Finland

As a main rule, a company is deemed to be resident on the basis of incorporation. Consequently, a company is deemed to be resident in Finland if it is incorporated (registered) in Finland. 

Additionally, foreign corporate entities that are not incorporated in Finland may still be deemed to be tax residents in Finland. Entities that have been incorporated in a foreign country may be deemed to be tax residents based on their place of effective management (see below).

Place of effective management

Corporate entities whose place of effective management is located in Finland are also considered to be resident taxpayers in Finland. According to the Finnish Tax Administration, the place of effective management is a place where the corporation’s highest-level decisions concerning the daily management are made.

The Finnish Tax Administration has provided detailed guidance on this matter, and the Income Tax Act defines the concept of effective management. A corporate entity’s place of effective management is considered to be in Finland if its board of directors or other body making top-level decisions on daily management is located in Finland. However, when determining whether a place of management exists in Finland, other circumstances relevant to the company’s organisation and business operations are also taken into account.

Permanent establishment (PE)

A PE is, in general, formed in line with the OECD Model Convention.