Filing and paying self-assessed taxes ‒ detailed guidance, 2018

This tax return is for giving the Tax Administration the required information on VAT, employer contributions and other taxes that you are expected to calculate and pay independently. The return is normally e-filed. The name of the paper form is Self-Assessed Tax Return. Paper filing is only allowed for taxpayers who have a special reason to do so.

Overview of the new rules effective from 1 January 2018

Rules concern the tax periods starting 1 January 2018.

Changes to self-assessment  came into force last year in 1 January 2017 including:

  • The name of the paper form is 'self-assessed tax return' (formerly 'periodic tax return')
  • 'Tax period' is the new term for 'filing period' or 'period of reporting and payment'.
  • New provisions apply to the periods. Read more: Applying for an extended tax period
  • The new name for 'social security contribution' is the employer's health insurance contribution.
  • Self-assessment must be filed electronically for the tax periods that begin on 1 January 2017 or later.  Log in to MyTax.   Filing and paying self-assessed taxes.
  • If you are an individual, estate or consortium with only a forestry operation, you do not have to file a VAT return if your tax period is the calendar year and there has not been any activity during an entire year.  However, if under the circumstances, you operate some other trade or business liable to VAT, or if the Tax Administration prompts you to file, you must file a VAT return. This rule already concerns the filing for the 2016 calendar year.
  • There is a new scheme for making corrections to mistakes on a tax return. To make a correction, you file a replacement return regarding the tax in question. You re-enter the full set of amounts regardning a sub-type of tax (or a similar set of information) as they should be. As you make corrections this way, your replacement return is used instead of the return you sent first. The first, original return is no longer valid. The new scheme based on replacements is also in use for tax periods ended prior to 1 January 2017.
  • The return has a new Reason for Correction section. You should fill it in to explain why a correction is being made to VAT or employer's contributions as of 1 January 2017.
    Making corrections to tax returns
  • If you filed and paid a too high amount of VAT, you cannot complete a refund request form as of 1 January 2017 to ask for a refund. If you filed a return where the VAT was too high or a refundable VAT was too low, you must put it right by submitting a replacement.
  • Asking for VAT relief continues to be the same as before, however, you can no longer fill out a specific request form. If you have not submitted the amounts that qualify you for the relief, you must submit a replacement VAT return that contains all the amounts for the tax period concerned.
  • If you are late in filing your self-assessment, we impose a late penalty i.e. same as before. 
    Late penalty charges on self-assessed tax returns.

People and businesses that must file self-assessed taxes

VAT returns must be filed by individuals, businesses, companies etc. that are

  • VAT payers operating a business
  • VAT payers who provide the usufruct of real property and have registered for VAT because of that
  • liable to pay VAT as a primary producer
  • buyers in certain VAT schemes (reverse charge, and intra-Community acquisitions)
  • liable to pay VAT for reindeer herding
  • foreigners with the obligation to complete a VAT return
  • a taxpayer group for VAT

People/businesses that must file employer's contributions (payroll withholding, health insurance, tax at source) are

  • employers paying wages on a regular basis
  • casual employers
  • payers of pension benefits
  • shipping companies paying wages treated as seafarer's income
  • sub-accounting units (because large employers with several business locations may have a number of sub-accounting units entered in the Tax Administration’s registers)

List of other self-assessed taxes and who files and pays them:

  • Lottery tax: party in charge of the event
  • Insurance premium tax:  parties in the insurance industry, liable to pay this tax.
  • Amount withheld from the purchase price for timber: the buyer
  • Amount withheld from a payment to a limited company, cooperative or other corporation: the payer of compensation, royalties
  • Amount withheld from interest and shares: the party paying the interest etc., liable to withhold tax on the payments under Income Tax Act
  • Amount withheld on dividends and cooperative surplus: the payer
  • Pharmacy tax: the party legally defined as liable to this tax (e-filing only)

Start and end dates of Tax Period

'Tax period' refers to the time for which you must file and pay the tax; in general the period length is a calendar month.

Your VAT tax period is the calendar year if you are:

  • an individual primary producer, or an estate or a consortium operating a primary production, or
  • a creator of works of art within the meaning of § 79 c, VAT Act, and you do not operate another trade or business liable to VAT.

Your tax period is always the year if you are a payer of Pharmacy Tax.

The periods can be different for reporting VAT than for reporting employer's contributions; the two do not have to be the same.

If annual turnover is low (low sales volume), tax period can be extended:

You can submit an application for filing and paying VAT and employer contributions with longer intervals if your net sales (=turnover) is max. €10,000.

You can submit an application for filing and paying VAT and employer contributions by the quarter if your net sales (=turnover) is below the threshold of €100,000. Nevertheless, casual employers cannot ask for extension.

For VAT filing and VAT paying by the calendar year: if your net sales (=turnover) is below the threshold of €30,000, you can ask for calendar yearly tax periods, only for VAT.

Extensions must be requested in writing, on a Form.

More information on tax periods.

Filing self-assessed taxes ‒ how and when to file the return

The self-assessed tax return must be filed electronically.

Filing and paying self-assessed taxes

You must file the return for each tax period that you have; period lengths may be the calendar month, the calendar quarter, and the calendar year. You can log in to MyTax to check your tax period.

When filing returns for each calendar month or for each calendar quarter, they must arrive to the Tax Administration by the 12th of the month. If the 12th were to fall on a Saturday, Sunday or other holiday, the due date is extended to the next business day. The Tax Administration treats a return as successfully filed when it has arrived.

If your tax period is a calendar month, follow this filing plan:

  • employer's contributions must be filed by the 12th of the month that comes after the month of wage payments. An employer who pays wages on a regular basis must file returns even if no employer's contribution payments are made. However, casual employers only have to file them for the months when they actually have paid wages.
  • VAT must be filed by the 12th of the second month after the tax period. For example, you must file and pay VAT for February on April 12.
  • If you are a payer of lottery tax, file it by the general due date of the second month after the tax period. For example, you must file and pay for February on April 12.

If your tax period is the calendar quarter, you must file and pay both employer's contributions and VAT by the 12th of the second month after the end date of a calendar quarter. For example, the return that relates to first quarter (January to March) must be filed the 12th of May at the latest.

The tax period for VAT can also be the calendar year. Then the last day to file is the last day of February in the following calendar year.

Note: if you file by the year, pay attention to the following:

If you have been a VAT payer and you go out of business mid-year, you are expected to file the self-assessed tax return and pay the VAT for the year up to the end date of the business.If you have had a longer tax period but it changes into a shorter one mid-year (or some time during a calendar quarter), you are expected to file the self-assessed tax return and pay the VAT for the usual tax period you have had so far, up to the last day of the month when the change of the tax period comes into force.

In the circumstances described above, the return must be filed and VAT paid no later than on the 12th of the second month after the month that the business has ended or the filing period changed. December is an exception from the above: if the business and a calendar-year period end in December, the deadline is the last day of February.

Payments of amounts withheld on seafarer's wages, and the filing of seafarers' payroll amounts have changed under the new rules, and the due dates are the same as for other employers' contributions. Accordingly, employers of seafarers with a monthly tax period must file and pay their taxes for the period by the 12th of the month that comes after the tax period. All payroll subject to withholding must be filed by the same due date on a single return, as an aggregate lump sum. The same applies to payroll amounts subject to tax at source.

Filing in advance

If one of the data fields on the return is showing a non-zero value (does not have to be a field for "amount payable" or "amount refundable") and the return is not a nil return (zero return), you can file employer's contributions in advance for the tax period immediately following the current period.

For example, if your tax period for employer's contributions is the month, the 3/2017 return (for which 12 April 2017 is the normal deadline) can be filed 1 February 2017.

Other than employer's contributions (such as VAT, insurance premium tax, withholding on the price of timber) cannot be filed in advance: the earliest possible time to file them is during the tax period.

For example, if your VAT period is a calendar month, the 3/2017 return (for which 12 May 2017 is the normal deadline) can be filed 1 March 2017.

Withholding on dividends and tax at source (type codes 92 and 39) can be filed max. 12 months in advance.

You can file a zero return for six months into the future.

Paying self-assessed taxes

Guidance on payments for self-assessed taxes

Detailed instructions

About you

Taxpayer`s name Registered business or association: the name entered in the Trade Register or the Register of Associations. Other taxpayers: full name.
Business ID or personal identity code This entry is required. If you have no Business ID, use your personal identity code. This code is needed to allocate the given information to the taxpayer concerned.
Date and signature Returns must be dated and signed. In e-filing, electronic identification replaces the signature.
Telephone number The telephone number of a contact person giving additional information if necessary.
Tax period

Indicate the reported tax period by its number:

  • If your filing period is a calendar month, enter (1-12). Example: Enter 3 for March.
  • If your filing period is a calendar quarter, enter (1, 2, 3 or 4). Example: if the tax period you are filing a return for is April-to-June, enter 2 for the 2nd quarter.
  • If your filing period is a calendar year, leave blank.
Year Indicate the year of the tax period, fill in all the four digits.

VAT

Tax on domestic sales by tax rate 
24%, 14% and 10%

Enter the VAT on domestic sales of goods and services by tax rate.

General rate = 24%.  Reduced VAT rates 14% and 10%.

Example 1: VAT taxable net sales are €19,310.00 (= tax base), the amount of 24% VAT equals 24% × €19,310.00 = €4,634.40.

Example 2: VAT taxable net sales subject to the reduced 10% VAT rate is €1,700.00 (= tax base), the amount of 10% VAT equals 10% × €1,700 = €170.00.

