Finland Tax Deductions

1. Corporate Income Tax (CIT) Deductions:

• Business Expenses:
  • Ordinary and necessary business expenses are generally deductible. This includes:
  • Salaries and wages.
  • Rent and utilities.
  • Office supplies.
  • Marketing and advertising costs.
  • Travel expenses (within reasonable limits).
• It is vital to maintain detailed records with proper documentation.

• Depreciation of Assets:
  • Depreciation of tangible and intangible assets is deductible.
  • The Finnish Tax Administration (Vero Skatt) sets depreciation rates and methods. It is very important to see the current rules from the Vero Skatt.
  • Maintain detailed records of asset acquisition and depreciation calculations.

• Interest Expenses:
  • Interest expenses on business loans are generally deductible, provided they are incurred for business purposes.
  • Thin capitalization rules may apply, limiting the deductibility of interest paid to related parties.
  • It is very important to keep all loan agreements.
• Bad Debts:
  • Bad debts can be deducted if they are proven to be irrecoverable.
  • Adequate documentation is required to support the claim.
• Research and Development (R&D) Expenses:
  • R&D expenses may be deductible, particularly if they contribute to the Finnish economy.
  • It is very important to follow the Finnish Tax Administration guidance on this matter.
• Contributions to Approved Pension Funds:
  • Employers' contributions to approved pension funds are deductible.
• Donations to Approved Charitable Organizations:
  • Donations to approved charitable organizations within Finland may be deductible.

2. Personal Income Tax (PIT) Deductions:

• Commuting Expenses:
  • Expenses related to commuting to and from work may be deductible.
• Interest on Housing Loans:
  • Interest paid on housing loans may be deductible, with certain limitations.
• Donations:
  • Donations to approved charities.
• Household Deduction:
  • Expenses relating to household work.
    Rules regarding this deduction are changing in 2025.
• Pension Contributions:
  • Contributions to approved pension plans.

Important Considerations for Foreign Investors:

• Documentation:
  • Maintain accurate and complete records of all expenses.
  • Documentation is essential to support your deductions.
  • Compliance with Vero Skatt Regulations:
  • Stay updated on the latest regulations and guidelines issued by the Vero Skatt.
• Tax Treaties:
  • Familiarize yourself with the relevant double taxation treaty between Finland and your home country.
• Professional Advice:
  • Seek professional tax advice from experts in Finland to ensure compliance and maximize your deductions.
• Finnish Tax Administration (Vero Skatt) Guidelines:
  • It is very important to keep up to date with the guidelines published by the Vero Skatt.

Key Takeaway: