Taxation of foreign companies in Finland on the basis of place of effective management

A foreign company with its place of effective management in Finland is liable to tax for its world-wide income in Finland regardless of the country in which the it was established. The double taxation is eliminated through tax treaties.

A company’s place of effective management is considered to be in Finland if its Board of Directors or other body, making decisions that affect the core of the business, is located in Finland. However, also other circumstances relating to the company’s organisation and business operations are taken into account.

if the board meetings where the significant decisions are made remotely, the assessment of the place of effective management is based on the location where the participants have joined the meeting.  If the board members, the main office, and the executive managers work in different states, the primary significance is given to the place where the company’s board meetings are held.