Also enter the VAT to be paid for the following reasons:

  • Goods and services taken into own use
  • Sale of fixed assets
  • Public subsidies directly linked to the selling price or quantity of the goods or services
  • Purchase of goods or services from a foreigner not registered for VAT in Finland (the reverse charge scheme)
  • Purchase of emission rights
  • Distance selling from other EU country to Finland, if the sales go over the threshold of €35,000 or if the seller is registered for VAT in Finland of the distance sales.

Do not report here the VAT…

  • …on sales of telecommunications or broadcast services and electronic services to consumers in another EU countries
  • …which is paid based on the reverse charge scheme, ad whichs is entered in the field ”Tax on services purchased from other EU Member States” or  ”Tax on purchases of construction services and scrap metal”.
Tax on goods purchased from other EU Member States

Enter the VAT on goods bought from other EU countries (intra-Community acquisitions).

"Intra-Community" means that you buy goods from a company registered for VAT in another EU country, and either the seller or the buyer orders the transport of the goods to Finland.

How to fill out the form:

  • Enter the value of the goods in Purchases of goods from other EU Member States  (the price paid)
  • Enter the VAT due for the goods in Tax on goods purchased from other EU Member States

To work out the amount of VAT, multiply the purchase price (excluding VAT) by the domestic VAT rate applied to the goods concerned. Itemize the sums computed for each VAT rate separately. (24%, 14%, and 10%).

If the intra-Community VAT is deductible for you, include it in "Tax deductible for the period".

Example: You have reported Intra-Community acquisitions amounting to €18,000. The VAT rate applied in this case is 24%. Enter 24% × €18,000 = €4,320.  This intra-Community VAT is deductible (in other words, you can include it in the appropriate line) according to the same rules on VAT deductibility as applied to goods bought in Finland..

For more information: Arvonlisäverotus EU-tavarakaupassa (in Finnish and Swedish)

Tax on services purchased from other EU Member States

Enter the VAT on services purchased from other EU countries to which the reverse charge provisions are applied in accordance with the general rule of sales between suppliers liable to VAT. When reverse charge is applied, VAT is payable in Finland.

The general rule governing the sales of services:

The country where the payer is located is the country where VAT is payable.  However, the general rule does not apply to the following service categories when services are sold to a business:

  • Services relating to land and property
  • Passenger transport
  • Renting out means of transport for a short term
  • Admissions to events, entertainment and cultural performances - including sports events, exhibitions, conferences, meetings or seminars; ancillary services such as payments for cloakrooms or similar facilities.
  • Restaurant and catering services
  • Travel Agent services.

Enter your purchases of services from other EU countries:

  • Purchases of services from other EU Member States (enter the purchase price)
  • Tax on services purchased from other EU Member States

The amount of VAT is the price excluding VAT multiplied by the VAT rate applicable. Write the total of various VAT rates (24%, 14%, and 10%).

Example: Purchases of services from other EU countries are €10,000. The standard VAT rate 24% is applied, and the amount of VAT is 24% x €10,000 = €2,400. The VAT is deductible under the same rules on VAT deductibility as are applied on goods bought in Finland.

More information: “VAT taxation on services sold to buyers outside Finland as of 2010 – Palvelujen ulkomaankaupan arvonlisäverotus 1.1.2010 alkaen (in Finnish and Swedish)

If the VAT is related to construction services that you have bought in Finland, or to employee-leasing contracts for construction work in Finland from a contracting party elsewhere in the EU, enter it in ”Tax on purchases of construction services and scrap metal (reverse charge)”. 

VAT on import of goods from outside the EU

Enter the VAT you must pay on import transactions.

The formula is: multiply the value of your imports (the base for your VAT-on-import) by the VAT rate. If several VAT rates apply, you must add the VAT together (representing 24%, 14% and 10% rates) and enter the sum total.

You must report the amounts for the calendar month when the customs decision was issued. That month is the month of the customs clearance date, printed on the decision.

You must record the VAT deduction in the same month. Enter it in “Deductible for the tax period”. You cannot deduct any VAT unless you purchased the goods for a VAT-taxable business purpose.

If the importation is handled by Finnish Customs and its VAT value does not go above €5.00, you don’t have to pay it. However, for importation handled by and reportable to the Finnish Tax Administration, no 5-euro threshold is applicable, so you must give details on all your imports (§101, VAT Act).

Import activities operated in Finland may be exemptible from VAT (under §94–§96, and §72h, VAT Act). However, for these imports also, you must report the VAT base values in “Imports of goods from outside the EU”. But you should not enter anything in “Tax on imports of goods from outside the EU” and “Deductible for the tax period”.

If Customs Finland were to change its decision and alter the VAT base and other facts that affect your tax liability, you must enter corrections to your VAT return accordingly. You would have to file a replacement return for the tax period concerned.

Illustration: Your business enterprise enters €80,000 as Imports of goods from outside the EU. The goods are in a category for which the VAT rate is 24%. Enter the VAT, which is €19,200 ( = 24% x €80,000). You are allowed to deduct this VAT in the same way as you deduct the input VAT when you have bought goods in Finland. In other words, you are expected to include it in the VAT deductible for the period. This requires that the purchase is for an acceptable purpose.

It is within the jurisdiction of the Finnish Tax Administration to demand that the special VAT scheme governed by §100a, VAT Act be applied on the taxpayer’s import operation. This means that the business enterprise would not receive the goods from Customs until the VAT return is filed and the VAT payment made. In these circumstances, you must report VAT in advance of the tax period’s usual deadline date for VAT return filing. Enter the VAT for the calendar month when the liability to pay it came about; this means the month when Customs accepted the customs declaration (the date of the customs decision). File the tax period’s normal VAT return as a “replacement return” – and do it by the usual deadline date.

Read more: “Import VAT as of 1 January 2018” – Maahantuonnin arvonlisäverotusmenettelystä 1.1.2018 alkaen

Import operations between Åland Islands and mainland Finland

Finnish Customs does not issue customs decisions on import transactions between these territories because no customs duties are being levied. However, the VAT on these transactions must be reported on the return filed for the calendar month when you had submitted the sales invoice or bill-of-lading to the Customs office.

In the same way, Finnish Customs does not determine values for the goods’ customs clearance in connection with import operations between Åland Islands and mainland Finland when the Tax Administration is in charge of the duties. In these circumstances, the taxpayer is expected to determine the customs value independently.

Read more: “Tax border between Åland and the rest of Finland” – Ahvenanmaan veroraja

Tax on purchases of construction services and scrap metal (reverse charge)

Enter the tax for any purchases of construction services that are subject to reverse-charge VAT.

Enter the purchases of construction services as follows:

  • All buying under the reverse-charge scheme must be entered in "Purchases of construction services and metal scrap" Enter the price paid for these purchases.
  • The VAT that must be paid on these must be entered in "Tax on purchases of construction services and scrap metal". To work out the tax, multiply the net price by the 24-percent tax rate of VAT. Also enter any VAT to be paid for employee leasing fees serving construction activities (reverse charge).
  • Although your company would not be a seller of construction services, you must enter the VAT and the purchase prices in the "Tax on purchases of construction services and scrap metal" and "Purchases of construction services and metal” fields if the sellers were foreigners but the construction work relates to real estate in Finland and for which you as the buyer (under §9, VAT Act,) pay the tax.

Read more: Rakennusalan käännetty arvonlisäverovelvollisuus (in Finnish and Swedish)

Enter your metal scrap purchases as follows:

  • All buying under the reverse-charge scheme must be entered in "Purchases of construction services and metal scrap" Enter the price paid for these purchases.
  • The VAT that must be paid on these must be entered in "Tax on purchases of construction services and scrap metal".
  • If you buy the metal from another EU country and this is treated as intra-Community trading, enter the VAT in "Tax on goods purchased from other EU Member States".

Read more: Metalliromun ja -jätteen myynnin käännetty arvonlisäverovelvollisuus (in Finnish and Swedish)

Tax deductible for the tax period

Enter the total amount of VAT deductible for the period.

'Tax deductible' refers to input VAT on goods and services purchased for the purposes of a VAT deductible, taxable business.

Examples of deductible VAT for business purposes:

  • Input VAT included in a domestic purchase
  • The VAT on purchase of goods from other EU countries i.e. tax payable on Intra-Community acquisitions
  • Import VAT i.e. the VAT on imported goods (= purchases from outside the EU, including Åland Islands)
  • The VAT on purchases in Finland where the reverse charge mechanism is applicable, when the seller has been a foreigner not liable for VAT
  • The VAT on purchases of construction services and scrap metal, where the reverse charge scheme is applicable
  • The VAT on purchases in Finland of rights to emit industrial pollution.
  • The VAT on purchases in Finland having to do with sales of telecommunications or broadcast services and electronic services when the VAT taxable person is registered for VAT Special Scheme (M1SS) in another EU country and is also registered for distance sales in Finland.

VAT is deductible only for the part the goods and services are used for the purposes of VAT-taxable business. It is not deductible when restrictions of the right to deduct are applied to the goods and services used. Nor does the use for private purposes qualify for deduction.

For more information: Vähennysoikeuden rajoitukset (in Finnish and Swedish)
VAT Special Scheme
Guidance on deductibility (in Finnish and Swedish)

Amount of VAT relief If you are entitled to the relief, enter its amount.

