No specific format is required for terminating the business operations of a self-employed professional or self-employed person. Business operations can be terminated by selling the entire assets of the business, for example, or simply by factually discontinuing business operations.
Notification to the Finnish Patent and Registration Office
The termination of operations must be declared without delay to the Finnish Patent and Registration Office using Form Y6. Through this declaration, the Tax Administration is also notified of the termination of business operations, and the company can be removed from the VAT, employer and prepayment registers.
Enterprise mortgages must either be redeemed or transferred to the acquiring party or the party continuing the business, before the termination of business can be entered in the register.
Tax notifications and prepayment taxes
When the business operations have ceased, the self-employed professional or self-employed person is responsible for submitting all tax-related notifications on time (tax returns, periodic tax returns, and annual information return). They must also ensure that the prepayment taxes of the last tax year are properly paid. In addition, they must arrange for all accounting materials to be appropriately retained for the period set out in the Accounting Act.
Taxable income and income redistribution in the year of termination
In order for the business operations of a self-employed professional or self-employed person to be considered terminated, the business may not have any remaining assets or debts. An entrepreneur may give up the business assets either by selling them or by introducing them into private use. A self-employed professional or self-employed person is personally liable for business debts after the termination of business operations.
The sales of assets and the effect of introducing assets into private use are taken into account in the calculation of the business income of the final tax year. Provisions made during operation are also calculated as taxable income in the year of termination. The termination of business operations may result in a large one-time taxable income, which, depending on the net assets, may be considered capital income or earned income. Income redistribution may ease the taxation of the large one-time income as regards the share of earned income. The income redistribution must be requested before taxation is ended for the year in which the income was received.