ARTICLE · 13 OCTOBER 2005

Tax Reform 2005:Changes In Company Structures

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The government has on the 19th of May given its bill on reforming the corporate and capital income taxation. The bill involves many changes, but the processing of the bill in parliament may still change the content of the reform.

FinlandTax

Article by Jouko Kiesi, Taru Vilpula and Mikko Alakare

Tax Reform 2005 - what now?

- Take advantage of the capital gains tax exemption

Incorporate the operations that will possibly be sold well in advance

Make sure that the shares belong to the fixed assets of your business

Plan the selling of unprofitable operations carefully, since capital loss from shares is usually not deductible

- Personal dispositions – consider the time of transfer

Sell the property this year, if you have owned it more than ten years

Sell the property next year, if you have owned it less than ten years

- Observe that dissolution losses are non-deductible

Due to the reform, dissolution and merger are parallel arrangements in taxation

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