16 Details on income from foreign sources, guidance for filling out the form 2017

This guidance is for the tax-return Enclosure Form no 16 — Details on income from foreign sources (3063e).

You must include the foreign-sourced income in your tax return in Finland 

People residing in Finland must pay income tax on their receipts of income from Finland and other countries as well. 

You must give details on the foreign-sourced income when you file your tax return.  To report the income, either use our e-filing resource Tax Return on the Web or send back the appropriate section of the Pre-Completed Tax Return enclosing Form 16 (Details on income from foreign sources).

Tax Return on the Web (in Finnish).
Details on income from foreign sources 

If you e-file, Tax Return on the Web guides you step-by-step as you advance. If you fill in the paper form, remember to give details on the following kinds of foreign income and any taxes you paid on them:  

  • Foreign pension income  
  • Wages received from a foreign employer  
  • Other foreign earned income 
  • Foreign dividends 
  • Other foreign capital income

If you have rental income from a foreign source, complete Form 7H (for flats or apartments) or Form 7K (houses and other real estate). If you have capital gains or losses derived from a foreign source, complete Form 9A (for securities and book-entry securities) or Form 9 (for other property).

Rental income – Apartment rented out (Form 7H)
Rental income – Real property rented out (Form 7K)  
Computation of capital gains or losses derived from securities and book-entry securities (Form 9A)  
Capital Gains and Capital Losses (Form 9) 

For some foreign-sourced income, the Tax Administration is able to obtain enough details directly from other countries. For this reason, the amounts are pre-printed on your Pre-Completed Tax Return. Examples of such income include pension income from Sweden, and foreign dividends paid to you by a Finnish intermediary or broker. Please check the pre-printed amounts, both the income and the taxes.  Fill in any blanks and complete Form 16 to give further details on the income and the taxes. 

Post Form 16 to the address printed on your pre-completed tax return or deliver it to any tax office. 

Do not enclose documentation with it (no bank statements, payslips, pension documents or statements). Keep the records for 6 years after the end of each tax year.  You may receive a request from the tax office to make them available if necessary.

How to complete Form 16

Receipts of retirement pensions from a foreign country  

Foreign pension income reporting must include the country where the pension comes from, the payer's name and the category or type of the income. Categories are Public service, Private sector employment (either with a mandatory or a voluntary pension scheme), and a non-employment-related pension income. In case you receive pension that falls into the category of "not related to employment", please fill in the Additional information field to give further details.

Enter the gross amount and any foreign-paid taxes for the entire year as an exact amount; do not round out the cents. Any foreign-paid social security contributions must not be included in the foreign-paid taxes.

If you received the pension in a non-euro currency, convert the amount into euros applying the 2017 exchange rate average of the European Central Bank. As an alternative, apply the actual exchange rate that was used. Give details on the name of the source currency (i.e. the currency of payment) and the corresponding amounts in that currency. 

Check the 2017 average rates of exchange (in Finnish) 

If payments of pension were made in a non-euro currency, the Tax Administration will automatically deduct €60 as bank service fees from the taxable pension income. If actual cost was higher than €60, fill in the Additional information field to give the exact amount.

If you started receiving the pension income recently, please enclose a copy of a document proving that pension is granted to you. Otherwise, there is no need for you to enclose any documentation. 

If you are changing the details printed on your Pre-Completed Tax Return regarding your Swedish-sourced pension, please give a thorough explanation in Additional information on what changes you made and why. If the pre-completed tax return contained amounts relating to Swedish pension, the Tax Administration has already deducted the bank charges for foreign-exchange conversions. Please don't claim the same deductions again. 

Check the Foreign pension benefits

Overseas work for which you demand tax treatment under the 6-month rule 

An important factor affecting the tax treatment of wages is whether the provisions of §77, Income Tax Act, known as the 6-month rules, are applicable.

Give details on any work you do that may fulfil the requirements of the 6-month rule and thus be exempt from taxation. If the 6-month rule is applied, you don't have to pay Finnish income tax. However, you must make a social security contribution payment if you are covered by the Finnish social insurance system, as provided in the Act governing health insurance.

Please visit Tax.fi to check whether the 6-month rule gives you exemption: 

Fill in the spaces for Country, Period of stay (start date — end date), Employer's name, Type of wages received. The type may be a 'wage equivalent' for purposes of insurance, agreed between the employer and the employee, or it may be Wages subject to tax withholding. 

Enter the exact sum in euros and cents when reporting your wage income.  If you were paid in a non-euro currency, convert the amount into euros applying the 2017 exchange rate average of the European Central Bank. As an alternative, apply the actual exchange rate that you used. 

