The aim of this thesis was to study taxation of cooperative and methods that cooperative can use for profit planning. The purpose was also to examine benefits that change of the form of business from cooperative into limited company can offer. The commissioner of this thesis is a small cooperative and the objective was to provide information for the commissioner about taxation of cooperative, methods of profit planning and benefits of the change of the form of business.

The thesis was implemented as a qualitative research and the approach was case study. The source material was collected from Finnish tax legislation and corporate law as well as from professional literature of the field. Also a representative of the commissioner was interviewed to collect information about the cooperative. The study consists of four main chapters that cover cooperative as a business form, change of the form of business from cooperative into limited company, taxation of company and its owner along with result planning and tax planning of cooperative. Conclusions cover the topics from the commissioner’s point of view.

The research shows that there are methods for cooperative to use for profit planning and that the methods are linked in most cases to taxation. The thesis does not offer detailed guidance for the commissioner concerning profit planning, taxation or change of the form of business but clarifying information of the topics. More studying of the benefits of the change of the business form would be needed because the decision can’t rely solely on gaining benefits on taxation. For example reforms in the taxation laws can change the position of different forms of business. The last reform of Cooperative Societies Act took effect in January 1st 2014 and resulted in similarity with Companies Act both structurally and in terms of content. When comparing cooperative and limited company it can be seen that the reforms in laws are trying to achieve more equality. Economic operating conditions are improving between different business forms both generally and in relation to competitors.