Annual information return for payments to persons with limited tax liability in Finland (7809e) 2018

This guidance concerns both the electronically supplied VSRAERIE and VSPSVYHT filings and the paper-printed form no 7809e.

Changes on the previous year

The 'Introduction' section

The Introduction contains a number of updates.

Beneficiary's Finnish Personal ID, Business ID, or date of birth (12)

Updated for the part that concerns the C6 Type of Payment.

Country code of the country of tax residence (14)

Updated for the part that concerns the C6 Type of Payment.

Type of Payment (16)

A new Type of Payment is introduced:  
C6 – Interest for which no beneficial owner is reported

Transaction code (049)

This is a new entry.

Pension that has been reclaimed (26)

The year is updated.

Introduction

You must submit this information return to the Tax Administration by the end of January following the year when you have made a payment to a nonresident, i.e. to a person with a limited tax liability in Finland. The payments to be reported include wages, pensions, nonwage compensation, dividends, interest, shares in an employees' fund and royalties.

To e-file the information, log on to www.ilmoitin.fi, use the Tyvi service providers, or complete a Tax Administration's fillable form on the Web. You also have the option of printing out a paper form and submitting the information on paper. The payor must use e-filing if there are five of more beneficiaries. The requirement to e-file does not concern payors who are private individuals and estates of a deceased individual.

The deadline for electronic filing is 3 February 2019. For paper filing, it is 31 January 2019. For more information, see "Annual information returns" Vuosi-ilmoituksen antaminen  (in Finnish and Swedish). If the deadline date falls on a Saturday, Sunday or legal holiday, the return must arrive at the Tax Administration on the next business day.

Making corrections; using the new identifier of the filing

For more information on how to make corrections to annual information returns after you submitted them, see ”Making corrections” (vero.fi > Lomakkeet > Vuosi-ilmoituslomakkeet).

If you make corrections, it involves the submittal of a new return. The information return submitted last will always replace the previous one. There can only be one return with the same identity details. If there is a mistake in them, you must invalidate the entry and enter the correct details. 

The identifier for this annual information return is:

  • Filing name
  • Type of payment
  • Year of payment
  • Payor’s ID
  • Recipient’s Finnish personal ID or Business ID
  • Recipient’s date of birth
  • Recipient’s family name or full name of corporate entity
  • Recipient’s first names
  • Tax Identification Number in residence country TIN, personal ID or business ID (not Finnish)
  • Country code of residence country
  • Business ID of account operator
  • ISIN code or product name

Definition of 'nonresident' or 'having a limited liability to pay tax'

People staying in Finland for maximum 6 months continuously are nonresidents.  Corporate bodies are regarded as nonresidents from the perspective of taxation in Finland if they were not set up according to the legislation of Finland or if they have a registered domicile in another country, not Finland.

You should file the annual information regardless of whether the payment was subject to withholding / tax at source or exempt from it. In this way, interest paid to persons/corporate bodies with limited tax liability must always be reported, although interest is usually exempt from tax under § 9, Income Tax Act. Similarly, you must report any compensation paid for work that a person with limited tax liability has performed for you in a foreign country.

If you have hired an independent contractor, paid nonwage compensation (i.e. "trade income") and withheld tax at source from this compensation, you must report the annual information even if the independent contractor is not a self-employed individual, but instead has set up a small enterprise with the legal form of a business company. When you have paid the nonwage compensation ("trade income") to an individual (natural person), you must always report it, regardless of whether you withheld tax at source.

An exception from the 6-month rule is the ‘key employee’ concept (under Act 1551/1995 governing the income tax of foreign key employees), because payments to key employees must be reported even if the employee stays in Finland longer than six months. Persons staying in Finland longer than six months An individual is regarded as a tax resident of Finland if he or she stays in Finland for a continuous period of more than six months. The stay is to be regarded as continuous in spite of temporary absences. Therefore, summer vacations spent in the home country will not cause an interruption in the counting of time. After the threshold of six months, the employer company should file an Employer Payroll Report to the Finnish tax authority on Form 7801e. If the individual's length of stay has not been known at the outset, you as the payer may have withheld tax at source on his or her pay. However, if it has later turned out that the stay is longer than six months, the individual has become a Finnish tax resident. In these circumstances, the 7801e report must be filed in order to report the pay and amounts withheld for the entire year (although you may have withheld tax at source from his wages during the first months of stay in Finland).

