Financial statement with zero income

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biz_it
Posts: 117
Joined: Thu May 15, 2014 4:31 am

Financial statement with zero income

Post by biz_it » Wed Aug 15, 2018 6:50 pm

Hi,

A question from my friend who started a business last year. I did not have any answer so I am posting here.

"I registered a company and have been working on a product. It is not finished yet and I have not earned anything during the past one year. Do I still have to file financial statement if my income was zero

Is there any template available or do I have to do through an accountant. It seems like they charge hundreds of euros for a simple zero income financial statement. Please advise what is the easiest and cheapest way to file financial statement"

I am not an expert in Finnish taxation so would appreciate some tips and hints

Regards
UZ


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Financial statement with zero income

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betelgeuse
Posts: 2912
Joined: Thu Aug 29, 2013 1:24 am

Re: Financial statement with zero income

Post by betelgeuse » Wed Aug 15, 2018 10:32 pm

biz_it wrote:
Wed Aug 15, 2018 6:50 pm
"I registered a company and have been working on a product. It is not finished yet and I have not earned anything during the past one year. Do I still have to file financial statement if my income was zero
Yes, a return has to be filed every year. Even if there is no revenue, it's possible to have costs and file a tax return with a loss on it.
biz_it wrote:
Wed Aug 15, 2018 6:50 pm
Is there any template available or do I have to do through an accountant. It seems like they charge hundreds of euros for a simple zero income financial statement. Please advise what is the easiest and cheapest way to file financial statement"

The cheapest way is to do it yourself (assuming low value assigned to one's own work) and file it online.
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biz_it
Posts: 117
Joined: Thu May 15, 2014 4:31 am

Re: Financial statement with zero income

Post by biz_it » Thu Aug 16, 2018 2:22 am

Thanks for the reply. Is there any specific Finnish financial template or can any online template for financial statement be used?
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Kössi K
Posts: 108
Joined: Wed Jan 14, 2015 7:06 pm

Re: Financial statement with zero income

Post by Kössi K » Thu Aug 16, 2018 7:13 pm

He started the business & registered it already last year but hasn't returned his taxation forms back to verohallinto or vero.fi yet??
Has he not received any forms/tax filing forms from Verohallinto in mail? He should have. At least this is how it works for a Finnish entrepreneur (even for the simplest form of toiminimi and using single-entry bookkeeping). If there are any differences with others here, that I'm not aware of, or if I've misunderstood the original question asked, do correct me/this information.
Basically, business operators or self-employed (toiminimi) do not have to draw up specifically financial statements, (unless large turnover or over 10 employees, doesn't sound like it would apply to your friend - see the 1st link below), but they all do have to submit tax return forms, on a specific timetable.

Quoted from vero.fi:
"In general, corporate taxpayers must complete their tax returns within 4 months after the closing date of their accounting period and their tax assessment process will continue up to the date when 10 months have passed after the end of the month when the accounting period has closed."

Have your friend take a careful look through these pages:
https://www.vero.fi/en/businesses-and-c ... ax-period/
https://www.vero.fi/en/businesses-and-c ... _business/

Does he have toiminimi? Generally their tax year is 1.1. - 31.12, same as many other company types.
and in February:
- Business consortia receive their income tax return envelopes (Form 6A with enclosures).
- Self-employed individuals receive their income tax return envelopes (Form 5 with enclosures). <- toiminimi

After that, in April, this year April 3rd: He/she needs to file their taxes for their last financial year, either on paper using the specific form that Verohallinto has sent them in February, or online (same form, and you can log in with e.g. Katso login, that needs to be applied for separately, or if you are self-employed you can use those logins or your personal online banking codes):
- Last date to file the income tax return of self-employed individuals, businesses and sole proprietorships including its enclosures
------------------------------------

https://www.vero.fi/en/businesses-and-c ... ligations/
Quote from this page: "Tax return: All types of companies:
- Limited liability companies and cooperatives submit a tax return within 4 months of the end of the financial year. The tax return must be submitted electronically, for instance in MyTax.
- Business operators and self-employed persons, general partnerships and limited partnerships submit a business tax return in the spring. A tax return must always be submitted, even if the business had not operated during the financial year." (As pointed out above by betelgeuse.)
--------------------------------------
Here's another quote from that first link, about the Financial year that is the basis for your taxation and filing taxes. Since you were asking these questions for your friend, I very much doubt that he'd be keeping double-entry bookkeeping (but that might save him in this case, depending on first day of business, becaues if he is using single-entry and if he is self-employed person (toiminimi), he is now very late for filing taxes for last year, when he started his business.)

