16B Statement on foreign income (capital income) – Instructions
Foreign source income must be reported for tax purposes
Individuals living in Finland must also pay taxes in Finland for any income received from foreign sources.
You can report your foreign source capital income via MyTax or Form 16B 'Statement on foreign income (capital income)'. Report your foreign source earned income on Form 16A.
Report any capital gains or losses from trading with publicly listed securities you have received from abroad on Form 9A. Foreign dividend or interest income received via a Finnish broker is shown on the pre-completed tax return form. Check that this information is correct. If changes are needed, report the correct information via MyTax or on Form 16B.
Application for a tax card, application for tax prepayments or claim for adjustment
This form can also be used to report information when applying for a tax card or tax prepayments. In such a case, also fill in the 'Application for a tax card and/or tax prepayments' form (Form 5010) and attach this form to your application.
Also use this form when submitting a claim for adjustment after the assessment process has finished. Fill in the claim for adjustment of income tax (Form 3308) and attach this form to your claim.
Applications for a tax card, applications for tax prepayment and claim for adjustment forms can also be submitted via MyTax. Using MyTax eliminates the need for paper forms.
Tips on filling in and submitting the form
To correct the information you have provided or to claim an adjustment, fill in all the lines of the section to which you have made changes.
Report the income in euros and cents. If the income was paid in a currency other than euros, convert the income and income taxes (if any) into euros using the exchange rate for the transaction date. You can also use the average exchange rate published by the ECB.
Check the average exchange rate for the tax year (only in Finnish and Swedish).
For capital gains and losses, you must use the exchange rate that was in force at the time of the transaction.
The return address is marked on the first page of the form. Do not attach any receipts or free-form clarifications to the form; store them for six years after the end of the tax year. The Tax Administration will ask you for them, if necessary.
Instructions for filling in the form
Enter your name and personal identity code. Also report the tax year, i.e., the year during which you earned the foreign income.
This section is for reporting your dividend income from a foreign country.
- Report the country from which dividend was received and the amount of dividend.
- If you have paid taxes on the dividends abroad, report the amount on the line 'Tax paid abroad'. The amount of taxes entered here may not exceed the maximum amount of tax refund to be calculated on the basis of a treaty-based tax rate. In the Nordic Tax Treaty, for example, the tax rate for withholding taxes on dividends is 15%. The amount of taxes entered in the section 'Tax paid abroad' may not exceed the amount calculated according to the tax treaty-based tax rate, even if you have paid more taxes abroad.
- Report the name of the company distributing the dividends and check the box, according to whether the company is a publicly traded or non-publicly traded company.
- If you have received dividend income from a non-publicly traded company, also report the total number of shares and the mathematical or fair value of the shares in euros and cents (fair value as on the last day of the tax year).
- Also report any expenses incurred in acquiring or maintaining dividend income.
If taxes have been withheld on the dividend income abroad based on a tax rate higher than the one specified in the applicable tax treaty, a tax refund is claimed from the tax source. For instance, if the tax rate applied in Sweden was higher than 15%, you must claim a tax refund from the Swedish Tax Administration.
This section is for reporting rental income you have received from abroad. If you co-own a rental property, you only need to report your share of the rental income and any associated costs.
3.1 Calculation of rental profit or loss
- Check the box for an apartment or a real estate unit. If you check the box for other property, specify which type of property you have rented out.
- Report the country in which the asset rented out is located.
- If the asset rented out has a code, enter it on the line 'Code of the asset rented out'.
- Report the name and address of the asset rented out.
- Report the rental period, as well as your percentage share of ownership in the asset.
- Report the gross amount of rental income and the expenses relating to rental income, without interest.
- You can also report the amount of depreciation relating to real estate and other property (read more in the instructions for section 3.2). First, fill in section 3.2 'Calculation of depreciation' and then transfer the total amount of depreciation for the tax year to this section's line 'Depreciation for the tax year'.
- Calculate and report the net taxable rental income or taxable loss from rental operations (the difference between income and expenses without interest). Enter the positive difference on the line marked with a plus sign and the negative difference on the line marked with a minus sign.
- If you have paid taxes on the rental income abroad, report the amount on the line 'Tax paid abroad'.
- If you have taken out a loan for the purpose of acquiring income relating to an asset which you have rented out in a foreign country, report the amount of interest payments on the line 'Amount of interest payments relating to the rental income'.