Further information

Read more:  Tax treatment of individuals arriving in Finland; and about annual information returns filed by third parties.

Information on the payer

614 Total wages and compensation that are subject to tax at source and employer’s health insurance contribution (includes the tax values of fringe benefits)

If a nonresident wage earner is covered by the Finnish social system, you should pay the employer’s health insurance contribution in respect of all wages paid out. Use line 614 to report all wages (including fringe benefits) paid to such workers.

More information on the coverage of the social security system is  is available in Finnish and Swedish:  "Sairausvakuutusmaksut – veroilmoitus työnantajasuorituksista ja vuosi-ilmoitus 2018"

You must always report payor-specific details on the summary (7801Y or VSPSVYHT). For wages, in the summary section 614, report either income subject to employer's health insurance contribution or zero.

Information on recipients/beneficiaries

Year of Payment

The calendar year when the payment was made is the Year of Payment, and, if dividends or profit-surplus payments have been distributed to nonresidents, the annual information return on them must be filed so as to cover all the amounts of dividend that are ready for payment, even if the beneficiary had not yet withdrawn the dividend i.e. received it.

More information on the reporting of dividends and profit surplus is in the Finnish-language bulletin  Ennakonpidätys osingosta ja Verohallinnolle annettavat ilmoitukset. The guidance also concerns nonresidents.

7 to 11 Recipient’s name, Family name, if natural person Write the full name and address in the foreign country where he or she is a tax resident (do not write the address in Finland). If the beneficiary is a corporate entity, give the name in full (7). If the beneficiary is an individual, give last name (7) and first names (8) separately. The country of tax residence is the country where the taxpayer's permanent home is located and where his or her family members live. Regarding legal persons, the country of tax residence is the country of location of the management.

It is important to report the exact foreign address not only when reporting wages, but also when reporting payments of dividends, interests and royalties. As the payer of these types of payments, you are entitled to withhold less tax only if you are able to fully identify the beneficiary. This is required by § 10, Act on the Taxation of Nonresidents' Income and Capital (627/1978). If you — or the accounting firm representing you — do not have precise information on recipient’s name, address, country of tax residence, and date of birth (if the recipient is an individual), you are expected to always withhold 30% as tax at source. 

If you have paid out dividends to a nominee-registered shareholder (reported as the E3 Type of Payment), and you have no other information than the country of residence (the country having a tax treaty with Finland), enter the country code in 14, and enter the name and address of the foreign asset management firm in the name and address fields.

For more information, see Payments of dividends, interest and royalties to nonresidents.

12 Finnish personal ID / Date of birth

It is mandatory to write the Finnish personal ID (for AR, R2, R5, R6, RE, RM, A7—A9, B1 – B0 and P4—P7 Payment Types). Use the 'ddmmyy-NNNT' format.  If the payment falls into another category and no Finnish personal ID is available, report the beneficiary's date of birth, format 'ddmmyyyy'. 

For corporate bodies, enter their Finnish Business ID into the column for Finnish personal ID.  The Business ID can only be reported in connection with the following Types of payment: A4, C2—C6, D1, and E1—E5.  The Business ID is mandatory information if E3 Payments were made to a foreign custodian with a Finnish Business ID registered in the Foreign Custodian Register. The standard format for the Business ID is 0123456-2.

13 Home-country TIN, personal ID or business ID (not Finnish)

If you are aware of the beneficiary’s Tax Identification Number, enter it here.

14 Country code

The country code of the tax-residency country is mandatory. Normally the country of tax residence cannot be Finland (FI) if you made payments to a nonresident.

If you cannot find the country code in the list at the end of this article, look it up on http://www.iso.org/iso/english_country_names_and_code_elements.htm (ISO 3166 standard).

Country codes can also be found on the list of tax treaties in force

If the Type of Payment is E3 or C6 and the beneficiary's home country is not known, enter XX in field no 14.

If the Type of Payment is A7 and payments to a foreign key employee are in question, the country code can in this case be “FI”, because it is an exception.

16 Type of Payment

Fill in field 16 to specify the Type of Payment. Use separate forms to show each Type if you paid several different payments to one beneficiary.

