November 2021
Proposals to amend the Accounting Act – new liabilities for foreign companies
On 18 November, 2021, the Finnish Government proposed amendments (HE 221/2021 vp) to the Accounting Act which, when passed into law, will extend the liabilities of foreign companies. Such companies will be liable to keep accounts either in accordance with the home country legislation or the Finnish Accounting Act (depending on the home country of the foreign entity), if they carry out business activities in Finland, or if they perform the business activities elsewhere but their effective management of such activities is located in Finland.
The proposed new liabilities will enable the Finnish tax authorities to determine each foreign company’s tax obligations, based on its financial statements and other accounting material, if the foreign company has a permanent establishment in Finland or if the effective management of its activities is located in Finland. Any failure to comply with these requirements may lead to charges of accounting offences under Chapter 30 of the Criminal Code.
These amendments will come into force immediately after approval by the Finnish Parliament. The new rules will apply to accounting periods that start on or after the effective date of the new legislation.
The proposed new liabilities will enable the Finnish tax authorities to determine each foreign company’s tax obligations, based on its financial statements and other accounting material, if the foreign company has a permanent establishment in Finland or if the effective management of its activities is located in Finland. Any failure to comply with these requirements may lead to charges of accounting offences under Chapter 30 of the Criminal Code.
These amendments will come into force immediately after approval by the Finnish Parliament. The new rules will apply to accounting periods that start on or after the effective date of the new legislation.
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The information in this site has been prepared for general informational purposes only and it should not be used as a substitute for consultation with a professional tax, legal or other competent advisor. While we have made every attempt to ensure that the information contained in this site has been obtained from reliable sources, Effektiivi Oy is not responsible for any errors or omissions, or for the results obtained from the use of this information.
The information in this site has been prepared for general informational purposes only and it should not be used as a substitute for consultation with a professional tax, legal or other competent advisor. While we have made every attempt to ensure that the information contained in this site has been obtained from reliable sources, Effektiivi Oy is not responsible for any errors or omissions, or for the results obtained from the use of this information.
