Community tax

Entities pay income tax on the difference between their taxable income and their deductible expenses, calculated on the profit at a rate of 20 %. In addition to corporations, cooperatives and, under certain conditions, business enterprises, public bodies, associations, institutions, foundations, and housing cooperatives are also subject to corporation tax.

The distribution of depreciation has a strong influence on how much corporation tax is due in any given year. Due to the high investment cost of wind farms, depreciation is significant during the first years of operation. As a result of depreciation, the amount of corporation tax accruing from a wind farm is relatively small during the first years of operation.

Determination of community tax

The municipal share of community tax for the tax year is determined based on the data from the two most recently completed taxations. If an entity is established in only one municipality, the entity’s tax is added to the calculation of this municipality. Conversely, if the entity has an establishment in more than one municipality, the entity’s tax is added to the calculation of those municipalities in proportion to the number of employees in each municipality in which the entity has an establishment.

However, the taxes of entities belonging to a corporation are added together and added to the tax calculation of the municipalities concerned in proportion to the number of employees per municipality of the establishments of the entities belonging to that corporation. In these cases, therefore, the number of employees per municipality is the decisive factor in determining the municipality to which the tax is paid.