Wages and nonwage compensation (=trade income)

Payments subject to tax at source

A1 Wages/salaries (not included in AS and AD below) from other payers than a public corporation; payments of shares of the yield in an employees' fund. 

Use the A1 Type of payment to report private-sector wages. The concept of ‘wages’ covers all types of salaries and wages, fees, remuneration, benefits and compensation based on an employment contract, fees for attending meetings, and fees for giving lectures. Furthermore, for the purposes of taxation, 'wages' also means money retrieved from a partnership in which the individual is a partner, and the personal compensation for acting as a shop steward, trustee, auditor, or in other personal, confidential post. 'Wages' also includes fringe benefits such as accommodation and meals, and taxable allowances paid to the individual taxpayer to cover any costs.  When dividends have been paid solely because of the individual taxpayer's work effort, they are taxed as wages and you must report them as A1. You must use A1 Type of Payment to report the profit-shares in employees' funds even if taxes had been withheld on it using a nonresident's tax card.

You as the payer are also expected to report any and all wages paid to foreign citizens living and working in another country on a permanent basis, even if Finland does not have the taxing rights in respect of such wages.

The A1 can no longer be used if the foreign citizen receiving the payment has stayed six months in Finland and thus become a Finnish tax resident, fully liable to tax in Finland. His or her wages are reportable on the Employer Payroll Report form, Form no 7801e, using the normal 'P' Type of payment even if he or she had been treated as a nonresident and tax at source had been withheld during the first months of his or her stay.

A2 — Wages paid by a public corporation.

Refers to the State of Finland, Finnish municipalities and parishes of Finnish churches.

Frontier workers

Under the Nordic Tax Convention, individual taxpayers who work in adjacent districts crossing the frontier between two Nordic countries are taxed on their earned income in the country where they live, not in the country where they work. The rules on frontier work apply in situations where tax residents of (the districts near the Finnish border of) Sweden or Norway work in a Finnish district.

Adjacent to Sweden, the Finnish Enontekiö, Kolari, Muonio, Pello, Tornio and Ylitornio are frontier districts, as are, correspondingly, the Swedish Haparanda, Kiruna, Pajala and Övertorneå.  As for the Finland-Norway border, the Finnish Enontekiö, Inari and Utsjoki, and the Norwegian Karasjok, Kautokeino, Kåfjord, Nesseby, Nordreisa, Storfjord, Sör-Varanger and Tana are frontier districts.

Under the circumstances, wages paid in Finland fall outside Finnish taxation.  Nevertheless, employer payroll reports must be filed.  The exemption only concerns wages, not other income types such as pensions and social benefits. If you are a Finnish employer paying wages to a Nordic frontier worker you must pay social security contributions and withhold health insurance premiums on the wages paid out. However, these obligations do not apply to you if the duration of the employment contract is shorter than 4 months, or if the employee is a holder of the A1/E101 certificate or a similar document.  Paid wages must be reported as A1 Payments, if private-sector wages were paid to a frontier worker, or as A2 Payments if public-sector wages were paid to a frontier worker.

AS Employee stock options and stock grants based on work in Finland 

This Type of Payment is for the mandatory separate reporting of employee stock options (ESOs) or grants given to a nonresident employee for the period of performing work in Finland.   

Legal provisions governing ESOs are found in § 66, subsection 3, Income Tax Act. They set out the rule that ESOs are considered earned income, along with other similar benefits coming from the employer. For this reason, even these should be reported.

To give a worker shares as a stock grant is a form of compensation.  If the process falls under the scope of the provisions in § 66, subsection 3, Income Tax Act, reporting must be made in the same way as for ESOs. If a portion of a stock grant is paid in cash, it must be included in the reporting.

The taxable value must equal the quoted value of the underlying share at the date of exercising the ESO. If the employee/worker has paid a price to buy the option for himself, this price should be subtracted from the value. The relevant tax year is the year of the exercise date.

AM Seafarer's income

Payments you make to a seafarer are reported under this specific Type of Payment. The reason for separating seafarer's pay from other pay is that international tax treaties usually contain special provisions on it.

AD Director's contract fee

Use this Type of payment when fees have been paid due to the individual beneficiary's membership in a corporate board of directors or a similar administrative organ.  However, payments made to a Managing Director are treated as wages/salaries, which means that their Payment Type is usually A1. 

