Work done by foreign leased employees

If you lease employees, you may have to withhold tax on the amount you pay their leasing agency and submit a report with the names and identities of the individuals who do the work.

Employee Leasing Notice

If you are a Finnish company, a Finnish individual or a foreign company with a permanent establishment in Finland, you are required to report when you have leased employees from a leasing agency.  One of the facts you must report is the name and address of every foreign leasing agency with which you have made an agreement to have people work for you in Finland. This reporting requirement covers any leased employees from countries that have a tax treaty with Finland permitting Finnish taxation of their earnings and from those that do not.

Countries for which there is a treaty permitting Finland to collect tax on leased employees' earnings:

Estonia, Latvia, Lithuania, Sweden, Norway, Denmark, Germany, Iceland, Moldova, Georgia, Belarus, Isle of Man, Guernsey, Bermuda, Jersey, Poland, Kazakhstan, Cayman Islands, Turkey, Cyprus, Tadzikistan or Turkmenistan.

Accordingly, it is the leased employee's country of tax residence that determines which country has the right to collect tax and require tax returns and other reporting; the country of tax residence of the leasing agency is not significant.

Complete Form 6146a – "Report submitted by the hirer of leased employees" (Työn teettäjän ilmoitus verotusta varten; Uppdragsgivares anmälan för beskattningen). This form requests the name, address and other contact information of the foreign leasing agency, and details of its sector of business.  You must submit it by the end of the calendar month following the month when you had the first foreign leased employee doing work for you. You must give these details regardless of the duration of the lease or the number of days you had the leased employees.
"Report submitted by the hirer of leased employees"—Työn teettäjän ilmoitus verotusta varten (Form 6146a)

If there are any changes to the details you give on Form 6146a (such as change of address, or termination of an activity), you must submit a new one to keep us up to date.  The deadline for sending the new form is the end of the calendar month after the month when the changes occurred. However, you do not have to notify us if you just have a temporary break in your operations.  You are considered to have terminated your leasing operation if you do not lease any employees from the foreign agency to work for you for a period of six months.

If you don't submit the report or submit it late, you may have to pay a penalty for negligence of up to €15,000.

Obligation to withhold

When you lease employees you must withhold tax at source on payments to a foreign agency
at a 13% if the agency is a limited-liability company or other corporate entity or 35% if it is a sole trader.  You don't have to withhold tax if the foreign agency is in the Finnish prepayment register, or has shown you a tax-at-source card with the zero withholding rate or other documentation establishing that withholding is not necessary.

However, other documentation is not sufficient if you are making payments relating to:

  • the construction industry - building sites; construction, assembly or installation projects: associated supervisory activities
  • transportation services
  • cleaning services
  • nursing services and treatment

For these, you must withhold tax at source unless you are paying an agency that is in the Finnish prepayment register or has shown you a tax-at-source card with the zero withholding rate. This rule applies in situations where the leased employee's country of tax residence is one without a tax treaty with Finland.

If you lease employees to work for you, you may also have other obligations and duties in addition to the ones described here. For more information, visit the website of the Occupational Safety and Health Administration at www tyosuojelu.fi .  

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