Read more: How to report VAT relief information

Tax payable / Tax that qualifies for refund (-) The end result of the VAT computations for the tax period.
  • First add the domestic-selling VAT,
  • the VAT for your EU purchases of goods, and for services, and the VAT for purchases of construction services and scrap metal.

The sum you get must then be adjusted; deduct the deductible VAT from it, and then subtract any relief from it (if you are entitled to VAT relief).

If the calculation results in a negative figure, enter a minus sign.

The Tax Administration makes an entry into your VAT account.

When you file a Tax that qualifies for refund, it will not affect your MyTax balances until the Tax Administration has approved it.

Turnover taxable at zero VAT rate

Report the sales taxable at the zero VAT rate for which you are entitled to deduct the input VAT. Examples of such supplies (=sales):

  • Sales of goods to a destination outside EU, e.g. to Norway or from mainland Finland to the Åland Island
  • Sales of goods, including installation or assembly, to a destination in another EU country
  • Tax-free sales to travellers
  • Tax-free sales to diplomats and international organisations
  • Tax-exempt sales of warehoused goods
  • Tax-exempt sales of print runs of membership bulletins to nonprofit organisations
  • Sales of tax-exempt vessels and of work on such exempted vessels
  • Sales of services performed in EU territory or outside which are not reported as Selling of services to EU, such as construction services sold to a real estate situated e.g. in Norway or in Sweden.
  • Sales of goods in EU territory or outside if it is taxed in another EU country or taxed in a non-EU country; for example, the selling of goods in the Russian Federation.
  • Sales of telecommunications or broadcast services and electronic services to consumers in another EU country.

Do not include:

  • The VAT-exempt sales for which you are not entitled to deduct the input VAT. Such as healthcare and medical services and social services.
  • What you report as "Sales of goods to other EU countries"
  • What you report as "Sales of services to other EU countries" under the general rule (in reference to §65, VAT Act) Government subsidies of any kind, including agricultural
 
Sales of goods to other EU Member States

Report the total of your Intra-Community selling, which means the sales of goods to other EU countries to VAT-liable buyers. The goods must be physically transported from Finland to another EU country.

The amount of the sales is the price based on an agreement between the seller and the buyer including all surcharges and transportation costs that the seller has charged from the buyer for the delivery.

Transfer of goods to another EU country for selling is also treated as Intra-Community sale. For example, the value of goods transported from Finland to Germany in order to sell them is reported here.

In the case of triangulation, do not report the second supply on the Self-Assessed Tax Return. You must report it on the VAT EU Recapitulative Statement only.

Cross-border sales to consumers in other EU countries are not regarded as tax-exempt Intra-Community sales. Instead, they must be reported as domestic sales. The supply of a new means of transport to a private person in another EU-state is always regarded as an Intra-Community sale, which is reported in the "Turnover taxable at zero rate" field.

For more information: Arvonlisäverotus EU-tavarakaupassa (in Finnish and Swedish)

Note: intra-Community sales of goods must be also reported monthly on the VAT Recapitulative Statement. This filing must only be made for the calendar months when you have had sales of goods to other EU countries. Submit the recapitulative statement electronically no later than the 20th of the following calendar month. Example: For EU sales of goods for March, the deadline is 20 April.

Read more: "How to submit VAT EU Recapitulative Statement"

If you file the Recapitulative Statement late, a penalty charge is imposed.

For more information on penalty charges, see "Late penalty charges on self-assessed tax returns" – Seuraamusmaksut oma-aloitteisessa verotuksessa

Sales of services to other EU Member States

Enter the sales of services, to other EU countries to VAT-liable buyers, which under the general rule on sales from one VAT taxpayer to another are taxable in the buyer's country (another EU country than Finland). Enter the total value of the sales. Applying reverse charge, the buyer must pay VAT in that country.

If the sales of such services is exempt from VAT in the other EU country concerned, do not enter your sale in this field. Use "Turnover taxable at zero rate".

The general rule governing the sales of services: The country where the buyer is located is the country where the VAT is payable.

The general rule does not apply to the following service categories when services are sold to a business. Do not enter the sales of the following here:

  • Services relating to land and property
  • Passenger transport
  • Renting out means of transport for a short term
  • Admissions to events, entertainment and cultural performances - including sports events, exhibitions, conferences, meetings or seminars; ancillary services such as payments for cloakrooms or similar facilities.
  • Restaurant and catering services
  • Travel Agent services.

This field is not for reporting sales to consumers or to business operators, liable to pay VAT, who are taxed in other EU countries under special provisions, other than the general rule.

The value of the sales is the price based on an agreement between the seller and the buyer including all surcharges and costs that the seller has charged from the buyer for the delivery of the service.

For more information: "VAT taxation of services sold to buyers outside Finland as of 2010" – Palvelujen ulkomaankaupan arvonlisäverotus 1.1.2010 alkaen (in Finnish and Swedish)

Note: You must also file a buyer-specific VAT EU Recapitulative Statement for these sales of services. Only file for the months when you have had sales. The due date for filing it is the 20th of the following calendar month. Example: you must file the Statement by April 20 for the sales of services in March.

Read more: "VAT Recapitulative Statement"

If you file the Recapitulative Statement late, a penalty charge is imposed.

Read more: "Late penalty charges on self-assessed tax returns"

Purchases of goods from other EU Member States

Enter the total price paid of goods bought in other EU countries than Finland (your intra-Community acquisitions); also include any intra-Community acquisitions that are exempt from VAT.

'Intra-Community acquisitions' means that you buy goods from a seller registered for VAT in another EU country and either the seller or the buyer orders their transport to Finland.

Although you are entitled to deduct the input VAT of the Intra-Community acquisition, the purchase of goods and the VAT must be reported as follows:

  • Purchase price total of goods bought in other EU countries.
  • The VAT on them in the "Tax on goods purchased..." field.
  • If the purchase entitles you to a VAT deduction, enter the VAT in "Tax deductible for the tax period".

Fill in the "Purchases of services from other EU Member States" as appropriate.

For more information, click Arvonlisäverotus EU-tavarakaupassa (in Finnish and Swedish)

Purchases of services from other EU Member States

Enter the total price of services bought from other EU countries to which the reverse charge mechanism applies under the general rule that governs the selling of services from one business to another, and you must pay the VAT on these services in Finland. Enter the total of such purchases here, the tax on them in the field "Tax on services purchased from other EU Member States", and if it entitles you to deduction, enter the VAT in "Tax deductible for the tax period".

Do not enter the following:

  • If the service you bought is exempted from VAT under the general rule (such as services performed on tax-exempted vessels)
  • If you have bought employee leasing services for the construction sector (reverse charge), only use the "Purchases of construction services and metal scrap" field.
  • Because the general rule does not apply to the following service categories, do not enter them:
    • Services relating to land and property
    • Passenger transport
    • Renting out means of transport for a short term
    • Admissions to events, entertainment and cultural performances - including sports events, exhibitions, conferences, meetings or seminars; ancillary services such as payments for cloakrooms or similar facilities
    • Restaurant and catering services
    • Travel agent services.

For more information, Palvelujen ulkomaankaupan arvonlisäverotus 1.1.2010 alkaen (in Finnish and Swedish).

For purchases of goods from other EU countries, use the field "Purchases of goods from other EU Member States". 

Imports of goods from outside the EU

Enter the total of what was imported from outside the EU. This is your VAT base. The usual formula for the base is customs value plus the goods' loading, freight, unloading, insurance, other importation expenses plus taxes going to the State of Finland and the EU, customs duties, import duties and others with the exception of VAT (under §91, §93 and §93a, VAT Act). Finnish Customs determines the value in accordance with the Customs Code of the EU (§88, VAT Act).

You must report the amounts on the VAT return for the tax period when the customs decision was issued. This date is the customs clearance date, printed on the decision.

You must record the VAT deduction in the same month. Enter it in "Deductible for the tax period". The deduction cannot be made unless the purchase of goods was for a VAT-taxable business purpose.

If the import transaction entitles you to deduction, you must report it and the VAT on it in the following lines:

  • Imports of goods from outside the EU (indicate the customs value on the decision)
  • Tax on imports of goods from outside the EU
  • Tax deductible for the tax period (if you are entitled to deduct it).

Import activities operated in Finland may be exemptible from VAT (under §94–§96, and §72h, VAT Act). However, for these imports also, you must report the VAT base values in "Imports of goods from outside the EU". But there's no need to enter anything in "VAT on import of goods from outside the EU" for them.

If Customs Finland were to change its decision and alter the VAT base and other facts that affect your tax liability, you must enter corrections to your VAT return accordingly. You would have to file a replacement return for the tax period concerned.

Illustration: Your business enterprise enters €80,000 as Imports of goods from outside the EU. The goods are prosthetic dentures, exempted from VAT on import (under §36.3 and under §94–§96, VAT Act). You must enter the base in "Imports of goods from outside the EU" but not enter anything in "Tax on imports of goods from outside the EU" and "Deductible for the tax period".

It is within the jurisdiction of the Finnish Tax Administration to demand that the special VAT scheme governed by §100a, VAT Act be applied on the taxpayer's import operation. This means that the business enterprise would not receive the goods from Customs until the VAT return is filed and the VAT payment made. In these circumstances, you must report VAT in advance of the tax period's usual deadline date for VAT return filing. Enter the VAT for the calendar month when the liability to pay it came about; this means the month when Customs accepted the customs declaration (the date of the customs decision). File the normal VAT return for the tax period as a replacement return by the usual deadline date.