A3 Royalty payments, e.g. for the use of copyright 

Royalties are usage-based payments made by one party to another for ongoing use of an asset, sometimes an intellectual property (IP) right. Examples: literary, artistic and scientific works, photographs, manufacturing patents, trademarks and models.

A4 Fee or nonwage compensation for work (amounts paid to a company must be reported only if tax at source has been withheld) If you have paid nonwage compensation to an independent contractor, a natural person, use A4 Type of Payment. 

If you have withheld tax at source from this compensation, you should report this on Form 7809e even if the independent contractor is not a self-employed individual, but instead has a small enterprise, with the legal form of a business company. It is emphasized that you should always report all payments to natural persons, regardless of whether you withheld tax at source.  

If the party presenting the invoice is not prepayment registered or it does not give a tax card showing a zero rate, you as the payer should withhold 13% (of pay to business company) or 35% (of pay to nonresident self-employed individual) on the amount of the invoice, assuming that work has been performed in Finland. However, nothing has to be withheld if the foreign company/individual is prepayment registered in Finland, or alternatively, shows you a tax-at-source card allowing 0% withholding or another document that prevents the withholding.   

Dividend payments solely based on work effort are A4 Type of Payment. 

A5 Compensation for an authentic performance of a performing artist

Tax is collected at source at the rate of 15% or any lower rate showing on the beneficiary's tax-at-source card.

Use A5 Type of Payment to report payments to artists, such as theatre, radio, TV or cinema artists, or musicians, these payments being based on personal performances or endeavours.    

A6 Compensation for an athletic endeavour of an athlete/sportsman

Tax is collected at source at the rate of 15% or any lower rate showing on the beneficiary's tax-at-source card.

Use A5 Type of Payment to report payments to artists, such as theatre, radio, TV or cinema artists, or musicians, these payments being based on personal performances or endeavours.  

A7 Wages of ‘key employees’ from foreign countries 

Use A7 Type of payment to report salaries/wages qualifying for a special tax at the flat rate (under Act no 1555/1995 governing the tax on key employees' incomes). 

These payments are paid to individuals who fulfill the following conditions: The beneficiary teaches or conducts university research earning a regular cash salary of at least €5,800 per month for performing work that requires special expertise. 

  • The beneficiary becomes a Finnish resident when work starts.
  • Cash salary is at least €5,800 per month and is paid for the work defined as 'key employee's' work. Fringe benefits are not included. However, if the individual arrived to an institute of higher education in order to work there as a teacher or researched, the cash amount has no minimum threshold.
  • The work to be done for the Finnish employer require special expertise.
  • He or she is not a citizen of Finland, and has not been treated as being a tax resident of Finland during the five years that go before the year when work starts.

Further preconditions for treatment as a key employee include that the Finnish Tax Administration has approved the case and it has been recorded on the individual’s tax card.  The A7 is exclusively reserved for key employees' income.  If the beneficiary's status as a 'key employee' were to terminate in the course of the calendar year, and the beneficiary continues to work in Finland, the wages paid to him after this must be reported on the Employer Payroll Report form (7801e) using the 'P' Type of payment — main-job income or the '1' Type of payment — sideline income. Some key employees may have a contract stating that a fixed after-tax amount is paid to them as their salary. However, the amount paid should be reported as A7 even in this case.  The reporting should also include the key employee's Finnish personal identity number.

Example: The employee has worked as a key employee in Finland 1 January to 31 March. His total wages amount to €30,000 for this period, as monthly pay has been €10,000.  The employee then continues to work in Finland as a normal employee through the end of the year. His wages continue to be €10,000 per month gross.

Form 7809e
Line 16 — enter the Type of Payment, A7. 
Line 17 — enter the total gross cash wages (€30,000). 
Line 18 — enter the taxes that were withheld at source (€10,500).  
Line 19 — enter the gross total that was paid (€30,000).

Form 7801e
Line 10 (110) — enter the Type of Payment, P or 1.
Line 14 (114) — enter the total gross cash wages (€90,000).
Line 15 (115) — enter the withheld tax (e.g. €37,000). 
Line 16 (116) — enter the premiums (of pension/unemployment insurance) that were withheld for the entire year.