How long is the first financial year?

When business operations begin, the financial year may be longer or shorter than 12 months. In the case of double-entry bookkeeping, the financial year may be a 12-month period other than the calendar year. For single-entry bookkeeping, the maximum length of the financial year is always 12 months.
The first financial year begins on the day you set up a business. The financial year is usually 12 months. However, the maximum length of the financial year is 18 months. For business operators and self-employed persons who have single-entry bookkeeping, the financial year is always a calendar year.
----------------------------
So, your friend really should go visit his local tax office to sort this out asap, as it would sound based at least on what little info you gave and so I''m above assuming he registered his company as a new company based in Finland, that your friend's tax return has not been filed in time. And no, "I didn't know." is not an acceptable excuse for him, if he actually has registered a business. My guess is, they'll give him more info about how to do things, and see if there are any repercussions/fees due.
***********************************************************************************************
NOTE:
IF your friend's company was registered as a foreign company here, according to vero.fi,"Corporate entities of all forms, set up under foreign laws or statutes, registered in their countries of establishment and tax residence, are referred to as 'foreign companies"--" Under § 9.1.2, Income Tax Act, they are regarded as Finnish tax nonresidents.

National legal rules governing foreigners' liability to tax are found in § 9, § 10 and § 13a, Income Tax Act (TVL), and in § 83, Act on Assessment Procedure (laki verotusmenettelystä). Because they are regarded as nonresidents, foreign businesses only must pay Finnish income tax on their income received from Finnish sources. Examples of such income include the operation of a trade, the operation of a business enterprise in this country.
However, if you are treated as having a permanent establishment in Finland, you must pay tax on all the income that can be attributed to that permanent establishment (PE)."

If this is the case, he might be in luck in this situation, see https://www.vero.fi/en/detailed-guidanc ... -business/ . I don't know anything about those setups (of having a foreign company here), so can't comment much. But in case that applies to your friend, and he was indeed registered as a foreign company instead, see the above link for info.
Joha mie sanoi, vaikken mittää virkkant.


phuongmon
Posts: 11
Joined: Sat Jun 09, 2012 5:55 pm
Location: Helsinki,Finland

Re: Financial statement with zero income

Post by phuongmon » Wed Jan 16, 2019 12:48 pm

Kössi K wrote:
Thu Aug 16, 2018 7:13 pm
He started the business & registered it already last year but hasn't returned his taxation forms back to verohallinto or vero.fi yet??
Has he not received any forms/tax filing forms from Verohallinto in mail? He should have. At least this is how it works for a Finnish entrepreneur (even for the simplest form of toiminimi and using single-entry bookkeeping). If there are any differences with others here, that I'm not aware of, or if I've misunderstood the original question asked, do correct me/this information.
Basically, business operators or self-employed (toiminimi) do not have to draw up specifically financial statements, (unless large turnover or over 10 employees, doesn't sound like it would apply to your friend - see the 1st link below), but they all do have to submit tax return forms, on a specific timetable.

Quoted from vero.fi:
"In general, corporate taxpayers must complete their tax returns within 4 months after the closing date of their accounting period and their tax assessment process will continue up to the date when 10 months have passed after the end of the month when the accounting period has closed."

Have your friend take a careful look through these pages:
https://www.vero.fi/en/businesses-and-c ... ax-period/
https://www.vero.fi/en/businesses-and-c ... _business/

Does he have toiminimi? Generally their tax year is 1.1. - 31.12, same as many other company types.
and in February:
- Business consortia receive their income tax return envelopes (Form 6A with enclosures).
- Self-employed individuals receive their income tax return envelopes (Form 5 with enclosures). <- toiminimi

After that, in April, this year April 3rd: He/she needs to file their taxes for their last financial year, either on paper using the specific form that Verohallinto has sent them in February, or online (same form, and you can log in with e.g. Katso login, that needs to be applied for separately, or if you are self-employed you can use those logins or your personal online banking codes):
- Last date to file the income tax return of self-employed individuals, businesses and sole proprietorships including its enclosures
------------------------------------

https://www.vero.fi/en/businesses-and-c ... ligations/
Quote from this page: "Tax return: All types of companies:
- Limited liability companies and cooperatives submit a tax return within 4 months of the end of the financial year. The tax return must be submitted electronically, for instance in MyTax.
- Business operators and self-employed persons, general partnerships and limited partnerships submit a business tax return in the spring. A tax return must always be submitted, even if the business had not operated during the financial year." (As pointed out above by betelgeuse.)
--------------------------------------
Here's another quote from that first link, about the Financial year that is the basis for your taxation and filing taxes. Since you were asking these questions for your friend, I very much doubt that he'd be keeping double-entry bookkeeping (but that might save him in this case, depending on first day of business, becaues if he is using single-entry and if he is self-employed person (toiminimi), he is now very late for filing taxes for last year, when he started his business.)

