This is an unofficial translation. The official instruction is drafted in Finnish (Ulkomaiset vuokratyöntekijät ja Suomen verotus, VH/7223/00.01.00/2025) and Swedish (Utländska hyrda arbetstagare och beskattningen i Finland, VH/7223/00.01.00/2025).
This article explains the tax treatment of foreign leased workers in Finland or on a Finnish ship or aircraft and contains guidance for the workers, for foreign employee-leasing companies, and for contractors in Finland at whose worksites the work is done.
A new item addressed in the article are the provisions that entered into force on 1 January 2026 concerning the obligation to report the wages of a leased employee working on a Finnish ship or aircraft and the obligation of a nonresident leased employee to report apply for tax prepayment. A note has also been added on another provision that entered into force on 1 January 2026, stating that a nonresident person whose place of residence is in the European Economic Area can also ask to be entered into the prepayment register. Some other clarifications have also been made to the instructions.
1 General information
As a rule, a leased employee living abroad pays tax to Finland for wages received from work performed in Finland or on a Finnish ship or aircraft. The tax status of a worker depends on the length of his or her stay in Finland and the provisions of a tax treaty between the worker’s country of tax residence and Finland, and on other factors. The provisions on the workers’ tax status vary.
Usually, the countries of residence will also impose tax on the worldwide earnings of their residents according to their own laws. This way, income earned from working in Finland or on a Finnish ship or aircraft is usually also taxed in the worker’s country of residence. Any double taxation is relieved in the worker’s country of residence, according to the provisions of the treaty between that country and Finland, or according to the provisions of the national laws of the worker’s country.
2 Tax payable on the earnings of leased employees in Finland
2.1 Tax liability and earnings in Finland
Two categories of tax liability exist in income taxation: unlimited and limited liability to tax in Finland (= residency and non-residency, respectively). Pursuant to section 11.1 of the act on income tax (Tuloverolaki (1992/1535)), “residents” means individuals who live in Finland and individuals who live in other countries but are present in Finland for longer than six months. Finnish residents pay tax to Finland on anything they earn both in Finland and other countries.
Nonresidents, i.e. taxpayers with limited liability to tax, are those who have not stayed in Finland during the tax year or have only stayed for a shorter period. Nonresidents only pay tax to Finland on what they earn in Finland (§ 9.1 of the act on income tax). Income that must be treated as being from a Finnish source includes wages paid by a foreign employer for work performed in Finland, if the foreign employer has leased the worker to a recipient company in Finland under an employee-leasing contract (§ 10.4c of the act on income tax). This way, even if the leased worker is a nonresident individual taxpayer with limited tax liability, he or she must pay tax to Finland on wages received for work carried out in Finland.
In addition, a nonresident person working on a Finnish ship or aircraft is liable to pay tax to Finland on wages earned for work on board a ship or aircraft (section 13 of the Income Tax Act). The tax liability applies to the employees of a company using a Finnish ship or aircraft. The tax liability also applies to leased employees whom their foreign employer has leased out to a company that is using a Finnish ship or aircraft and acting as the recipient enterprise of the leased employees.
The tax liability applies to all work carried out on a ship or aircraft and any work directly related to this work carried out outside the vessel. The definition of a Finnish ship or aircraft also includes a foreign ship or aircraft leased or otherwise controlled by a Finnish employer where the vessel comes with only a few crew members or no crew.
For more information on residency and nonresidency, see Finnish Tax Administration instructions Tax residency, nonresidency and residency in accordance with a tax treaty – natural persons.
2.2 Impact of tax treaties when a leased employee works in Finland
The provisions of a tax treaty between the leased worker’s country of residence and Finland may have an impact on how the Finnish tax authority collects tax on his or her wage income. The wages of workers from countries with which Finland has signed a treaty are taxed in Finland if the worker stays in Finland for more than 183 days – either over a period of 12 months, or in the course of a calendar year, depending on the provisions of each treaty.