Check the 2017 average rates of exchange (in Finnish) 

Give the dates that fall within the tax year when you were present in Finland. Give a specification of your periods of stay in Finland, filling in each one of them (dates of entry and exit) in their respective fields. 

If you are going to continue working, give details as to how long (up to what date) and the name of the country where you work. If you also worked overseas before the tax year started, give the name of the country, your period of stay (dates of entry and exit; or December 31), and the name of your employer. 

More on working in a foreign country  

Overseas work on which the 6-month rule does not apply  

Give details on any work you do that does not fulfil the requirements of the 6-month rule. Enter Name of country, Name of employer, your Wages (including cash and fringe benefits) and any foreign-paid taxes.  Any foreign-paid social security contributions must not be included in the foreign-paid taxes.

Enter the exact sums in euros and cents when reporting your wage income and the taxes.  If you were paid in a non-euro currency, convert the amount into euros applying the 2017 exchange rate average of the European Central Bank. As an alternative, apply the actual exchange rate that you used. 

Check the 2017 average rates of exchange (in Finnish) 

More on working in a foreign country     

Further details on the work performed  

Fill in any additional details regarding your work abroad including whether your employer is of the public sector or of the private sector.  Enter the necessary details as to whether you have seafarer's income on board a foreign ship and whether you have frontier worker's income, earned in Sweden or Norway. 

Claim the expenses for production of income, if applicable. If you qualify for other deductions with respect to your foreign-sourced income (including pension insurance payments, employment insurance premiums, travel expenses), enter the amounts in the appropriate spaces on your pre-completed tax return.

Other foreign income treated as earned income

Report the details on any other earned income from foreign countries that is not regarded as pension income or wage income.  Enter the name of the Country of source, Payer's name and the Type of income (e.g. a social benefit).  Enter the gross amount of the income and any foreign-paid taxes.  Enter the exact amounts without rounding out the cents. 

If you were paid in a non-euro currency, convert the amount into euros applying the 2017 exchange rate average of the European Central Bank. As an alternative, apply the actual exchange rate that you used.  Give the name of the foreign currency, and the amounts in that currency of the income and the foreign-paid tax. 

Check the 2017 average rates of exchange (in Finnish) 

If necessary, fill in the Additional information field to give further details. 

Receipts of dividends from foreign countries

Enter the Country of source, the type of the distributing company and its name.  The type of the distributing company may either be Listed or Non-listed corporation. Enter the exact sums of the dividends and the foreign-paid taxes in euros and cents. Do not round out the amounts.  

If you were paid dividends in a non-euro currency, convert the dividends and the taxes into € applying the exchange rate of the date of payment, or alternatively, applying the average exchange rate for 2017 of the European Central Bank. Give the name of the foreign currency, and the amounts in that currency of the income and the foreign-paid tax. 

Check the 2017 average rates of exchange (in Finnish) 

Enter the withholding rate under the provisions of the tax treaty between Finland and the country of source. Refer to the treaty Article containing the provisions on dividend income. If Finland and the country have no tax treaty, leave the field blank.

More on Tax Treaties in force.  

Provisions of tax treaties define a rate of withholding which sets the maximum limit of how much credit for foreign-paid dividend taxes can be given to you. The Nordic countries have a multilateral treaty where the corresponding provisions set out a 15-percent rate for listed corporations.  Only enter an amount that matches the treaty-defined rate in the Tax paid to country of source field although you may actually have paid more. 

If the foreign payer withheld more than the treaty-defined amount, you must ask the authorities of that country to pay you a refund. For example, if you paid more tax to Sweden than what a withholding rate of 15% would call for, you must ask the Swedish authorities for a refund. 

If you received dividends from non-listed corporations, you must also enter the number of shares you hold in the corporation and the exact mathematical value, or market value, of the shares as an exact amount; do not round out the cents (if you give the market value, it must be that of 31 December 2016). 

More on receipts of dividends from a foreign country; more on capital gains from the selling of securities

Other foreign capital income

Give details on any foreign-source capital income including profit surplus payments from cooperative societies, interest payments you receive, and returns on investments in mutual funds.  Enter the name of the Country of source, Payer's name and the Type of income.  Enter the exact amounts of the income and the foreign-paid taxes in euros and cents. Do not round out the amounts.  

If you received the income in a non-euro currency, convert it and the taxes into € applying the exchange rate of the date of payment, or alternatively, applying the average exchange rate for 2017 of the European Central Bank. Give the name of the foreign currency, and the amounts in that currency of the income and the foreign-paid tax. 

Check the 2017 average rates of exchange (in Finnish) 

If necessary, fill in the Additional information field to give further details. 

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