Read more: "Import VAT as of 1 January 2018" – Maahantuonnin arvonlisäverotusmenettelystä 1.1.2018 alkaen

Import operations between Åland Islands and mainland Finland

Finnish Customs does not issue customs decisions on import transactions between these territories because no customs duties are being levied. The VAT on these transactions must be reported on the return filed for the calendar month when you had submitted the sales invoice or bill-of-lading to the Customs office.

In the same way, Finnish Customs does not determine values for the goods' customs clearance in connection with import operations between Åland Islands and mainland Finland when the Tax Administration is in charge of the duties. In these circumstances, the taxpayer is expected to determine the customs value independently.

Read more: “Tax border between Åland and the rest of Finland” – Ahvenanmaan veroraja

Sales of construction services, sales of scrap metal
(reverse charge)

If you are a seller of construction services, report their total value sold, i.e. the value treated by the reverse-charge scheme.

Read more: Rakennusalan käännetty arvonlisäverovelvollisuus (in Finnish and Swedish)

Guide: (in Finnish and Swedish)

Report the total selling to which the reverse-charge scheme applies.

If you sell the scrap to another EU country as an intra-Community supply, do not enter it in this field

More guidance (in Finnish and Swedish):

Metalliromun ja -jätteen myynnin käännetty arvonlisäverovelvollisuus

Guide: Metalliromun myynnin käännetty arvonlisäverovelvollisuus lyhyesti

Metalliromun myynnin käännetty arvonlisäverovelvollisuus – usein kysyttyä

Purchases of construction services, purchases of scrap
metal (reverse charge)

Report the total amount of construction services purchased, to which VAT reverse charge applies.

Also include any purchases made that are connected with your leasing of employees for construction work (reverse charge).

Although you may be a company that does not habitually sell construction services, you must still report any construction services bought from foreigners, under reverse charge (§ 9, VAT Act), that relate to real estate located in Finland. Use this field and the "Tax on purchases of construction services and scrap metal" field.

More information (in Finnish and Swedish)

 

Rakennusalan käännetty arvonlisäverovelvollisuus

Enter the total amount of scrap purchased, to which VAT reverse charge applies.

If you make the purchases elsewhere in the EU, as an intra-Community acquisition, report them as purchases of goods from other EU Member States in the appropriate fields. Do not enter them here.

More information (in Finnish and Swedish)

Metalliromun myynnin käännetty arvonlisäverovelvollisuus lyhyesti

If you have no operations subject to VAT during your tax period

If you are VAT-registered, you must file the self-assessed taxes even if your VAT operation is seasonal, temporarily closed, or interrupted for several tax periods.

Nevertheless, you may report "No VAT Activity" in advance. If you have not had any operations subject to VAT, enter zero in "Tax payable / Negative tax that qualifies for refund". The maximum length of filing a zero return is six months. This concerns VAT, payroll, and insurance premium taxes.

The way to file a "Not Active" report in MyTax is to select the "No Activity/wage payments" specifically for each tax period.

When you reported that you are not active, there is no need to file VAT (for the periods you reported). However, if the situation changes and you do have a transaction liable to VAT, you must file the return for that tax period.

  • If your tax period is the calendar month, the maximum length of filing a zero return is six months in advance. If your tax period is the calendar quarter, the maximum length is two quarters.
  • If you have gone out of business or at least terminated your VAT operations, you should file a Notification on termination of business (available at www.ytj.fi). Do not forget to add the VAT on your final balances of inventory and accounts receivable when you submit the VAT return for your final tax period.

Note: If you still have any sales subject to the zero rate of VAT and are entitled to VAT deductions, enter it in "Turnover taxable at zero VAT rate". In this case, you must not file a zero return.

Read more on termination of VAT taxable operations

How to report VAT relief information

Turnover that qualifies for VAT relief

Note: Do not enter anything in this field unless you are a taxpayer entitled to the relief scheme.

The threshold values for the relief were raised as of 1 January 2016. The base threshold is now €10,000 (old threshold: €8,500) and the higher threshold is now €30,000 (instead of €22,500). This concerns accounting periods that have started 1 Jan 2016 or later.

The entire VAT for the 12-month accounting period is relieved if your turnover is €10,000 or lower. If it is between €10,000 and €30,000, you are entitled to a partial relief.

For accounting periods with start dates prior to 1 January 2016 the corresponding thresholds are €8,500 and €22,500.

No separate application form is needed. However, if you already filed your VAT for the tax period for which relief can be paid but you did not include that information, you must file a replacement return (complete with the usual VAT amounts and your VAT-relief information).

Information must be submitted as follows:

  • If your tax period is the calendar month, include your VAT relief information in the return for the month when your accounting period closes and include the qualifying net sales for the entire accounting period.
  • If it is the calendar quarter, include your VAT relief information in the return for the last quarter of the calendar year and include the qualifying net sales for the entire calendar year.
  • If it is the calendar year, include your VAT relief information in the return for the calendar year and include the qualifying net sales for the entire calendar year; follow the rules effective from 1 Jan 2016.

Note: Under § 216 of VAT Act, your accounting period is considered as be the calendar year if your filing period is Quarterly or Yearly.

How to calculate the sales that qualify for VAT relief?

When summing up the sales that qualify for VAT relief, deduct from the taxable sales (excluding VAT) and the sales that are subject to reverse-charge VAT (§ 8a – 8d, Vat Act) any forestry sales and transfers of rights to immovable property (§ 30, VAT Act), and sales of fixed assets. The net sales cannot include any tax-exempt government subsidies such as area-based subsidies paid to farmers.

Add the revenues from the following VAT-exempt sales to the result of the above calculation:

  • Sales of goods to other EU-countries (intra-Community supply, §72a–72c)
  • Export sales (§70)
  • Tax-exempt sales to travellers (§70b)
  • Sales of any other VAT-exempt services within the meaning of § 71 and §72, VAT Act
  • Sales of VAT-exempt vessels and work on them (§58)
  • Exempt sales of print runs of membership bulletins published at least four times a year to nonprofit organisations (§56)
  • Exempt sales to diplomats and international organisations (§72 d)
  • Exempt sales of motor vehicles (§72 e)
  • Sales of financial and insurance services, other than those of ancillary nature
  • Disposals of real estate or associated rights (unless the provisions of §30, VAT Act are applicable)
  • Sales of construction services under the VAT reverse-charge scheme (§8c)

Note: If you ask for relief for a non-12-month accounting period, enter an adjusted turnover figure in "Turnover that qualifies for VAT relief" so as to reflect 12 months: Multiply your actual turnover by 12, then divide it by the number of full calendar months of the accounting period concerned.

Read more:

Arvonlisäveron alarajahuojennus (acc. period start date 1 Jan 2016 or later)

Arvonlisäveron alarajahuojennus (acc. period before 1 Jan 2016)

Tax that qualifies for VAT relief

You must work out the difference between the VAT on your sales and the sum of VAT deductible for your purchases. Calculate the tax that qualifies for VAT relief as follows. Deduct from the tax payable (= difference between the tax on domestic sales and deductible VAT) the following amounts:

  1. VAT payable on forestry operations
  2. VAT on any transfer of rights to use immovable property within the meaning of Section 30, VAT Act)
  3. VAT on any sales of fixed assets
  4. VAT that the buyer must pay (Sections 2a, 8a–8c, 9, VAT Act) (reverse charge)
  5. VAT on any intra-Community sales of goods or services.

(This means the VAT relief calculation cannot include the VAT amounts for sales if they relate to items 3–5 above.).

Read more:

Arvonlisäveron alarajahuojennus (acc. period start date 1 Jan 2016 or later)

Arvonlisäveron alarajahuojennus (acc. period before 1 Jan 2016)

Calculating the VAT relief for an accounting period
with a start date 1 January 2016 or later

Amount of VAT relief must be reported on the return before reporting "Tax payable/Tax that qualifies for refund".

Use the formula below to work out the amount of VAT relief, and then enter it in this field.

If turnover is €10,000 or less, you should not use the formula. The amount of relief equals the qualifying VAT in this case. In other words, the company would recover all of its paid-in VAT as VAT relief.

If your turnover goes over the threshold of €10,000 use the formula:

tax –  (turnover – 10 000 e) x tax
             20 000 e

The formula has 'turnover', which means qualifying sales only; similarly, 'tax' in the formula means the amount that qualifies for relief.

Illustration: calculating the VAT relief for a small business
The business has the calendar year as its accounting year. Its taxable domestic turnover amounts to €9,000 (VAT €2,160), zero-rated export selling: €2,000 and intra-Community supply: €6,000.

The business sold fixed assets during the accounting period for €3,000 and is VAT liable under the reverse charge mechanism for €250. The VAT on deductible purchases amounts to €400 during the accounting period.

This business has €17,000 in net sales that qualifies for VAT relief (taxable selling, zero-rated exports, and intra-Community sales, no sale of fixed assets); Enter €17,000 in "Turnover that qualifies for VAT relief".

The amount of tax that qualifies for VAT relief is the difference between taxable domestic sales and deductible VAT for the accounting period, €1,760, which you must enter in "Tax that qualifies for VAT relief". The sales of fixed assets and the VAT liability under the reverse charge mechanism are not included.

Yrityksen alarajahuojennus lasketaan seuraavasti:

1 760 – (17 000 – 10 000) x 1 760 = 1 144

                         20 000

Enter €1,144 as the "Amount of VAT relief".

Calculating the VAT relief for an accounting period
before 1 Jan 2016

Use the formula found in the old guidance (including calculation examples) on VAT relief dated 17 June 2013 and effective until 31 December 2015.