A8 Wages paid by foreign subsidiary to Finnish-insured nonresident employee working outside Finland 

If there is a nonresident employee working for a foreign multinational corporation, place of work not in Finland, but the employee being covered by the Finnish social security system, use A8 Type of Payment to report wages.

However, the wages are not taxable in Finland because they are paid to the nonresident for work performed in another country, and the employer represents the private sector. In spite of this, the employer’s health insurance contribution must be paid to Finland. This situation usually arises when the Finnish subsidiary of a multinational corporation has assigned the employee to start working for another subsidiary in another country, and the coverage of the Finnish social insurance system has been agreed between the employer and the employee, and certificates/decisions from the Finnish Centre for Pensions, the Ministry of Social Affairs and Health etc. have been requested jointly. In this case, the Finnish subsidiary should initially pay the contributions to the Finnish authorities in Finland, and proceed to charge the amounts later from the foreign subsidiary—the actual employer. This obligation, and the information-reporting requirement, will remain in force as long as the employee stays in the Finnish social security system.

For more information (in Finnish and in Swedish), see suomalaisen työnantajan menettelystä, kun ulkomainen konserniyritys tms. maksaa rajoitetusti verovelvollisen palkan.

A9 Wages paid to a foreign leased employee, if the duration of stay in Finland is shorter than 6 months (the filer-employer has no permanent establishment in Finland)

This information-reporting requirement only concerns payments to leased employees from Estonia, Latvia, Lithuania, Belarus, Georgia, Kazakhstan, Moldova, Poland, Turkey, Bermuda, Guernsey, Jersey, Cayman Islands, Norway, Sweden, Denmark and Iceland and any country with which Finland does not have a tax treaty.

For more information, go to www.tax.fi  > Search: Leased employees.

Example: Having arrived from Estonia, the worker works in Finland 15 March through 22 May.  Gross wages: 4,000 euros. The Estonian worker has requested the Finnish tax office to issue an order for prepayments of tax. The pre¬payments relate to the Finnish income tax for the period worked in Finland. The tax office computes the amounts to be prepaid, and takes the applicable deductions into account. It should be noted that the prepayments will be credited in the worker’s final tax assessment automatically, and they should not be considered employer-withheld tax at source. For this reason, they should not be reported in Form 7809e, even if the employer had actually paid them to the tax office because there had been an arrangement between the worker and the employer to that effect.

Line 16 — A9 Type of payment  
Line 17 — enter  €4,000
Line 27 — number of days worked is 69. The days have an important role in the reporting, because the worker’s tax deductions are affected by them.

Payments subject to withholding

AR — Wages subject to withholding, paid to nonresidents (paid by other payers than the public sector)

If you have paid private-sector wages or salaries to a nonresident who has a nonresident's tax card, you must use the AR Type of Payment for reporting.

R2 — Wages from a public corporation, subject to withholding, paid to a nonresident

If pay by a public corporation has been subject to withholding as instructed on the tax card of the nonresident beneficiary, use the R2 Type of Payment.

RM — Seafarer's income, subject to withholding, paid to a nonresident

If the wages of a seafarer has been subject to withholding as instructed on the tax card of the nonresident beneficiary, use the RM Type of Payment.

R5 — Compensation for the personal endeavours of a performing artist, subject to withholding, paid to nonresident

If an amount paid to an artist-entertainer has been subject to withholding as instructed on the tax card of the nonresident beneficiary, use the R5 Type of Payment.  Examples include actors in the theatre and cinema, performers on the radio and on TV, musicians.

R6 — Compensation for the personal endeavours of a sportsman, subject to withholding, paid to nonresident

If an amount paid to an athlete or sportsman in compensation for personal endeavours has been subject to withholding as instructed on the tax card of the nonresident beneficiary, use the R6 Type of Payment.  'Personal endeavour' means that the individual arrives to Finland in order to play or to participate in a competition.

