Elinkeinotulo

Elinkeinotulo, in Finnish taxation, refers to the income earned from entrepreneurial activity. It applies to natural persons and partnerships that obtain income from business operations, such as sole traders (toiminimi), farmers, and partners in general or limited partnerships. It does not describe wages from employment or passive capital income.

Calculation and scope: Elinkeinotulo is determined as the net result of business activities, i.e., income from sales minus deductible business expenses, depreciation, and other tax-deductible items. The resulting net amount forms part of the taxpayer’s personal income tax base. Losses from elinkeinotulo can typically be offset against other income in the same year or carried forward under statutory rules. Common deductions include ordinary business expenses, travel and vehicle costs, and home-office arrangements; depreciation or write-downs on business assets may also affect the amount.

Tax treatment: In Finland, elinkeinotulo is taxed within the personal income taxation framework, alongside other income categories such as earned income and capital income, and is subject to municipal tax and, depending on income level, state tax and possibly church tax. The exact tax burden depends on the overall tax base and applicable tax bands for earned income. Tax authorities require annual reporting of elinkeinotulo in the tax return, and entrepreneurs may make preliminary or estimated tax payments during the year.

Context and compliance: The concept is central for individuals and partnerships conducting business activity in Finland. It is tied to accounting and bookkeeping obligations for business activities, and may intersect with value-added tax (VAT) and employer obligations depending on the activity. The Finnish Tax Administration (Verohallinto) provides guidance and forms for reporting elinkeinotulo.