Treaty detail
United States - Finland tax treaty
A practical treaty page built around the official treaty text, key withholding categories, permanent-establishment rules, and article-level summaries.
Signed
1989-09-21
Effective
1990-12-30
Articles seeded
6
Withholding snapshot
Dividends
Individual rate: 15% · Corporate rate: 5%
The 5 percent corporate rate generally depends on direct ownership of at least 10 percent of the voting stock. The 2006 protocol added a zero-rate provision for qualifying 80-percent parent-subsidiary holdings, subject to limitation-on-benefits conditions and article-level review.
Interest
Rate: 0%
The treaty generally provides zero-percent source-country interest withholding. Contingent interest and certain back-to-back arrangements remain subject to article-level review.
Royalties
Rate: 0%
The treaty generally eliminates source-country withholding on qualifying royalties across the major copyright, patent, and know-how categories.
Permanent establishment
Construction threshold: more than 12 months
Dependent-agent analysis remains important where a person habitually concludes contracts on behalf of the enterprise under the treaty wording.
Other treaty flags
Private pensions are generally allocated to the residence state. Government pensions and social-security payments follow distinct article paths and were updated in part by the 2006 protocol.
Seeded article summaries
Article 4
Residence
Defines treaty residence and gates access to reduced withholding and business-profit protection.
Residence under the Finland treaty must be read alongside the limitation-on-benefits article updated by the 2006 protocol. The combined analysis determines whether treaty benefits actually apply.
Article 5
Permanent Establishment
Sets the business-presence threshold for source-country taxation.
The Finland treaty follows the standard rule under which a building site, construction or installation project, drilling rig, or ship creates a permanent establishment only if it lasts more than twelve months. Preparatory-and-auxiliary carve-outs apply.
Article 7
Business Profits
Generally reserves business profits to the residence state absent a permanent establishment in the other state.
This is the operating-rule article for founders and consultants once the PE analysis is complete. It generally keeps business profits from being taxed in the source state where no PE exists.
Article 10
Dividends
Provides reduced source-country withholding rates for qualifying dividends, with zero-rate eligibility under the 2006 protocol.
The Finland dividend article was improved by the 2006 protocol, which added zero-rate treatment for qualifying parent-subsidiary holdings. The 15 percent and 5 percent headline rates remain useful but do not capture the full picture.
Article 11
Interest
Generally provides for zero-percent source-country interest withholding.
Interest under the Finland treaty is generally not subject to source-country withholding. Contingent interest and certain related-party arrangements remain subject to article-level review.
Article 12
Royalties
Generally removes source-country withholding on qualifying royalties.
The royalty article is especially valuable for software, licensing, and IP structures because the treaty generally produces a zero percent result across the major royalty categories.
Official text
Other treaties involving these jurisdictions
Computed from the cross-reference graph. Links open the related entity on this site.
This entry cites
- TreatyUS–GB treaty
- TreatyUS–CA treaty
- TreatyUS–DE treaty
- TreatyUS–FR treaty
- TreatyUS–JP treaty
- TreatyUS–NL treaty
- TreatyUS–AU treaty
- TreatyUS–KR treaty
Primary sources
- Finland treaty documents pageVerified 2026-05-20
- Official U.S.-Finland treaty PDFVerified 2026-05-20
- IRS Tax Treaty Table 1Verified 2026-05-20
Important disclaimer
This library is for general tax education only. Always verify filing obligations, due dates, and tax consequences against the cited primary source or with a qualified tax professional.