The sale of goods or merchandise by a foreign individual or corporation to a Finnish resident or domiciled buyer does not, as such, create a tax liability for the seller. Taxes related to imports, such as customs duties and value-added tax, are dealt with by the importer, who is generally the customer or the customer's representative. Because Finland is part of the European Union there is no customs procedures in trade between EU countries. Value added tax is not paid anymore along the customs procedures. For information about appointing a representative for value-added tax purposes, see Section F.8, page 58.


The tax levied on branches of foreign companies in Finland is the same as that imposed on limited liability companies, except that branches of foreign corporations are taxed on net worth invested in Finland at a rate of 1% a year. Most of Finland's tax treaties, however, exempt foreign branches from this tax. Branch remittances of profits are not subject to final withholding tax at source.


A sales subsidiary is treated for tax purposes as an ordinary Finnish corporation.

Dividends paid to non-resident shareholders, excluding stock dividends, are subject to a 28% withholding tax unless an applicable double taxation treaty provides otherwise. As a member of European Union Finland does not impose any withholding tax on dividends which are paid to a shareholder resident in another EU member state when the recipient owns at least 25 % of the share capital or at least 10 % of the voting power in the Finnish company.

The withholding tax rate for royalties is 28%, unless a treaty provides a lower rate.

Normally, interest paid to a non-resident is not subject to final withholding tax at source. However, the Finnish authorities can deem a part of a loan to a subsidiary of a foreign enterprise to be equity capital, deny the interest deduction and impose a final tax at a 28% rate, unless a treaty provides a lower rate. Although this action may be considered to be discriminatory, it occurs very rarely. Further, a specific clause in an income tax treaty prevents this kind of discrimination.

Service fees and lease payments are not subject to withholding tax at source.


The taxation of portfolio income (dividends and interest) received by non-residents is discussed in the preceding section, Income from Subsidiaries in Finland.


Finland does not have special tax rules for foreign companies with headquarters in Finland. Because a company's residence is determined based on registration in the Finnish Trade Registry, the fact that a foreign company's management is located in Finland is not a basis for regarding the company as resident. However, it may constitute a basis for claiming a permanent establishment in Finland.

The content of this article is intended to provide a general information on the subject matter. It is therefore not a substitute for specialist advice.