Payments of pension

B1 Pension for retirement from work, paid by public corporate body (not earned in business activity or in a business corporation)  
B2 Other payment, based on laws governing social security (pension from employment, accident insurance, or from giving up farming / business)   
B3 Pension, not retirement from work, paid by the Social Insurance Institution of Finland (KELA) or State Treasury   
B4 Contract-based pension, regarded as earned income (e.g. Based on a voluntary individual retirement pension contract made by employee or employer) 
B5 Pension earned in a public corporation engaged in business  
B7 Pension other than B1 to B5 or B8 (e.g. Based on motor insurance contract or other risk insurance contracts) 
B8 Contract-based pension, regarded as capital income (e.g. Pension based on a voluntary retirement pension contract made by employee)   
B9 Pension based on a voluntary individual contract, taxable as capital income with 20% added 
B0 Pension/other payment based on a voluntary individual contract, taxable as capital income with 50% added.

Social benefits

AE Social benefit (subject to tax at source)

Use the AE Type of Payment if tax at source was collected and the payment went to a nonresident (e.g. a payment of student grant, unemployment relief, maternity/paternity allowance).

RE Social benefit, subject to withholding, paid to a nonresident

Use the RE Type of Payment if tax was withheld as instructed on the beneficiary's tax card and the payment went to a nonresident (e.g. a payment of student grant, unemployment relief, maternity/paternity allowance).

Payments of interest

C2 Interest on a deposit
C3 Interest on bonds and debentures or a paid aftermarket bonus
C4 Annual investment fund profit
C5 Other interest
C6 Interest for which no beneficial owner is reported  
        However, always use C2 for deposits that earn interest.
C7 Interest on the assets placed in a Long-term savings contract.

Other

D1 Other payment, such as a scholarship, benefit (settlement) from a life insurance policy, payment of wages on behalf of a bankruptcy estate "palkkaturva", etc. 
D2 Yields on the assets placed in a Long-term savings contract.

Payments of dividends and profit surplus

For further instructions, see Payments of dividends, interest and royalties to nonresidents.

E1 Dividends of direct-investment character within the meaning of the Parent-Subsidiary Directive or a tax treaty  
E2 Dividends, if the share is nominee-registered, but its actual beneficiary i.e. the actual shareholder, is reported on the annual information return
E3 Other dividends, if the share is nominee-registered and a simplified procedure is followed for purposes of reporting, so as to report the identity of the account operator, or the identity of the actual beneficiary is not reported and a non-adjusted amount of tax has been withheld.

If a source tax was collected using the general rate, and the true beneficiary's details are not being reported (Type of Payment E3), enter the name and address of the foreign asset management firm in the name and address fields.

The Finnish Business ID is mandatory information if E3 Payments were made to a foreign custodian with a Finnish Business ID registered in the Foreign Custodian Register.

If you have refunded some source tax collected on the dividends, the payment must only be reported as E5 Type of Payment.

E4 Other payment of dividends than E1, E2 or E3; and payment of profit surplus of a cooperative enterprise.

E5 Payment of dividends, to a final beneficiary, if the tax has been refunded by the payer.

The E5 Type must be used instead of E3 if refunds of withheld source tax on dividends have been carried out. Thus, only the remaining amount of withheld source tax is to be reported in connection with the reporting of this payment as an E5 Type of Payment.

E6 Dividends yielded on assets placed in a Long-term savings contract. The above Types of Payment must be used additionally for any distributions made by cooperative societies.

Any distributions from the unrestricted corporate equity are treated the same way as distributions of dividends, and consequently, the above Types of Payment must be used.

Long-term savings transactions and payments (on Individual Retirement Accounts)

Reporting inbound payments based on Long-term savings contracts

When a nonresident Long-term savings account holder has deposited money in the course of the reporting year, the account operator must file the annual information return with the data format specification VSELVAKE — Annual information return to be submitted by insurance companies and 'ps' service providers: premiums of individuals' voluntary pension insurance contracts and deposits to individual retirement accounts. Only e-filing is possible, because there is no paper-printed form.

Using Form 7809e to report the yields based on Long-term savings contracts

When a nonresident Long-term savings account holder has received yields or returns on his or her investment, the account operator must report them every year. They may consist of dividends, interest and capital gains and other types of yields, and the account operator should report them under their usual Types of payment such as C7, D2 or E6. Finland will not levy tax on them, but the information will be sent forward to the nonresidents' countries of tax residence.

When a nonresident beneficiary has had receipts of dividends, reported as E6 Types of payment, the Form 7812 and its line 24 must also be completed and submitted.

