Article 26 Double Taxation Agreement
Article 7 of the OECD Model Convention provides that the right to levy taxes on profits belongs to the Contracting State in which the enterprise is established. However, profits attributable to a permanent establishment of the enterprise in the other Contracting State may also be taxed in that Contracting State. Where the activity is carried out through the permanent establishment, the country in which the permanent establishment is established may levy taxes on that part of the profits attributable to it. Those profits are the profits that the permanent establishment could expect if it were a separate and independent entity carrying on the same or other similar activities. This article sets out the principles to be applied in determining the profits attributable to a permanent establishment. Example 6: An intercompany contract with mixed content, including the provision of a service The following chapters and passages provide information on the structure and usual order of the articles of the tax treaty. The contracts also contain lists listing the names of the taxes that cover the agreement. On the other hand, contracts generally do not contain any provisions concerning deductions and credits. Accordingly, deductions and credits are controlled only by the national tax legislation of states parties. Further guidelines on the taxation of dividends can be found in « Taxation of dividends » – Osinkotulojen verotus (in Finnish and Swedish, link to Finnish). As a rule, countries of residence also levy taxes on the global income of their inhabitants, in accordance with their own laws.
For this reason, the worker`s remuneration from work done in Finland may also be taxed in the worker`s country of residence. Any double taxation shall be discharged in the country of residence of the worker, in accordance with the provisions of the tax convention between that country and Finland or in accordance with the national legislation of the country of residence. The wages of a temporary agency worker are taxed by Finland if he or she comes from a country that does not have a tax agreement with Finland. Example 7: During the period starting on 1 February 2018 and ending on 30 October 2019, Mr A., a Finnish national, stays in Sweden with his family and works for a Swedish employer. A full week per calendar month during that period, Mr A. is employed by the same Swedish employer and works in Finland. .