However, the following tax treaties, and some others, allow the wages of leased employees to be taxed in the country where the work is done starting on the first day of work:
- Since 2007: Iceland, Norway, Sweden, Denmark, Latvia, Lithuania and Estonia
- Since 2009: Moldova, Georgia, Belarus and the Isle of Man
- Since 2010: Guernsey, Bermuda and Jersey
- Since 2011: Poland, Kazakhstan, Cayman Islands
- Since 2013: Turkey
- Since 2014: Cyprus and Tajikistan
- Since 2018: Germany and Turkmenistan
- Since 2019: Spain
- Since 2024: Albania
Pursuant to the tax treaty between Finland and Bulgaria, wages earned from work done in Finland can be taxed in Finland if a resident of Bulgaria works for a non-Bulgarian employer in Finland (Agreement between the Republic of Finland and the Republic of Bulgaria on avoiding double taxation of income, Article 7 (11/1986)). This provision of Finland’s treaty with Bulgaria applies both to leased workers and to other workers.
The wages of a leased worker are also taxed in Finland if he or she comes from a country with which Finland does not have a tax treaty. In this case, the wages are taxable income in Finland from the very first day of work.
2.3 Impact of tax treaties when a leased employee works on a Finnish ship or aircraft
According to tax treaties, the primary right to levy tax on wages earned for work performed on a ship or aircraft used in international traffic is usually the state where the actual headquarters of the company using the ship or aircraft for international traffic are located. The tax treaty provisions on international transport are applicable to the employees of the company using the vessel and any leased employees working on board the vessel.
Still, not all tax treaties have the same provisions. For example, according to the Nordic tax treaty, the right to levy tax on wages earned for work performed on board a ship belongs to the flag state of the ship. The Nordic tax treaty also contains a deviating provision on the wages of aircraft workers, stipulating that the wages of flight personnel are taxed only in the country of residence of the worker.
The definition of international traffic must always be checked from each applicable tax treaty and whether domestic routes of the contracting state are included in the definition.
For more information on the taxation of individuals living abroad and working in international traffic, see Taxation of employees from other countries, section 6.2 International traffic.
3 Personal identity code and tax number
3.1 Personal identity code
Finnish personal identity codes are normally issued to people from other countries when their personal details are added to the information system maintained by the Agency for Digitalisation and Population Information. In some cases, IDs can be issued by the Finnish Immigration Service or the Finnish Tax Administration. A person can request a personal ID from the Tax Administration if they need it for tax-related reasons when they start working in Finland.
For more on this topic, read the instructions on Finnish personal identity codes for workers arriving in Finland.
3.2 Individual tax number and the Tax Number Register
Everyone working on a construction site or at a shipyard must have a photo ID that displays their tax number. Additionally, the tax number must be in the public tax number register. The Finnish Tax Administration’s online information service allows users to check whether an individual worker’s name and tax number are in the tax number register. To get a tax number, a person needs a Finnish personal ID, which is registered in the Population Information System.
Read more about tax numbers in the instructions on Tax number and Individual tax numbers and the public tax number register.
4 Employee leasing
4.1 General remarks about employee leasing
Employee leasing refers to a contractual arrangement where a business enterprise (the leasing company, also known in English as a PEO, a professional employer organisation) leases employees to another business against a charge. The leased workers do their work for the other business (the service recipient company). This way, a contractual relationship is established between the (foreign) leasing company and the (Finnish) recipient. The above definition equally applies to natural persons, in addition to companies, if natural persons are the contracting parties.
Usually, the right to direct and supervise workers primarily belongs to the employer. However, if an employer assigns a worker, with his or her consent, to another company, the right to direct and supervise the work is transferred to that company. Not only the right to direct and supervise work but also the employer obligations directly related to the performance of the work and the associated arrangements are also transferred.
In an employee-leasing arrangement, the leasing company pays wages to the worker and withholds tax on the wages. For purposes of the Employment Contracts Act (Työsopimuslaki 55/2001), the worker is on the payroll of the leasing company. For this reason, the leasing company’s obligation to withhold taxes cannot be transferred to another party; for example, to an umbrella company that issues invoices. The money that the recipient company pays to the leasing company is regarded as “trade income” i.e. nonwage compensation for work.
For purposes of income taxation and pre-assessment of income taxes, workers are considered “leased” if the following criteria are met:
- The right to direct and supervise the work is in the hands of the service recipient who signed the contract.
- The work is performed in a workplace over which the service recipient has control and for which it is responsible. This means that the leasing company does not operate there. It only leases its employees to the other contracting party i.e. to the recipient company.
