Legal Alert – Changes in elimination of international double taxation
The so-called credit method used in elimination of double taxation has been revised from 1 January 2010. Using the credit method, the foreign tax paid for certain income is reduced from the Finnish tax imposed on the same income. The amendments remove certain problems related to the double taxation of foreign income and the allocation of payment of taxes. Hence, Finnish entities have now better possibilities to avoid double taxation of foreign income arising when tax is imposed on the same income both abroad and in Finland.