Employer's contributions

Wages and other payments subject to withholding

Enter the following payments subject to withholding, made to beneficiaries during the tax period:

  • Wages, fees, salaries, social benefits, reimbursement paid to an individual in an employer/employee relationship (§13, Prepayment Act)
  • Fees for attending a conference, for giving lectures or speeches, for being a member of a board of directors or other similar councils, for work as a Managing Director, amount paid to a partner of a partnership company, and amount paid in compensation for acting in a position of trust (luottamustoimi in Finnish, förtroendeuppdrag in Swedish) (§13, Prepayment Act) .
  • Seafarer's income
  • Pensions, social benefits, insurance indemnity payments etc. (this also includes pensions paid to nonresident taxpayers)
  • Nonwage compensation (=trade income), royalties (§25, Prepayment Act)
  • Wages and fees paid to a sportsman, payments from a special fund
  • Amounts paid instead of wages (known as palkkaturva)
  • Amounts paid by a bankruptcy estate instead of wages (known as palkkaturva)
  • Wages paid by a substitute payer
  • Wages exempted from social security and health insurance premiums by virtue of a Social Security Convention or the EU/EEA Regulation.

Enter all the payments listed above regardless of the employer's health insurance contribution is being paid on them or not.

  • If all payments under "Wages and other compensation subject to withholding" are exempted from the contribution, enter zeroes in the "Wages subject to the employer's health insurance contribution" and "Health insurance contribution payable".

This field also intended for reporting any wages subject to withholding that an employer has paid to a nonresident beneficiary, and the wages (and other payments) must be reported annually on Form 7809e, the annual information return on payments made to nonresidents; use Codes AR, R2, R5, R6, RM and RE.

Annual information return on payments to nonresidents (7809e)

Report the amounts also when they are low and no withholding takes place, or when wages are paid in the form of fringe benefits only, or when the beneficiary's tax card indicates a zero rate of withholding.

If you are a household employer and haven't paid out more wages than €1,500 per calendar year and no withholding has been involved, you do not have to file a Self-Assessed Tax Return. However, if there has been any withholding, you must file it. When the wages paid out are above €200, you must file an Employer Payroll Report (annual information).

Read more:

Kotitalous palkan maksajana (in Finnish and Swedish)

Työnantajasuoritusten ilmoittaminen ja maksaminen - kotitaloudet (in Finnish and Swedish)

Amounts treated as wages

For tax purposes, the following compensation is treated as wages:

  • Amounts reflecting the taxable values of fringe benefits, such as company car, accommodation, meals, and other non-cash benefits.
  • Any amounts higher than the tax-exempt limits of allowances for travel expenses (if the employer has paid larger amounts than defined in the Official Decision of the Finnish Tax Administration on allowances for travell, the amount exceeding the limit is regarded as taxable wages).
  • Wages paid to employees during sick leave, even if compensation from Kela or an insurance company has been received for them.
  • Tips received by employees during their employment.
  • Employer-paid pension insurance premiums regarded as wages.
  • Additional daily sick-leave allowances financed by a sick-leave fund.
  • Insurance salary when applying the 6-month rule. If no insurance salary has been agreed on, actual cash wages
  • Benefits arising from employee stock options or employee loans.Fees paid for giving lectures, not based on employment relationship, fees for attending meetings, fees for giving lectures and speeches, fees for membership in the board of directors, regardless of whether pension insurance premiums are paid or not.
  • Severance pay in connection with termination of employment, other comparable indemnity amounts
  • Amounts reflecting profit sharing, within the meaning of Act governing employee-stockholders' funds (814/1989), paid to employees in cash

Compensation not treated as wages

  • Tax-exempt amounts within the tax-exempt limits of allowances for travel expenses under the Official Decision of the Finnish Tax Administration on allowances for travel.
  • Taxable reimbursement amounts for employee's expenses, paid without the obligation to withhold tax (e.g. for own tools, own telephone).
  • Tax-exempt fringe benefits given to all personnel (§ 67, § 69, Income Tax Act).
  • Amounts excluded from employees' wages before their payroll withholding is carried out (e.g., exclusion for chain-saw costs), therefore not subject to withholding.
  • Tax-exempt coverage for expenses, paid to a family caregiver

For more information, click: Employee or independent contractor – Guidance for payers.

Payments of nonwage compensation (trade income), royalties etc.

Nonwage compensation, i.e. "trade income" or royalties (compensation for use) paid to an individual or to a consortium, such as a general or a limited partnership, are subject to payroll withholding, except when the beneficiary is entered in the Prepayment Register. Enter these payments in this field. Please report gross amounts, including VAT, and travel costs that you have covered, if any.

To a limited company, cooperative enterprise or comparable entity:
nonwage compensation or royalties (compensation for use) are only subject to withholding if the beneficiary is not entered in the Prepayment Register.

Amounts withheld on these payments are to be reported in 'Other self-assessed taxes', using code 25.

Note: payments falling into the category of dividends must not be reported here. The only line where you can enter the withholding on paid dividends is the 'Other self-assessed taxes' section of the Tax Return, using code 92.

For more information, see the guidance on Other self-assessed taxes

Tax withheld

Enter the amounts you have withheld on:

  • Wages and salaries when paying them out.
  • Trade income i.e. nonwage compensation or royalties (compensation for use); if paid to physical persons, general partnerships, limited partnerships or other consortia.
  • Pensions (including pensions paid to non-resident taxpayers), annuities, social benefits strike allowances etc. when paid out.
  • Wages or fees paid to athletes, including the withholding on payments taken from a special fund, paid to nonresident beneficiaries, and also reported in "Wages and other payments subject to withholding".

Note: enter the withholding on payments of dividends in 'Other self-assessed taxes', using code 92.

Read more: Ennakonpidätyksen toimittaminen

Wages /other payments subject to tax at source

Enter the total of wages and other payments subject to tax at source paid to nonresident taxpayers during the reporting period. Enter the gross amount, do not deduct the amount referred to in § 6, Act on the Taxation of Nonresidents' Income.

Examples:

  • Wages subject to tax at source (for more information, see allowances for paid expenses)
  • Wages paid by a public corporate body
  • Compensation paid to a public entertainer, artiste or athlete for personal services performed (generally taxable at 15% rate or less, as indicated in the tax-at-source tax card)
  • Wages paid by foreign subsidiaries (or similar associated entities) to a nonresident employee working in another country, if the employee has Finnish social insurance coverage.
  • Benefit from employee stock options and stock grants, if based on work performed in Finland
  • Nonwage compensation, i.e. "trade income" (if paid to a corporate entity, it does not have to be reported unless subject to withholding of tax at source).
  • Payments subject to withholding, made to nonresidents, when these payments are not reported in "Wages and other payments subject to withholding".

However, enter the wages or salary (€5,800 or higher) paid to key employees (residents, too) within the meaning of the Act on Tax Withholding on the Compensation paid to foreign beneficiaries.

  • If a Finnish company pays wages to a nonresident who works in a foreign country, and who is not covered by social insurance in Finland, do not report it on the return. However, the Finnish company must file an Employer Payroll Report as usual.

Who is a nonresident taxpayer?

The following are nonresidents:

  • A foreign citizen staying in Finland for no longer than six months.
  • A Finnish citizen who lives in a foreign country may become a nonresident after three full calendar years after the year of leaving Finland, or when the person no longer has any substantial ties with Finland.

Payments of coverage for out-of-pocket expenses to nonresidents
If an individual's primary place of work is in a foreign country, and this individual is staying in Finland temporarily (e.g. lecturers and specialists), paid wages subject to tax at source do not have to include their allowances or reimbursement for travel, exempt from income tax under Income Tax Act, and in the case of seafarers, the tax-exempt allowance paid to seafarers. For more information the list above under the sub-heading 'Compensation not treated as wages'.

You must valuate the fringe benefits included in the wages you pay as instructed by the provisions of the Income Tax Act.

However, if an individual who is a nonresident works in Finland full time, in a retail store, office, or a factory etc., this place becomes his or her primary place of work. Therefore, no tax-exempt reimbursement for out-of-pocket expenses can be permitted.

If during the period, you only paid amounts subject to withholding of tax at source and nothing subject to ordinary withholding of taxes and contributions, you must enter zeroes in

  • "Wages and other payments subject to withholding",
  • "Tax withheld",
  • "Wages subject to the employer's health insurance contribution" and
  • "Employer's health insurance contribution payable".

 

Tax at source on wages etc.

Enter the following amounts:

  • The tax-at-source, withheld on wages and nonwage compensation, including amounts withheld from payments to a foreign corporate entity
  • The health insurance premiums withheld
  • The tax-at-source withheld from fees or wages paid to a public entertainer, artiste or athlete for the performance of personal services
  • The tax-at-source withheld from key-employee salary

Also enter any tax withheld on payments, subject to withholding, made to nonresidents and entered in "Wages and other payments subject to tax at source".

To calculate the tax-at-source, the base is the gross amount minus deductions pursuant to § 6, Act on the Taxation of Nonresidents' income, (€510 per month, or €17 per day).

Note: the tax-at-source that you withhold on payments of interest and royalties requires reporting under code 69 in the 'Other self-assessed taxes' section. Likewise, the tax-at-source on any dividends you pay requires reporting under code 39; on interest, under code 84.

Read more: Other self-assessed taxes

Wages subject to the employer's health insurance
contribution

Enter the wages and other payments on which you must pay health insurance, including:

  • The wages, salaries, fees and compensation listed in § 13, Prepayment Act; excluding those referred to in the Act governing health insurance, listed under the words "Palkaksi ei merkitä".
  • Additional sickness allowance paid by a sickness insurance fund within the meaning of the Act governing insurance offices.
  • Tip income, received by employees during their employment
  • Insurance salary when applying the 6-month rule. If no insurance salary has been agreed on, actual cash wages
  • Wages paid to a nonresident who is covered by the Finnish social security system (see Wages/other payments subject to tax at source)
  • The monthly pay of a key employee amounting to at least €5,800 (under the Act governing the tax at source collected from the wages of foreigners arriving in Finland)
  • Compensation paid to a nonresident artiste for their personal endeavour
  • Seafarer's income
  • Amounts paid as "pay security — palkkaturva"
  • Payments transferred to a special sportsmen's fund

Enter the wages even in cases where no withholding is carried out because the amount is low, because it only is paid in the form of fringe benefits, or because the rate is zero (due to a zero-rated tax card). Employer's health contribution must also be paid when no withholding is carried out.

Amounts for which the health insurance contribution is payable:

The following amounts are included in what is treated as wages:

  • Amounts reflecting the taxable values of fringe benefits, such as company car, accommodation, meals, and other non-cash benefits.
  • Any amounts higher than the tax-exempt limits of allowances for travel expenses (if employer has paid larger amounts than defined in the Official Decision of the Finnish Tax Administration on allowances for travel the excess portion is
  • regarded as taxable wages).
  • Wages paid to employees during sick leave, even if the employer has received compensation from Kela or an insurance company for these wage payments.
  • Tips received by employees during their employment.
  • Employer-paid pension insurance premiums regarded as wages.

Payments exempted from health insurance contribution

If the wages and other payments do not give rise to the contribution, enter zeroes in "Wages subject to the employer's health insurance contribution" and "Employer's health insurance contribution payable".

Amounts for which a health insurance contribution is not payable:

  • Wages to employees aged younger than 16; or 68 and older. The calendar month of the sixteenth birthday is the last month when these wages are not included, and similarly, the calendar month of the 68th birthday is the last month when they are included.
  • Amounts listed in Act on Sickness Insurance Chapter 11, Section 2.4 including collective employer-provided fringe benefits given to the entire personnel, even if this benefit were taxable as a fringe benefit.
  • Benefits arising from employee stock options or employee loans.
  • Benefits arising from other rights to buy stock or similar securities for a reduced price on the basis of employment
  • Wages payable for waiting time (§ 14.1, Employment Act)
  • Severance pay in connection with termination of employment, other comparable indemnity amounts.
  • Fees paid for giving lectures, not based on employer /employee relationships, fees for attending meetings, fees for giving lectures and speeches, fees for membership in the board of directors, if the law governing pension insurance does not prescribe that pension premiums are payable in the case.
  • Amounts reflecting profit sharing, within meaning of Act governing employee-stockholders' funds (814/1989), paid to employees in cash.
  • Amounts excluded from the employee's wages before payroll withholding is carried out (e.g. exclusion for chain-saw costs), thus not subject to withholding
  • Tax-exempt allowances for travel, if amounts have stayed within the tax-exempt limits under the Official Decision on travel expenses.
  • Wages paid by a substitute payer.

Nonresident workers who are covered by Finnish social insurance
The employer must pay social security contributions and withhold the worker's health insurance premium. A nonresident is covered by the Finnish social insurance system if he or she works on board a Finnish ship or arrives in Finland to work for at least four months, and is not a holder of the A1 Certificate or the E 101 Certificate (or similar documents) granted by home-country social authorities.

The employer does not have to pay social security and withhold health insurance if the sum of wages paid to the nonresident does not reach €1,173 per month (year 2016) or if the working hours are below 18 hours per week. For checking the 2017 values, click Sotu- ja sava-maksun määräytyminen ja verotus.

Even if the employee's place of work is not located in Finland, coverage by the Finnish social insurance system may exist on the basis of the following: The employee belongs to the aircrew of a Finnish airline company, or the employee lives in the EEA or Switzerland and is employed by a Finnish freight company and belongs to the personnel of the freight fleet. For more information, click: Sotu- ja sava-maksun määräytyminen ja verotus.

Health insurance contribution payable

The employer's health insurance contribution, net of adjustments.

  • The base for this contribution is the payroll total entered in the previous field. Multiply the total by the rate.
    For rates in force in 2018, go to Employer's contributions to be reported and paid to the Tax Administration
  • When you calculated the contribution you can adjust it by the following, if Kela or an insurance company has paid you reimbursement for maternity allowance or similar daily allowances for people on leave, you must adjust the contribution. To work out the adjustment amount, multiply the allowance by the rate of the contribution that you had used in the tax period when you paid the wages.

Submitting an excessive amount

Employers are entitled to compensation from Kela if they have paid wages but the worker receives Kela-paid daily allowance. If you reported a contribution amount that turns out to be too high, you must correct it by filing a replacement return for the same tax period. The simplified process of making corrections is an exception from this rule.

Employers are entitled to make a correction to a contribution payment that was too high by subtracting it from their next payment during the calendar year. See small mistakes.

Employers can do this independently after they have received the letter confirming the exact amount of a social benefit, of a compensation, etc.

Refunds of health insurance contributions are paid to employers in connection with coverage being paid to the them because their employees have received per diems, pensions and other benefits. For example, if an employer has paid wages to a worker who is on maternity leave, they can wait until Kela sends them a letter confirming the amount of the maternity benefit and then subtract the part of the paid-in health insurance contributions accordingly.

Illustration: - tax return submitted prior to 1 January 2017 - In August 2016, the employer had paid wages to a worker who later received a social benefit, which was confirmed in a letter received in February 2017 documenting the social allowances paid to this worker. The employer can now file a replacement return for December 2016, the final tax period for the year, with a complete set of employer's contribution amounts. The information return filed for 2016 must be corrected, too.

Illustration: Making corrections to a tax return submitted after 1 January 2017 as follows: the employer received money in February 2018 as a coverage for their payments of wages in May 2017, for which the worker was paid social allowances. Under the circumstances, the employer has paid too much in contributions. The employer can now file a replacement return for May 2017 with a complete set of employer's contribution amounts. The information return filed for 2017 must be corrected, too.

Errors in reporting the employer's health insurance contributions
If you made an error in your reporting, you must put it right. For more information, see Making corrections to submitted tax returns.
An example of an error on the tax return would be that you have reported €70 of health insurance contributions instead of €700.

Section 9 of the act on health insurance contributions

Section 25 of the Act on assessment procedure for self-assessed taxes (Laki oma-aloitteisten verojen verotusmenettelystä 768/2016)

Payroll is seasonal, no wage payments for a time

If you are registered as an employer paying wages regularly, you must you must file the self-assessed taxes for each tax period even if your payroll is seasonal and you only pay wages occasionally or your payroll is interrupted for several tax periods.

Nevertheless, you may report the interruption in advance. If no wages were paid during the tax period, enter zero as the amount withheld, the tax at source, and the health insurance contribution. The maximum length of filing a zero return is six months.

The way to file a "Not Active" report in MyTax is to select the "No Activity/wage payments" specifically for each tax period.

  • If your tax period is the calendar month, the maximum length of such reporting is six months in advance.
  • If your tax period is the calendar quarter, the maximum length is two quarters.

You do not have to submit a return for reported interruption periods unless you have paid wages.

If your company no longer pays wages or has gone out of business, you should file a Notification on termination of business (available at www.ytj.fi). However, you must file your tax return for the last period when you still are registered as an employer paying wages regularly.

Special groups of taxpayers

 

Accounting units

Large employers with several business locations may have a number of sub-accounting units entered in the Tax Administration's registers. These units must use their own Identity codes when filing their tax returns for employer's contributions. However, their VAT and other self-assessed taxes are reported with the main-company Business ID codes only.

The Tax Administration only uses the main-company account when entering the payments reported by sub-accounting units.

Shipping company paying wages treated as seafarer's income

There is no requirement to file a return for seafarer's wages or fees. Instead, similarly as for other payrolls, you must file and pay the withholding, taxes at source, and employer's health insurance contributions by the 12th of the second month after the end of the calendar month. Tax returns must be filed electronically. Filing and paying self-assessed taxes is easy in MyTax.

Account operators as filers

Account operators (such as banks taking care of dividend payments of a listed company) are entitled to submit self-assessed tax returns on behalf of their clients in connection with the following taxes:

  • 68 Amount withheld on interest and profit-shares paid out
  • 92 Amount withheld on dividends and cooperative surplus
  • 39 Tax at source on dividends
  • 69 Tax at source on interest and royalties
  • 84 Tax at source on interest income

The actual payers (e.g. listed companies paying dividends) must give a Letter of Authorisation to officially give permission to the account operator for tax-return filing. In such arrangements, the account operator's Business ID is included in each submitted return.

Municipalities, local church parishes and Kela (= recipients of taxes)

Instructions in Finnish and Swedish are available.

Other self-assessed taxes

Tax type code

Enter the code for the tax you are filing.

The codes are:

10 = Lottery tax
16 = Tax on insurance premiums
24 = Amount withheld from purchase prices of timber
25 = Amount withheld from payments to a limited company, cooperative enterprise or other corporation
68 = Amount withheld from interest paid out
92 = Amount withheld on dividends, and distributions of profit surplus by a cooperative society
39 = Tax at source on dividends and profit surplus (paid to non-residents)
69 = Tax at source on interest and royalties (paid to non-residents)
84 = Tax at source on interest income (paid to Finnish tax residents)
(40 = Pharmacy tax electronic filing is required always)

10 Lottery tax

The tax period is always the calendar month.

Due date for filing and payment is the 12th of the second month following the event for competitions, games and other events where either consumer goods or other benefits, including cash, are given out as prizes.

In this way, for an event organised in January, 12th March would be the due date for filing and payment.

Lottery tax is payable to the State of Finland for events organised in Finland. The taxable person is the operator or organiser of the lottery. If several bodies or persons share the work related to the operation or organisation, each one of them is responsible for ensuring that lottery tax is paid.

The concept of 'lottery' (Finnish: arpajaiset; Swedish: lotteri) refers to

  • Cash competitions or sweepstakes; non-money lotteries where consumer goods are given out as prizes; guessing games; bingo games;
  • 1x2 betting related to football; other betting and horse races;
  • Operation of slot machines that may give cash or consumer goods as prizes;
  • Operation of gambling games in a casino establishment

Act on Tax on Lottery Prizes always concerns these and any other events governed by Finnish legislation governing gaming activities. This Act also applies to temporary, one-time public competitions or sweepstakes, guessing games, betting, and other comparable events where random results will determine who will win money in cash or as noncash benefits. Nevertheless, a prize is taxable under other tax laws if it is a payment paid in exchange for goods or services, or as wages.

For more information: Taxation of lotteries, competitions, games.

16 Tax on insurance premiums

The tax period is always the calendar month.

File and pay the insurance-premium tax by the 12th of the month after the end of the calendar month (in other words, if a payment relates to June, file and pay it by 12 July).

Parties liable to this tax are the insurance companies that operate an insurance business in Finland. However, the policyholder (an individual or a company) may sometimes be liable to pay the tax. This may occur when the insurance premium is paid to the insurer that does not conduct insurance business in Finland.

The rate of insurance premium tax is 24%. Its base is the accumulated or paid-in insurance premiums (sections 3 and 4 of the Act on the Tax on Insurance Premiums). In fire insurance, the fire protection fee of 3% is also considered when the basis for the tax is determined.

Further information: Guidance on tax on insurance premiums

24 Amount withheld from the purchase price for timber

The tax period is normally the calendar month. You can only file by the calendar quarter if the Tax Administration has granted you an extended tax period.

File the information on the withholding and pay it by:

  • The 12th of the month after the tax period if you file monthly
  • The 12th of the second month after the tax period if you file quarterly. In other words, if you are filing the return for the first quarter (January to March), file it by 12 May.

Buyers of timber are normally expected to withhold tax on the payments they make to forest owners. Note: this must also be done if the forest owner is someone who lives in a foreign country permanently and is a nonresident.

No withholding is necessary if:

  • The entire proceeds for the timber stay below €100 (if the sellers are two spouses, the 100-euro limit is applied separately for each one of them).
  • The seller owning the forest is a corporate entity or a consortium
  • The wood being bought is a more refined product, not timber.

If the buyer is an individual or an estate of a deceased individual, they do not have to withhold tax on amounts paid out to the sellers of timber unless the threshold of €1,500 is reached in the course of a calendar year or if the buying of timber has to do with a business operation.

If a forestry association is acting as an intermediary when several owners are selling, the party liable to withhold, file and pay the tax is the association, not the buyer of timber. But if the buyer of timber pays the amount directly to the bank account of the sellers, the party liable to withhold, file and pay the tax is still the buyer although an association has acted as an intermediary.

As a buyer, you must also file an information return on the timber and the amounts paid for it after the year is over. You must do so by the end of January after the end of the year of withholding.

Further information: Puun ostajan ennakonpidätysvelvollisuus (in Finnish and Swedish)

25 Withholding from payment to limited company, cooperative or other corporation

For this sub-type, the tax period is normally the calendar month. You can only file this tax by the quarter if the Tax Administration has granted you an extended tax period.

File and pay the amount withheld by:

  • The 12th of the month after the tax period if you file monthly
  • The 12th of the second month after the tax period if you file quarterly. In other words, if you are filing the return for the first quarter (January to March), file it by 12 May.

You must withhold tax on any nonwage compensation you pay to a limited company, cooperative or other corporation as 'trade income' or royalties and pay the withheld amounts on to the tax office unless the beneficiary is on the Prepayment Register.

Note: Report any payments going to a natural person or to a partnership (limited or general partnership) who is not on the Prepayment Register under "Wages and other payments subject to withholding" and enter the withholding in "Tax withheld".

You also must file an annual information return in order to report the payments and the taxes withheld on them. You must submit annual information once a year, by the end of January after the end of the year of withholding.

Read more: Ennakonpidätyksen toimittaminen (in Finnish and Swedish)

More information on annual information returns

68 Amount withheld on interest and profit-shares

This sub-type concerns the withholding on payments of interest, profit share, and aftermarket bonus you make to a natural person.

The tax period is normally the calendar month. You can only file this tax by the quarter if the Tax Administration has granted you an extended tax period.

File the information on the withholding and pay it by:

  • The 12th of the month after the tax period if you file monthly
  • The 12th of the second month after the tax period if you file quarterly. In other words, if you are filing the return for the first quarter (January to March), file it by 12 May.

The '68' code is only for the withholding on payments of interest/shares to a resident of Finland. If you paid a nonresident and withheld tax, you must use the '69' code.

You must also file an annual information return in order to report the amounts withheld. You must do so once a year, by the end of January after the end of the year of withholding.

Read more: Ennakonpidätyksen toimittaminen (in Finnish and Swedish)

More information on annual information returns

92 Amount withheld on dividends and cooperative surplus

The tax period is normally the calendar month. You can only file this tax by the quarter if the Tax Administration has granted you an extended tax period.

File the information on the withholding and pay it by:

  • The 12th of the month after the tax period if you file monthly
  • The 12th of the second month after the tax period if you file quarterly. In other words, if you are filing the return for the first quarter (January to March), file it by 12 May.

If you make a payment of dividends of listed and non-listed companies to an individual or to an estate of a deceased person, as defined in § 33 a and § 33 b, Income Tax Act, you must withhold tax on the amount that you pay out. Similarly, if you pay profit surplus of a cooperative, listed or non-listed, to an individual or to an estate of a deceased person, as defined in § 33 e, Income Tax Act, you must withhold tax.

Report the withholding on dividends and profit surplus on the return for the period that coincides with the date when the dividends/surplus first became available for payment to the shareholders. Only enter the withholding, not the amount of the entire dividends or surplus.

You must also file an annual information return to the Tax Administration by the end of January the next calendar year.

Further information:

For more information, see the guidance Ennakonpidätys osingosta ja Verohallinnolle annettavat ilmoitukset (in Finnish and Swedish).

Read more: Ennakonpidätyksen toimittaminen (in Finnish and Swedish)

More information on annual information returns

39 Tax at source withheld from dividends (paid out to nonresidents) and 69 Tax at source on interest and royalties (nonresidents)

The tax period for this sub-type is normally the month. You can only file by the quarter if the Tax Administration has granted you an extended tax period.

File and pay the tax at source by:

  • The 12th of the month after the tax period if you file monthly
  • The 12th of the second month after the tax period if you file quarterly. In other words, if you are filing the return for the first quarter (January to March), file it by 12 May.

Foreign corporate entities and citizens of foreign countries living outside Finland are treated as nonresidents, i.e. having a limited tax liability. If they are beneficiaries of dividends, interest or royalties from a Finnish payor, it is required that a tax is withheld at source (as a final tax).

  • Report the withholding on dividends (39) on the return for the period that coincides with the date when the dividends first became available for payment to the shareholders. Only enter the withholding, not the amount of the entire dividends.

The code to use is '39' also in the case of withholding on a payment of surplus to a nonresident by a cooperative society.

Similarly, use the '39' code also for reporting the tax at source withheld on distributions of money to the shareholders from a fund consisting of unrestricted corporate equity.

Note: if you withheld tax at source on wage payments or the like, enter it in the "Tax at source on wages etc." field on the self-assessed tax return.

If you have made payments subject to tax at source, you must also report it on an information return after the year is over. Submit it by the end of January after the end of the year when you withheld the tax at source.

If you have paid a nonresident for a delivery of timber, you must not withheld tax-at-source. Instead, you must carry out an ordinary withholding. In this case, use the '24' code (Amount withheld from purchase price of timber).

84 Tax at source on interest income (residents)

For this sub-type, the tax period is normally the month. You can only file by the quarter if the Tax Administration has granted you an extended tax period.

File and pay the tax at source by:

  • The 12th of the month after the tax period if you file monthly
  • The 12th of the second month after the tax period if you file quarterly. In other words, if you are filing the tax return for the first quarter (January to March), file it by 12 May.

Payments of interest subject to tax at source are those paid to tax-resident individuals in Finland – i. e. physical persons fully liable to tax – or estates of deceased persons in Finland.

interest paid on bank deposits by financial institutions and cooperative savings banks, to accounts opened for the purpose of collecting deposits from the public interest paid on the amounts deposited in personnel service offices (=employees' banks)

If you have paid out interest of this type, you must also report it on an Information Return after the year is over. Submit the annual information by February 15 of the year after the year when you withheld tax at source.

Read more: Ennakonpidätyksen toimittaminen (in Finnish and Swedish)

More information on annual information returns

Tax period Enter the tax periods for VAT and employer contributions as appropriate; the most common period length is the month. You can only file by the quarter if the Tax Administration has granted you an extended tax period.