- Most tools, supplies and consumables are given to the worker by the recipient company.
- The leasing company cannot unilaterally decide on the number of workers on site, or on their qualifications.
- Responsibility for the results of the work rests with the recipient company.
- The leasing company pays wages to its employees and the amount of pay reaches at least the level that the collective agreement has defined.
The concept of employee leasing, for purposes of this article, and the work done under an employee-leasing arrangement, require that all the above terms and conditions are satisfied. If this is not the case, the payments from the service recipient are the individual worker's wages instead of fees paid out against the invoice received from the leasing company. In this case, the recipient must withhold tax on the wages as usual and also pay the employer’s health insurance contributions on them.
The applicability of the regulations on employee leasing does not depend on the foreign company’s industry sector. Instead, each case is decided separately after an overall assessment, taking account of the criteria listed above.
Huomio osio alkaa
Example 1: An Estonian company and a Finnish company sign a contract on sending an employee to Finland, to work on the Finnish company’s building site. The Estonian employer pays the worker’s wages. The work is directed and any necessary decisions are taken by the Finnish company. The arrangement coincides with the definition of employee leasing.
Huomio osio päättyy
If a corporate entity is only offering the work performance of its owner-shareholder without providing any other leased employees to a recipient company, the requirement is still in force that wages must at least reach the levels of pay that the collective agreement has defined. The owner-shareholder must receive such wages from his or her own enterprise. This requirement is also valid in case there are other people besides the owner-shareholder whose work performance is offered to recipients so that they can work as leased employees.
It may be that instead of a corporate entity, a self-employed operator of a trade or business is the party that provides its workers to service recipients so that they can work under a leasing contract. For these leased employees, too, the requirement is in force that wages must at least reach the minimum levels that the collective agreement has defined. However, it is impossible for a self-employed to offer their own work for employee leasing. This is due to the fact that if the business is a sole proprietorship, i.e. a self-employed operation (T:mi; F:ma), there cannot be an employer-employee relationship, and there cannot be any payroll transactions where wages could be paid to the individual who owns the business. For this reason, an operator of a trade or business who is self-employed cannot fulfil the above requirements of a leased employee.
Managing Directors or members of the Board of Directors are not treated as being in an employer-employee relationship with their company. For this reason, the Employment Contracts Act is not applicable. This means that no arrangements are acceptable where a leased employee is supposed to be a Managing Director or board member. Compensation paid to the individual who acts as a Managing Director or board member is always fully treated as wages of the individual appointed as the Managing Director, or as wages of the individuals appointed as board members, regardless of what route was used when the payment from the company was made.
Employee leasing also includes situations where a worker is not directly employed by the leasing company with which the Finnish company (the service recipient company) has an agreement, but is leased from another, third-party business enterprise. In these situations, the reporting obligation falls on the employer who pays the wages to the leased employee and with whom the workers have an employment relationship. The employer with the reporting obligation is the Finnish employer for whom the employees will be working.
Huomio osio alkaa
Example 2: A German company leases one Hungarian-resident and two Latvian-resident workers to a business operating in Denmark, which in turn leases the workers to a Finnish contractor for work to be performed in Finland. The workers are employed by the German company.
The German company is the workers’ foreign employer and for this reason, the German company has the reporting obligations described below. The Latvian workers are liable to pay tax on their wages to Finland, based on the work they perform as leased employees, from their very first day of work in Finland. Due to the tax treaty, Finland only has the right to tax the wages of workers who reside in Hungary if they stay in Finland for more than 183 days during the period the treaty has set out (in the Finland‑Hungary treaty, the period is the calendar year).
Example 3: An Estonian company leases its workers to a Finnish company (A), which then leases them out to another Finnish company (B). In this case, the party with reporting obligations (to file the Service Recipient's notice) is the Finnish company B where the workers do the work.
Huomio osio päättyy
4.2 Differences between employee leasing and subcontracting
In the case of subcontracting, the right to direct and supervise the work belongs to the subcontractor. In the case of employee leasing, it belongs to the recipient, i.e. the company where the leased workers do their work.
In the case of subcontracting, the workers get their tools and equipment from the subcontractor. In the case of employee leasing, they get them from the recipient company. In the case of subcontracting, responsibility for results of the work rests with the subcontractor. In employee leasing, work results are the responsibility of the recipient company.
Huomio osio alkaa
Example 4: A Lithuanian company and a Finnish company sign a contract concerning a job on a Finnish building site. The workers’ wages are paid by the Lithuanian employer. The Lithuanian company also directs and supervises its employees on the building site and assumes responsibility for the good results of their work there. Moreover, the Lithuanian company determines how many workers are needed to complete the job. This arrangement is subcontracting – not employee leasing.
Huomio osio päättyy
4.3 Differences between employee leasing and employment agency services
Employment agency services and employee leasing are different sectors of activity. Employment agencies bring workers and employers together so that they can sign an employment contract between them.
If an enterprise that provides workers from foreign countries only acts as an agency, and does not act as the workers’ employer, the arrangement is not employee leasing. The workers’ employer is the Finnish company for which the work is performed. The Finnish company has hired them and signed employment contracts with them. Consequently, the Finnish company must fulfil all the usual obligations that belong to the employer.
Huomio osio alkaa
Example 5: A Lithuanian company is in the role of an intermediary, helping a Finnish cleaning company to find workers. The work is performed under the Finnish company’s direction and supervision and using the company’s equipment. The Finnish company also pays the workers’ wages. In these circumstances, the workers’ employer is the Finnish company.
Huomio osio päättyy
5 Instructions for foreign leased employees
5.1 Non-resident leased employees
5.1.1 Special tax treatment of non-resident leased employees
A nonresident is taxed according to limited tax liability as provided by the Finnish Act on the taxation of nonresidents' income (Laki rajoitetusti verovelvollisen tulon verottamisesta 627/1978, LähdeVL). This means that your employer withholds the tax due at source when paying wages to you. This is a final tax, which discharges your tax liability for the year, and its rate is 35% (Tax at Source Act, § 7.1 (1), Act on the taxation of nonresidents’ income).
However, nonresident leased workers are taxed in a special process. Basically, your taxes are assessed in the same way and at the same time as those of Finnish residents. The special process for leased workers does not, however, constitute taxation under the Act on assessment procedure (Verotusmenettelylaki (1558/1995)) as referred to in section 13 of the Act on the taxation of nonresidents’ income, which is why income tax is imposed at the rate of 35%. Your employer deducts €510 per month or €17 per day from your taxable wages for the entire time when you are working. You get no other deductions.
However, if you are a citizen of an EU country or a citizen of the countries in the European Economic Area or of a country or region that is governed by the Convention on Mutual Administrative Assistance in Tax Matters or a Tax Information Exchange Agreement, or if you have a residence permit pursuant to the Researcher Directive, you are entitled to demand tax treatment under a domestic, progressive scheme in accordance with the act on assessment procedure (with the exception of dividends). (§ 13.1.6 of the act on the taxation of nonresidents’ income.).
Read more about progressive taxation of non-resident taxpayers in Taxation of employees from other countries, section 2.3.
5.1.2 Applying for prepayment taxation
A nonresident leased employee working in Finland or on a Finnish vessel is required to apply for the prepayment of taxes on their wages (section 16a of the Act on the taxation of nonresidents’ income). The employee must apply for tax prepayment if the foreign employer is not required to collect taxes from wages and an international treaty does not prevent the tax from being collected. The foreign employer is obliged to collect taxes on wages if it has a permanent establishment or actual headquarters in Finland or if it has been voluntarily entered in the employer register.
The employee must apply for prepayment taxation by the end of the calendar month following the beginning of their work in Finland. Pre-assessed taxes must be paid once a month.
The employee’s failure to apply for prepayment taxation by the deadline may result in a punitive tax increase of up to €2,000 payable to the State of Finland. The amount of the punitive tax increase depends on the degree of culpability, previous failures and other similar factors (section 16a of the Act on the taxation of nonresidents’ income).
Huomio osio alkaa
Example 6: If leased work starts on 7 March 2026, the employee must apply for tax prepayment no later than 30 April 2026.
Huomio osio päättyy
A monthly deduction of EUR 510 is made from the wage income for the period of employment when prepayment tax is imposed. If you do not work for a full month, the amount is €17 per day.
