The Finnish Ministry of Finance published a draft government bill on 22 March 2018 on abolishing the personal income source for corporate entities. Under the draft government bill, the Finnish Business Income Tax Act (BITA) would generally apply to the calculation of a corporation’s net operating result. Borenius Attorneys, Taxand Finland, explains the changes proposed to the Finnish corporate tax system.
The BITA’s scope of application would be extended to cover real estate business activities carried out by entities other than corporations as well. The proposed amendments would simplify the calculation of corporations’ taxable income, but for example, income derived from real estate business activities could be classified as business income for foundations.
Key changes
The draft government bill drawn up by the Finnish Ministry of Finance proposes the following key changes:
Discover more: Profound changes proposed to the Finnish corporate tax system
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The Finnish Ministry of Finance has invited interested parties to submit their comments on the draft government bill by the beginning of May. We expect to receive the finalised government bill during the summer. The proposed amendments would enter into force at the beginning of 2019 and would first apply in taxation from the fiscal year 2019 onwards.