Using Form 7809e to report the outbound payments of Long-term savings

When a nonresident Long-term savings account holder receives benefits after the savings period is over, the account operator must file an annual information return and use the Types of payment P4 — P7 on Form 7809e. When the raised tax rates connected with the P6 and P7 Types of payments are being reported, only report the amount without the raise, because the Tax Administration will apply the higher rate of tax when carrying out  the assessment of the nonresident's income taxes.

P4 Payment related to a long-term savings agreement, taxable as earned income

P5 Payment related to a long-term savings agreement, taxable as capital income

P6 Payment related to a long-term savings agreement, taxable as capital income and adjusted by 20% increase

P7 Payment related to a long-term savings agreement, taxable as capital income and adjusted by 50% increase.

17 Gross pay amount as the basis for taxes

Enter the amount (of income, such as wage income, pension income or dividend income) from which the withholding tax (or tax at source) has been withheld or from which it would have been withheld, had there been no exemption on the basis of a bilateral tax convention, an EU Directive, or internal legislation. Enter the total € amount of cash wages (19) and benefits (20) added  together. This total is the base of the employer's health insurance contributions unless the employee is covered by the social system of another country — not Finland — or unless the international treaty on social security should provide otherwise.

Example: During five months of work, the employer paid the worker €20,000 in cash, and additionally, gave the worker a telephone as a fringe benefit, valuated at €100 for the 5-month period or at €20 per month. Furthermore, the employer paid him €500 in tax-exempt per diems. The worker’s tax-at-source card has defined a 35-percent rate, and he has been entitled to the monthly €510-deduction, which for five months equals €2,550. The amount from which the payer should collect tax is the sum total of cash wages and fringe benefits, adjusted by the monthly €510-deduction (€20,000 + €100 – €2,550 = €17,550).

Line 16 — Type of payment: wages   
Line 17 — enter €20,100
Line 18 — enter €6,142.25   
Line 19 — enter €20,000   
Line 20 — enter €100   
Line 21 — enter €2,550

As for payments falling into the Types B9, B0, P6 and P7, only report the amount without the raise, because the Tax Administration will apply the higher rate of tax when carrying out  the assessment of the nonresident's income taxes.

18 Taxes collected at source, or withheld as withholding tax

This line is for reporting the tax withheld / tax at source. Write nothing if you actually did not withhold the tax from your worker’s pay and did not pay it forward to the Finnish Tax Administration.

If you, as a foreign employer, have agreed with your worker that you pay and discharge his or her prepayments of income tax, i.e. pay the taxes on behalf of your employee, write nothing in line 18. The Finnish Tax Administration will automatically record the amounts paid. Note: line 18 is only intended for reporting the amounts of tax withheld at source, and it only concerns employers entered in the Finnish register of employers, who have actually withheld tax on their workers’ wages to pay it forward to the Finnish Tax Administration, following the instructions printed on individual tax cards.

19 Wages

Enter the amount of cash wages, i.e. the entire amount including the tax-exempt pay (21). Include any compensation or reimbursement of expenses not reported in line 22. While taxable per diem allowances and taxable reimbursements are included in wages, tax-exempt per diem allowances and reimbursements are not. For this reason, do not include the tax-exempt amounts reported in line 22.

The exchange rate of the day of payment applies to wages in other currency than euros.

20 Fringe benefits

Enter the correct tax value of the fringe benefits, less any compensation that the employee may have paid you. The Tax Administration issues annual official decisions that enumerate the current taxable values.

For more information on the valuation of benefits, go to www.tax.fi > fringe benefits.

21 Deduction for tax at source (€510 per month or €17 per day)

Enter the total of deductions, for the entire year, made from wages in accordance with § 6 of the Act on the Taxation of Nonresidents' Income and Capital (627/1978). This deduction requires A1, A2, A4, A9, AS, AM, AE or D1 Type of Payment.

When tax at source is being withheld, €510 per month should be deducted from the gross amount subject to tax at the 35-percent rate. If wages have accrued for a shorter time than a month, the deduction should be based on €17 per day. Nevertheless, the maximum deduction cannot be higher than actual gross wages. To justify this deduction, the worker is expected to show you a tax-at-source card with relevant instructions.

