Finland is a state in northern Europe, on the border with Russia, Sweden and Norway, and part of the European Union (EU). A highly developed economy, technology, innovation and digital services create a favourable environment for business development. The corporate tax rate is relatively low for the Eurozone (20%). Simplified financial reporting requirements apply to small companies. There are mandatory audit requirements if certain criteria are exceeded.
(From 3 000 EUR)
The calculator allows you to calculate the approximate cost of maintenance of accounting services to support and audit the company.Calculate
Requirements regarding accounting and audit of financial statements are stipulated by the Accounting Act No. 1620/2015, government decrees, general instructions of the Accounts Chamber of Finland under the Ministry of Economy and Employment, EU directives enacted into national law and regulations, and the International Financial Reporting Standards (IFRS).
Financial statements must be prepared in accordance with the Finnish accounting standards (FAS) or in accordance with the International Financial Reporting Standards (IFRS). IFRS are applied by companies whose securities are traded on a regulated market and in order to prepare consolidated financial statements of public-interest entities: listed companies, credit institutions, investment firms, insurance companies and pension funds. IFRS can also be applied by companies whose financial statements are audited by certified auditors.
Small companies can prepare condensed financial statements provided that they meet two of the three criteria during two straight years:
Small and medium-sized enterprises (SMEs) are allowed to apply IFRS provided that their financial statements are audited.
Companies that are not required to apply IFRS approved by the EU must comply with the requirements set by the Finnish generally accepted accounting principles (GAAP).
Financial statements must be prepared for each financial year and must contain:
Financial statements and management report must be in Finnish or Swedish (and in euros).
Requirements regarding audit are stipulated by the Auditing Act (1141/2015), and the International Standard on Auditing (ISA) adopted by the European Commission.
All companies must annually audit their financial statements, except for the companies that in the last completed reporting period and the reporting period immediately preceding it do not meet more than one of the following conditions:
In spite of the fact that a company or private fund is not obliged to appoint an auditor, its articles of association, partnership agreement or regulations can contain provisions about auditing.
Companies must file financial statements with the Trade Register within 4 months after the end of the reporting period.
If a company fails to file financial statements within the prescribed period, the Finnish Patent and Registration Office (PRH) sends a penalty resolution to the person responsible for the company requesting submission of financial statements to PRH within 2 weeks.
If a company fails to file its financial statements within the prescribed period, the Finnish Patent and Registration Office (PRH) imposes a fine on the responsible person. The resolution can be appealed against. The time period allowed for an appeal is 30 days. The amount of the fine depends on income. The maximum amount of the fine is 3 300 EUR.
If a company does not file its financial statements and does not pay fines, PRH can decide to liquidate the company and remove it from the trade register.
If a parent company controls a subsidiary or several subsidiaries, the parent enterprise and its subsidiaries form a group of companies.
A parent enterprise, if it is a limited liability company, limited partnership or general partnership or cooperative, must prepare consolidated financial statements.
Small groups are not required to prepare consolidated financial statements if none of the companies is a public-interest company.
Small enterprise means a reporting unit that does not exceed more than one of the three thresholds on the date of the end of the previous reporting period and the reporting period immediately preceding it:
An entity is also exempt from the obligation to prepare consolidated financial statements if:
A subsidiary is not required to be included in consolidated financial statements if: