A Concise View on Tax Measures of Finland
Finland is one of the largest export markets across the globe. Being a member of the European Union (EU), Finland has a highly industrialized and a largely free-market economy. If you intend to expand your business in Finland, it is imperative to have sufficient knowledge of the latest tax measures there.
Finland has outlined tax measures spanning 2013-2016 that include R&D incentive rates, increase in VAT rates and updates on Corporate Taxation updates.
A brief Glance:
Corporate Tax:
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The government in a March 2012 press release announced that depreciation rates are doubled for some industrial investments until the end of the year 2014.
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The government also introduced an R&D incentive that allows a company to credit employment costs of its personnel engaged in R&D activities against its corporate income tax. The incentive comes into effect from 2013.
Individual Tax:
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Annual adjustments to the tax brackets are suspended for 2013 and 2014;
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For taxable income exceeding EUR 100,000, a new tax bracket is introduced
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For taxpayers with extremely low taxable income, earned income credit against national tax (työtulovähennys) is increased.
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Municipal taxation allowance is increased (current maximum is EUR 2,850);
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Large pensions will be more heavily taxed
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People with inheritances exceeding EUR 1,000,000 will pay more taxes
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Individuals investing in Small and Medium Enterprises (SMEs) can avail of a special tax incentive
Value Added Tax (VAT)
There is a reduction in the VAT rates announced with a one percent increase in the standard.
Doing Business in Finland with the help of an expert
With a state of the art infrastructure, a skillful labor force, viable operating costs, and a highly conducive business ambience, Finland seems to be right place to expand your business to. It is advisable to take the help of an expert business consultant who will exclusively focus on facilitating your international expansion plan. It is prudent to partner with a service provider who will be your problem-solver and who can seamlessly take care of your internal finance, HR, compliance, international financial accounting, SAS 70 compliance, EU VAT rules, and legal functions, while allowing you to focus on your core business. A reliable partner can help you avoid major lapses leading to hefty penalties.
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