Finland’s tax administration announced that it released an updated version of its guidance (Guidance number VH/3968/00.01.00/2024) aimed at eliminating international double taxation for legal entities on 1 August, 2024.
The instructions apply to situations where an entity generally liable to tax in Finland has income that is also taxable in another state. The guide also includes related legal and taxation practices. However, it does not deal with the refund of taxes paid abroad on an entity’s income.
In Finland, the income of a taxable entity from abroad may be subject to taxation by another country (source country) if the other country has the right to tax the income based on its national law and any applicable income tax treaty.
The updated guidance outlines the implications of the 2023 Finland-France Income Tax Treaty (2023), which has yet to take effect. This new treaty utilises the credit method to eliminate double taxation. The new tax treaty is in contrast to the current 1970 Finland-France Income and Capital Tax Treaty, which employs the exemption method.