3.2 Calculation of depreciation (real estate, other property)
Regarding the taxation of rental income, depreciation refers to the deduction and deferral of the acquisition costs of buildings rented out, long-term expenses, fixtures, appliances and other movable property (e.g. a boat).
- Check either the box for real estate or for other property.
- If you checked the box for real estate, report the total acquisition price of the real estate unit. If you checked the box for other property, leave this line empty.
- Enter the depreciation rate you have used (for example, the maximum depreciation rate for a residential building rented out is 4% of the building's undepreciated acquisition cost):
- The maximum depreciation rate for movable property (both within real estate and for other property) is 25%.
- The maximum depreciation rate for a store, warehouse, factory or workshop is 7%.
- The maximum depreciation rate for a residential or office building is 4%.
- For a building rented out, report the building or property's share of the total acquisition price of the real estate unit, in euros. If you checked the box for other property, leave this line empty.
- Report the undepreciated acquisition cost at the start of the tax year. Also fill in this line for other types of property.
- Report the additions made to the acquisition cost of the property and the undepreciated acquisition cost after the additions. If you have not made any additions, on the line 'Undepreciated acquisition cost after the additions' enter the same amount as you reported on the line 'Undepreciated acquisition cost at the start of the tax year'.
- Calculate the amount of depreciation (the share of the undepreciated acquisition cost based on the depreciation rate you used) and enter it on the line 'Depreciation for the tax year'. Add together the amounts of depreciation reported in all the columns, on the line 'Depreciation for the tax year' and transfer the total amount to section 3.1, line 'Depreciation for the tax year'.
- Subtract the amount on the line 'Depreciation for the tax year' from the amount on the line 'Undepreciated acquisition cost after the additions' and enter the difference on the line 'Undepreciated acquisition cost at the end of the tax year'.
This section is for reporting your capital gains or losses from abroad.
If you own only part of the asset, report the share of the selling price, acquisition cost and selling costs of your share of the asset, as well as the corresponding amount of capital gains or losses.
In this section, also report the information on sales for which you have received non-taxable gains or incurred non-deductible losses.
The gains derived from selling household assets are not taxable income if the total gains for the tax year are a maximum of EUR 5,000. Household assets do not include cars, boats, valuable jewellery, works of art or other investment property.
The gains derived from selling assets is not taxable income if the total selling prices of the assets sold during the tax year are a maximum of EUR 1,000. The losses incurred from selling assets is non-deductible if the total acquisition costs of the assets sold during the tax year are a maximum of EUR 1,000 and the corresponding total selling prices are also a maximum of EUR 1,000.
In the capital gains or losses, do not include the selling of assets for which gains have been separately deemed tax-exempt by law, or the selling of household assets or other comparable assets intended for personal use.
Selling your home
Instructions on the sale of your permanent home are provided in section 4.2.
4.1 Property sold
- Report the country in which the sold property is located.
- Check the box for the type of property in question: real estate, shares in a housing company or real estate company, or shares in a non-publicly traded (non-listed) company. Report the name and code (if any) of the sold property. If you checked the box for other property, specify what type of property you have sold.
- Report the selling date and acquisition date, as well as the ownership interest sold, either fractional (½) or percentage share (50%).
- Report the personal identity code, Business ID or TIN (Tax Identification Number) and the name of the buyer or other recipient.
- Check one of the boxes if the sold property was received as a gift or inheritance. Report the name and the personal identity code, Business ID or TIN of the decedent or donor.
4.2 Sale of permanent home
The capital gains derived from selling are not taxable income if you sell an apartment or a house that you have owned for at least two years and have used as your own or your family's permanent home during your ownership, for an uninterrupted period of at least two years before the sale.
The capital gains on the land associated with the sold property are also tax-exempt if the land area is 10,000 square metres or less, or if the land is located in a planning area and does not exceed the master plan's maximum limit for a plot or building site.
This section is for reporting the length of the period during which you or your family used the sold house or apartment as a permanent home.
Also report the total area of the building or apartment and the part used as a permanent home by you or your family.
If you are reporting the selling of a building, also report the area of land on which the sold building is located.
The section for calculating capital gain or capital loss does not have to be filled in concerning the tax-exempt sale of a permanent home.