Example: The employee works in Finland 1 July — 15 August. Gross wages equal €3,000. He has shown his tax card to the employer. The printed text on the tax card says that tax should be withheld at source, and the deduction should be made.

In this example, before withholding, a deduction of €765 (€510 + 15 x €17) is applicable. Consequently, the employer should enter €765 in line 21. The amount from which the 35-percent tax at source is withheld is €2,235 (€3,000 – €765).  Consequently, source tax equals €782.25 (€2,235 x 35%).  In some circumstances, the printed text on the card specifies a rate below 35%.

Line 17 — enter €3,000  
Line 18 — enter €782.25  
Line 19 — enter €3,000  
Line 21 — enter €765

22 Per diems and reimbursements of costs

Employers may pay the same tax-exempt coverage to nonresidents as to residents.

The extent of the tax exemption is defined, separately for each expense type, in the Official Decision of the Tax Administration on travel allowance for the current year. For more information, go to www.tax.fi > .

If the employer has paid the exact price of a train fare, bus ticket etc (and e.g. the train ticket has been provided), this is a tax-exempt reimbursement that needs not be reported.

If the employer has paid amounts that are not in line with what is instructed in the Official Decision, as regards time limits and kilometres driven, no part of the reimbursement is treated as tax-exempt. Instead, it is treated as taxable pay and must be reported under 19 — Wages, not under 22.

If the employer has paid the reimbursement according to the rules of the Official Decision, but its amounts exceed the limits of tax exemption, one part of the reimbursement is taxable, the other part – exempt. The exceeding part is treated as taxable pay, which must be reported under 19 — Wages. Report the tax-exempt part of the reimbursement under 22.

Example: The employer has paid the total of €300 as per diems to his employee. According to what is provided in the Official Decision, the tax-exempt per diem would have been €200. Report the payment as follows: add €100 to the employee's pay in 19 — Wages. Enter €200 in 22.

23 Basis of insurance (premiums) for worker abroad

Private-sector wages paid out to a nonresident do not constitute taxable income in Finland. Nevertheless, if the worker is covered by the Finnish social security system, the insured party's health insurance premiums and health insurance contributions must be paid. Line 23 is for reporting the basis for figuring out the amounts of these contributions. If no such basis has been agreed, employer’s contributions are computed as percentages of actual gross wages. 

Enter the gross income amount being the basis for insurance premium computation in situations where a person insured in Finland works outside Finland. 

24 Health insurance premium

Enter the collected health insurance premiums of the insured person. Line 24 concerns nonresident workers covered by the Finnish social security system.

If the nonresident has presented a nonresident's tax card (instead of a card for tax-at-source), the insurance premium is included in the amount withheld. In this case, do not enter it on line 24 because it is included in what you enter on line 18.

For more information, read the articles on www.tax.fi > Arriving in Finland.  

Do not report social contributions payable in the foreign country of tax residence.

26 Pension that has been reclaimed

Enter the amount of pension that has been reclaimed back by the payer. This field is intended for pension amounts that were originally paid out during 2016 or earlier.

27 Number of working days if Type of payment is A9

If the Type of Payment is A9, report the days (number of consecutive calendar days), including weekends and days off, relating to the employee's work period in Finland.

See the example above in this instruction.

29 Total pension and unemployment insurance premiums collected from the worker

Enter the total of premiums/contributions collected from the worker/employee.

If your employee must additionally pay pension and unemployment insurance to their country of tax residence, you are not expected to include it in your annual reporting.

ISIN code or product name (097)

Account operators must give this information electronically on the VSRAERIE flow. 

Enter the ISIN code or product name relating to the payment made.  Maximum length is 25 characters.  If you enter a name, you must truncate it at its end or beginning. It must provide easy identification of the product, fund name or payment.  If you make any corrections later, be sure to use the same name. Product name must be the same in the original filing and the correction.

If the dividends are for a nominee-registered share, add a line number after the ISIN code or product name in order to facilitate identification of the payments. The entry in this data element may also be a line number or another detail that uniquely identifies the payment, not necessarily an ISIN or a name.

Transaction code (049)

This code is for identifying transactions of payment to beneficiaries (of dividends or interest etc.). The code is generated by book-entry system’s software at the Central Depository of Securities. For this reason, it is not used on paper forms.

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