Back BORENIUS > LEGAL ALERTS > NEW AMENDMENTS TO THE FINNISH ACCOUNTING ACT LEGAL ALERTS / 23 NOV 2021 New Amendments to the Finnish Accounting Act The Finnish Government proposed legislative amendments to the Finnish Accounting Act on 18 November 2021. The amendments would extend the scope of the obligation to keep accounting records to foreign corporate entities whose place of effective management or permanent establishment is located in Finland. The new rules would also concern foreign estates, investment funds and trusts. Background The purpose of the proposed amendments is to enable the Finnish authorities to obtain information on the financial statements and other accounting material for the taxation of foreign corporate entities whose place of effective management or permanent establishment is in Finland. Key changes The proposed changes can be summarised as follows: Foreign entities in the EEA can continue to rely on the financial statements prepared in accordance with the legislation of their home country. This means that no separate Finnish GAAP accounts are required. However, in practice many foreign entities maintain Finnish GAAP accounts on their Finnish operations in order to facilitate the tax reporting. Foreign entities outside the EEA can continue to rely on the financial statements prepared in accordance with the legislation of their home country, assuming that these financial statements are prepared in accordance with the IFRS or corresponding accounting standards. Foreign entities outside the EEA that do not prepare financial statements or prepare them by insufficient standards must prepare Finnish GAAP financial statements as follows: entities whose place of effective management is in Finland for tax purposes must prepare Finnish GAAP financial statements for all of their activities; and entities whose permanent establishment is in Finland for tax purposes must prepare Finnish GAAP financial statements for their activities in Finland. To enhance the fulfilment of the proposed obligations, entities could face criminal liability in Finland if they do not comply with their obligation to keep accounting records. Next steps The amendments are planned to enter into force as soon as possible after the Parliament has approved them. They will apply to financial periods that begin on or after the effective date of the amendments. The old rules will continue to apply to financial periods that begin before the effective date. We will continue to monitor any developments as the proposal proceeds towards implementation. If you have any questions regarding the matter, please feel free to contact any of Borenius’ attorneys listed in this alert or those with whom you usually work. Additional information Heikki Wahlroos Partner Helsinki Mikko Vesikivi Associate Helsinki LATEST LEGAL ALERTS New Amendments to the Finnish Accounting Act LEGAL ALERTS / 23 NOV 2021 New Rules on Pre-Marketing of Alternative Investment Funds Effective as of 1 December LEGAL ALERTS / 23 NOV 2021 Landmark Market Court Decision Strengthens Invalidity Attack as Defence Against Preliminary Injunctions LEGAL ALERTS / 18 NOV 2021 SUBSCRIBE TO OUR NEWSLETTER Borenius Attorneys Ltd ETELÄESPLANADI 2 FI-00130 HELSINKI, FINLAND VAT FI01034608 info@borenius.com Tel. +358 20 713 33 Fax +358 20 713 3499 Borenius Helsinki Borenius Tampere Borenius London Borenius New York Borenius St. Petersburg © Borenius Attorneys Ltd 2021 Legal disclaimer • Privacy Notice • General terms and conditions • Supplier Code of Conduct