4.3 Calculation of capital gain or capital loss
A capital gain or capital loss can be calculated by using the actual costs (in the column on the left) or the deemed acquisition cost based on holding time (in the column on the right). Only report the information relating to your ownership share.
- Selling price: Report the actual selling price.
- Acquisition price or undepreciated acquisition cost, or taxable value used for the purposes of inheritance and gift tax: If you have applied depreciation to the acquisition cost based on the holding time, report the acquisition price to which the depreciation was applied in the tax assessment.
If the sold property was received as an inheritance or as a gift, report the taxation value established for inheritance tax or gift tax purposes. Notwithstanding the above, if the property was received as a gift and less than a year has passed between the date of reception and the selling date, on this line enter the donor's acquisition cost, i.e. the amount which the donor could have claimed as a deduction in their own tax assessment.
- Transfer tax or corresponding tax paid abroad: If you paid a transfer tax or a corresponding tax abroad upon acquiring the property, report this in the calculation.
- Property acquisition costs: Report any other expenses directly related to the acquisition of property, such as the brokerage, audit, appraisal and attorney's feespaid by the buyer.
- Capital improvement costs: In the calculation, report the expenses arising from capital improvements to the sold property during your holding time. Also report any expenses due to annual improvements conducted to prepare the property for selling.
- Selling costs: Report the costs arising from selling the property and other expenses incurred in acquiring or maintaining a profit
- Deemed acquisition cost: If you calculate the amount of capital gains based on the deemed acquisition cost, calculate and report the deemed acquisition cost on the line 'Deemed acquisition cost 20% or 40% of the selling price'.
- The amount of deemed acquisition cost depends on the holding time of the sold property. Based on a holding time of less than 10 years, the deemed acquisition cost is 20% of the selling price. Based on a holding time of 10 years or more, the deemed acquisition cost is 40% of the selling price.
- The holding time of property received as a gift begins on the date of reception.
- If you are also reporting in the calculation items to be added to the selling price, add them to the selling price and calculate the deemed acquisition cost.
- Capital gain or capital loss: Calculate the amount of capital gain or capital loss by subtracting the acquisition price from the selling the price, as well as any costs relating to the acquisition and sale. If you use a deemed acquisition cost, subtract it from the selling price. If you do this, the costs arising from the acquisition or sale of the property can no longer be subtracted.
- If you are also reporting in the calculation items to be added to the selling price or acquisition price, add them to the acquisition price or selling price and calculate the amount of capital gain or capital loss (see also the section 'Additions' in these instructions).
- Report the amount of capital gains or capital loss you calculated on the line 'Capital gains' or 'Capital loss' respectively.
- Tax paid abroad: If you have paid taxes abroad for selling property, report the amount of taxes paid.
- Additions to the selling price: Report items to be added to the selling price if you have received compensation for damage to the sold property during the year of sale or the five previous years. Report the portion of the amount of compensation that was not used to repair or renew the damaged property.
- Additions to the acquisition price: Report any items to be added to the acquisition price. For instance, if a share in a general partnership or limited partnership has been sold, the positive balance of a private account can be reported as an addition to the acquisition price.
- If the property sold was a forest estate, report any items to be added to the capital gain or capital loss. An amount of the forest deduction corresponding to no more than 60% of the acquisition cost of the sold forest estate is added to the capital gain or capital loss derived from selling the forest estate.
This section is for reporting other capital income received from abroad. The different types of other capital income are:
5.1 Returns from a foreign UCITS
5.2 Interest from another EU Member State
5.3 Interest from a non-EU country
If the income you have received is not any of the above types of income, report it in section 5.4 Other capital income; please specify. Describe that type of income you have received. Use this section to report income such as sales of forest abroad or income received from abroad based on an investment-linked insurance contract or a life insurance contract (also known as a “shell”).
In each section, report the country from which the income was received, the name of the payer, and the (gross) amount of income. If you have paid taxes on the income abroad, report the amount of taxes paid on the line 'Tax paid abroad'. You can also report any expenses incurred in acquiring or maintaining income relating to the foreign capital income concerned.
You can also use the section 5.4 Other capital income; please specify to report any losses due to your foreign-based holdings in an equity savings account, savings-linked life insurance, capital redemption policy, term life insurance, or any insurance contract subjected to special tax treatment (under §35b as discussed above). If you report these losses, enter the amount under "Amount of income" as a negative figure with a minus sign in front.
Date and sign the form. Give your daytime telephone number.