Tax return of a foreign company and a branch of a foreign company

Information required for the tax return of a foreign company and a branch of a foreign company

A breakdown of the following items is required for a limited company’s tax return, if these are not directly reflected in the reports submitted by the company:

General information about the operation

Notification if the company’s industry has changed during the financial year.
Notification if the company has operations in Åland.
Information if, in the opinion of the company, it has not established a permanent establishment for income tax purposes in Finland.
Notification if the company is not engaged in business activities
Statement if the financial statements comply with International Financial Reporting Standards (IFRS).
Notification if the company is required to prepare transfer pricing documentation.
Notification if a branch or permanent establishment has been incorporated or if the business has been transferred.

Business income

In addition to the information displayed in the financial statements report, the following must be reported in the tax return.

Turnover should be broken down as follows:
- Sales to companies in the same group
- Sales to the main business
- Sales to others
Other operating income
Financial income
- Dividends and surpluses
- Profit shares of mergers
- Other interest and financial income
Reversals of impairment losses
Group grant received
Deductions from provisions

Business expenses

Business expenses must be broken down as follows:

Purchases and changes in inventories
External services directly related to the business, e.g., subcontracting, itemized as follows:
- External services to the head office and affiliates
- External services to others
Salaries broken down as follows:
- Wages and salaries for work done in Finland
- Pension costs of work done in Finland
- Other personnel expenses for work done in Finland
- Expenses related to a Finnish permanent establishment outside of Finland
Depreciation
Impairment of fixed assets
Other operating expenses
- Representation expenses
- Donations made
- Losses on disposal of fixed assets
- Leasing payments
- Impairment of trade receivables
- Other deductible expenses

Financial expenses

The following must be specified for financial expenses for the tax return:

Interest expenses, itemized:
- Sales to the main business
- Group partners
- Interest expenses for associates
- For others
Group support and impairment of receivables
Other financial expenses (loan management, collection costs, exchange rate losses)

Other expenses relevant to the tax return

Group grants received
Additions to provisions
Impairment of assets

Losses on disposal of other fixed assets

Main business information

Turnover of the main business (total activity)
Total main business expenses
The result of the main business
Number of employees in the main business

Assets

Receivables from owners, group companies and holding companies must be reported separately

Liabilities

Liabilities to owners, group companies and associated companies must each be reported separately.
Of the loans, capital loans must be separately itemized

Other information to be provided

If more than half of the owners have changed during the financial year, or in stages over several years, this should be reported on the tax return.

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Meri Väinölä

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Noora Nikkilä