How long is the first financial year?

When business operations begin, the financial year may be longer or shorter than 12 months. In the case of double-entry bookkeeping, the financial year may be a 12-month period other than the calendar year. For single-entry bookkeeping, the maximum length of the financial year is always 12 months.
The first financial year begins on the day you set up a business. The financial year is usually 12 months. However, the maximum length of the financial year is 18 months. For business operators and self-employed persons who have single-entry bookkeeping, the financial year is always a calendar year.
----------------------------
So, your friend really should go visit his local tax office to sort this out asap, as it would sound based at least on what little info you gave and so I''m above assuming he registered his company as a new company based in Finland, that your friend's tax return has not been filed in time. And no, "I didn't know." is not an acceptable excuse for him, if he actually has registered a business. My guess is, they'll give him more info about how to do things, and see if there are any repercussions/fees due.
***********************************************************************************************
NOTE:
IF your friend's company was registered as a foreign company here, according to vero.fi,"Corporate entities of all forms, set up under foreign laws or statutes, registered in their countries of establishment and tax residence, are referred to as 'foreign companies"--" Under § 9.1.2, Income Tax Act, they are regarded as Finnish tax nonresidents.

National legal rules governing foreigners' liability to tax are found in § 9, § 10 and § 13a, Income Tax Act (TVL), and in § 83, Act on Assessment Procedure (laki verotusmenettelystä). Because they are regarded as nonresidents, foreign businesses only must pay Finnish income tax on their income received from Finnish sources. Examples of such income include the operation of a trade, the operation of a business enterprise in this country.
However, if you are treated as having a permanent establishment in Finland, you must pay tax on all the income that can be attributed to that permanent establishment (PE)."

If this is the case, he might be in luck in this situation, see https://www.vero.fi/en/detailed-guidanc ... -business/ . I don't know anything about those setups (of having a foreign company here), so can't comment much. But in case that applies to your friend, and he was indeed registered as a foreign company instead, see the above link for info.
Hello, I was just browsing for some info and just read the post, seems like you have a very wide knowledge , I am a new entrepreneur with osakeyhtio company. Is it possible if I can ask you some questions related to bookeeping stuff? :) I would aprreciate a lot. Thank you :)


phuongmon
Posts: 11
Joined: Sat Jun 09, 2012 5:55 pm
Location: Helsinki,Finland

Re: Financial statement with zero income

Post by phuongmon » Wed Jan 16, 2019 12:49 pm

betelgeuse wrote:
Wed Aug 15, 2018 10:32 pm
biz_it wrote:
Wed Aug 15, 2018 6:50 pm
"I registered a company and have been working on a product. It is not finished yet and I have not earned anything during the past one year. Do I still have to file financial statement if my income was zero
Yes, a return has to be filed every year. Even if there is no revenue, it's possible to have costs and file a tax return with a loss on it.
biz_it wrote:
Wed Aug 15, 2018 6:50 pm
Is there any template available or do I have to do through an accountant. It seems like they charge hundreds of euros for a simple zero income financial statement. Please advise what is the easiest and cheapest way to file financial statement"

The cheapest way is to do it yourself (assuming low value assigned to one's own work) and file it online.
hello, do you know if one do the bookeeping by himself , how can he find a accounting service that could verify his papers? Thanks


User avatar
Kössi K
Posts: 108
Joined: Wed Jan 14, 2015 7:06 pm

Re: Financial statement with zero income

Post by Kössi K » Wed Jan 30, 2019 2:07 pm

You could just look online for local (or not local) bookkeepers and agencies that provide for those services, and contact them. I'm sure many of them will do that, but shop around for one, their rates vary.
It might cost you, but still worth it, to get an official record if you need one. You can also call the tax offices (info from vero.fi) and ask them, they're usually very helpful and friendly when you call them and ask. Their service phone numbers are there for exactly that: to help and provide service to tax payers.
Joha mie sanoi, vaikken mittää virkkant.


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