish Tax Administration
Tax Returns
Companies must submit tax returns disclosing information for the past tax year, which is determined by the company's accounting period. Most companies and organisations are expected to complete a tax return without prompting.
Information on tax returns for each form of corporate entity is available at the Finnish Tax Administration
Tax Return Submission Dates:
Employers or comparable payors must report once a year with January being the most common reporting month. When wages are being reported it is the calendar year of payment that matters, not the calendar year during which the work was done. The same rule also applies to other types of payments.
Self-Employed: The deadline is printed in the pre-completed tax return form sent by the Tax Administration.
Additional annual notifications include:
- Annual notification of dividend payments
- Shareholder loans from limited liability companies to natural persons
- VAT recapitulative statement of intra-Community sales of goods and services
- Employment pension insurance
- Accident and group life assurance in accident insurance company
- Applying for occupational health care reimbursement
- Intrastat declarations to the Customs
- Notifications of amendment to the Trade Register and Tax Administration
Further information on annual notifications and submission dates:
- Finnish Tax Administration
- Suomi.fi > Employer’s responsibilities
Related Links
Links to other sites are direct to the relevant page, where possible