Note: You must always apply the monthly tax period to insurance-premium tax and lottery tax.

If the tax period is

  • the month, indicate the month by a number. For filing taxes for March, enter '3'.
  • the quarter, indicate one of the four quarters also by a number. For filing taxes for 2nd quarter, enter '2' (from April to end of June).
Year Enter the year, use four digits.
Tax payable Enter the amount due for the tax period.

The Tax Administration records the transaction of insurance-premium taxes, making an entry to your account.

No activity subject to Tax on Insurance Premiums

If your insurance business is seasonal or interrupted for several months, you can report a no-activity period. To report such breaks in advance, use the self-assessed tax return. If no activity took place during the tax period, enter zero in "Tax payable".

Filing "No-Activity" in MyTax requires that you select the "No activity/no wage payments" once for every tax period concerned.

Maximum length of No-Activity reporting is six months into the future. You do not have to file returns for reported interruptions, unless you in fact have conducted some insurance business.

If your insurance business has ended completely, you must submit a Notification on terminations of business (available at ytj.fi/english). However, you must also file your self-assessed tax return for your final period as a business liable to tax on insurance premiums.

Making corrections to submitted returns

If you detect an error or omission, you are expected to put it right without delay. It is expected that any inaccuracies be corrected although no change would ensue to amounts of taxes.

The way to make corrections is by filing a new return which replaces the previous return (replacement return) for the same tax period where the error occurred.

Corrections are made in the same way regardless of whether the amount of tax increases or decreases. In other words, from the perspective of making corrections, it is not important whether your original return contained too much tax to pay – or too much refunds. You should always file a replacement return.

The replacement erases and revises the amounts for a certain tax (i.e. VAT). For this reason, it is required that you re-submit both the amounts that were inaccurate and those that were accurate. All employer's contributions are treated as a single sub-type of tax. For this reason, you must re-submit your withholding, health insurance and tax-at-source if any of these had contained errors or omissions.

Note: when making corrections to tax returns where both the tax payable and the base of the tax are indicated, you must give the amounts consistently for the same tax period. An example: the "Purchases of goods from EU" and "Tax on purchases from EU" fields. Another similar example: the "Purchases of construction services and metal scrap" and "Tax on purchases of construction services and scrap".

The new way of making corrections is in use as of 1 January 2017, involving the replacement return; and also if any corrections are made to filings dating back to before 1 Jan 2017, replacement returns must be filed.

Illustration: Your tax period is the calendar month and you want to make corrections to your VAT for the 12/2016 tax period in May 2018. The way to do so is to file a replacement VAT return, tax period 12/2016.

Illustration: The tax period of a limited company is the calendar month and the accounting period is 1 July 2016 – 30 June 2017. In October 2016, there was €2,000 of VAT to pay. However, in May 2018 it is detected that the VAT return for October has indicated €2,500 meaning €500 too much. The way to correct the error is to file a replacement VAT return for October 2016. The company cannot ask for the VAT to be refunded by a refund application after the accounting period is over.

Small mistakes may be corrected by a simplified process

If the amount is low and the mistake in the self-assessed tax return is minor (less than €500 per tax period and per type), you can make a simplified correction by making an adjustment to the amount on your next tax return, filed on the following due date after the month when you noticed the error. However, you must correct the error even if you have nothing else to report.

The excessive tax or the unreported tax is considered minor, when the amount is at most €500.

Errors of this type can be corrected in the simplified way even if they were detected after the end of the calendar year. The simplified method is available for the entire period when corrections are allowed, and it does not give rise to late penalty charges.

Illustration: The taxpayer's tax period is the calendar month. She notices a small mistake in May 2018 that concerns the self-assessed tax return she had filed for November 2017. There is no need to indicate that the correction relates to November 2017 by submitting a replacement tax return for that period. She may rather put the mistake right on her next return. She must file it by the general due date occurring in June 2018.

 

The simple correction method does not concern tax periods that ended prior to 1 January 2017.

Illustration: Your tax period is the month and you want to make corrections to your VAT for 6/2016 after 1.1.2017. The way to solve the problem is to file a replacement VAT return, tax period 6/2016. You must do so even if it were a minor mistake. The simple correction method does not concern the periods that ended before 1 January 2017.

If the error has to do with the return you filed for the 1/2017 tax period and you notice it in April, you can apply the simplified correction: adjust the VAT return for March that you must file in May.

Errors that are minor cannot always be corrected in the next return because negative values are only permitted on VAT returns. If the correction is for employer's contributions and their value would end up being negative, you cannot make a corresponding adjustment on the return given the following month. The mistake can be corrected by-and-by, on a series of tax returns.

Illustration: The taxpayer had reported too much withholding. The correction of this small mistake is spread out over a number of months.

The taxpayer notices a minor mistake in October 2017 involving the return filed for September 2017. The withholding entry is too high: 200 euros too much. Withholding for October is €100. When filing the return for October, the amount can only be corrected for €100 because it is not allowed that the withholding value would become negative. This way, the taxpayer must spread out the correction of this minor mistake over a number of months.

Nevertheless, it is always allowed to file a replacement for the correct tax period i.e. the period when the mistake occurred. In situations where a replacement return would lead to a negative final value of a tax (other than VAT), the Tax Administration will apply the correction to a tax period for which the taxpayer has a tax (of the same type of tax) falling due.

Another restriction of the simplified method of correcting is that if the correction does not impact the amount of tax, the simplified method does not apply. Examples of errors and omissions falling into this category are:

  • VAT return mistakes in tax-exempt selling of goods and services to the EU,
  • Mistakes in tax-exempt selling of construction services and metal scrap (reverse charge), and
  • Mistakes in the selling reportable under zero-VAT rate.

For this category of errors, the only way to make corrections is by filing a replacement return for the same tax period where the error occurred. The same applies to correcting a previous indication of the type of tax: for example, tax-at-source should have been reported but ordinary withholding was reported. The late penalty charge will not be imposed because the error and its correction only involve one type and there is no impact on the amounts to pay.

If too much withholding was reported but this is not detected until after the calendar year, you will also have to make a correction to the submitted Employer Payroll Report. This is due to the fact that withholding information plays an important role in individual taxpayers' regular assessment process. Similarly, making corrections to tax-at-source and to the employer's health insurance also requires a correction to the Employer Payroll Report as before.

Illustration: You are an employer, and your tax period is the calendar month. In November 2018, you detect a small mistake in the withholding figure on your October 2017 tax return. You had reported too much withholding: you actually withheld a smaller amount. There is no need to prepare a correction specifically for October 2017; rather, you can make the necessary correction by the general due date in December 2018 when filing your tax return. Because you didn't notice the mistake until the following year, you also have to make a correction to your Employer Payroll Report for 2017

Read more

Making corrections to mistakes on a tax return

"Official decision on entering corrections – Verohallinnon päätös veroilmoituksessa olevan virheen korjaamisesta" (In Finnish and Swedish only)

Give the reason for the correction

If you already filed your self-assessed taxes but you notice some errors and omissions, you must file a replacing tax return.

Give one of the following reasons:

  • Miscalculation/typographic error
  • Tick this reason as appropriate.
  • Change in legal praxis (case law)
  • Tick this as appropriate.
  • Guidance received during tax audit
  • Tick this as appropriate.
  • Error in interpretation of law

This would be your reason for correction, for example, if you had first entered selling at the 24-percent rate and then you make a correction to report it at the 10-percent rate instead.

Give reason for correction

Because you can put smaller mistakes right by a simple process, it is enough if you enter a correction in a return for a future tax period if the mistake is small. No replacement return is filed, and there's no need to specify the reason for the correction.

Late penalties for self-assessed tax returns

If you don't file the tax return by its deadline or make corrections to it past deadline, a late penalty charge is imposed. The charges are specific for each sub-type of tax filed late. However, payroll withholding, the employer's health insurance contribution, and taxes at source are regarded as one single type.

Late filing of the tax period's first return

If you file the tax return late, a penalty charge of €3 per day is imposed for the first 45 days of delay. It starts to accrue the next day after the due date, and continues up to the actual arrival date of the filing, that day included. Reference to "days" means calendar days, i. e. weekends and holidays are included.

If the delay is 45 days or less, the amount of the tax filed late has no effect on the late penalty charges. This way, you'd have to pay €135 if you were 45 days late in filing your return (45 days × €3). Because the charge is not dependent on the tax owed, it may even be higher than this tax. Example: The tax is €50.00 and the charge imposed for late filing is €135.00.

If 45 days has elapsed and you still haven't filed, two percent of the tax to be paid and filed late is added to the €135.00. However, the part of the charge linked to the tax owed is maximally €15,000 for each tax and for each tax period.

Late penalties imposed on a replacement return

No late penalty is imposed if the replacement is filed within 45 days after the original due date.

However, if the replacement return is filed later than 45 days, and it turns out that the tax to be paid has increased, there will be a late penalty charge on the amount of tax which increased.

In the case of a replacement tax return, the late penalty charge is two percent of the tax to be paid and filed late, which is the difference between the tax reported on the original return and the tax reported on the replacement return.

No charge linked to the tax is imposed if the replacement does not indicate an increase of the tax owed, or if it indicates that the tax decreases.

Read more:

Late penalty charges on self-assessed tax returns 

Seuraamusmaksut oma-aloitteisessa verotuksessa (in Finnish and Swedish):

 

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