Huomio osio alkaa
Example 7: You work in Finland for three full months and 14 days. You get paid €1,500/month and finally, €1,000 for the 14 days on top. Your taxable income amounts to €5,500, from which €510.00 is subtracted three times and €17.00 fourteen times (€5,500 – (3 × €510 + 14 × €17) = €3,732). Your calculated gross income, liable to prepayment taxation is €3,732 at the fixed tax-at-source rate of 35%.
Huomio osio päättyy
In addition, if you are covered by the Finnish system of sickness insurance, you are liable to pay health insurance contributions. The amount of the contribution is calculated from the wages before the €510/month or €17/day is deducted. No contributions are deducted if you are able to present a Certificate A1 or other proof showing that you continue to be covered by another country’s social insurance system.
Foreign leased employees – taxation depends on how long you stay and on the treaty between your country and Finland provide more detailed instructions on how a leased employee can apply for tax prepayment or a tax card.
5.1.3 Proof of tax payments for the authorities of the worker's country of residence
As a rule, workers also pay tax on earnings in Finland to their country of residence. The elimination of double taxation is governed by international tax treaties. The double taxation of income is eliminated in the worker’s country of residence according to the provisions of the applicable tax treaty. Any tax paid to Finland by a worker on his or her earnings is taken into account in the calculation of tax payable to the worker’s country of residence.
The Finnish tax authorities provide statements of taxes paid to Finland through taxation. You can use the statements as proof of tax payments for the tax authorities of your country of residence. This way, they are able to take account of any tax you paid to Finland, in order to avoid double taxation.
5.1.4 Tax assessment in Finland
Tax assessment is performed in the year following the tax year. At that stage, your final tax liability is calculated on the basis of the actual income earned. If the tax you paid in advance is not enough to satisfy the final tax liability, you must pay “back tax” to make up the difference. In the inverse case, if more than the required amount of tax was paid in advance, the excess is refunded.
Each year in spring, the Finnish Tax Administration sends workers a pre-completed tax return relating to the previous tax year’s income and deductions. The pre-completed tax return, which is sent to your home address in your country of residence, shows the wages reported by the employer and the length of employment in Finland. Workers who are not sent a pre-completed tax return are responsible for completing their tax return for Finland.
After receiving the tax return, workers must check the information and amounts that affect their taxation and report any errors or omissions. The tax return and any corrections are submitted in MyTax. If using Finnish e-services is not possible, the tax return can be submitted with a paper form.
Even workers who have not applied for progressive taxation at the pre-assessment stage can apply for this retroactively by submitting their tax return. In this case, a completed Claim for progressive taxation of earned income (Form 6148e) must be enclosed.
Employers file reports to the Incomes Register on not just the wages paid to leased workers but also on the exact dates when a worker had worked in Finland. This information is transferred to the worker’s tax return. However, it may be that a worker’s pre-completed tax return does not contain the information on wages or length of employment – or the information is incorrect. In this case, to have the right to receive deductions from the tax at source, the worker must rectify the incorrect information. The worker hast to report their exact period of work in Finland on their tax return to receive a tax-at-source deduction.
Workers’ tax assessment will be ready by the end of October of the year following the tax year. Once the tax assessment is completed, a tax decision is available in MyTax. If a worker cannot use Finnish e-services, the Finnish Tax Administration will send the tax decision to the address in the country of residence notified by the worker. This is why it is important that the worker notifies their new address to the Finnish Population Information System after moving house. This can be done online. Guidance for change-of-address reporting is available at posti.fi.
Workers in Finland who live abroad can sometimes arrange for their employer to pay their taxes in Finland (“net-of-tax contract”). In this case, the worker gives their employer authorisation to receive any tax refunds that they might receive. However, any arrangements by which workers transfer their right to tax refunds to another person are not binding from the Tax Administration’s perspective. Despite any arrangements, workers still cannot transfer their right to tax refunds to another person in a way that is binding on the Finnish Tax Administration. You can inform the Tax Administration of your bank account number and other bank details in MyTax. Alternatively, you can use a paper form: Taxpayers can also supply their bank account details by filling in and signing a written notice (7208, Individuals’ Bank Account Notice). Read more in Change of bank account details.
5.2 Resident leased employees
The wages of resident leased workers are taxed at the progressive tax rate, similarly to permanent residents of Finland.
Workers whose employer is a foreign company that does not have a permanent establishment in Finland, or that has not asked to be entered into the Tax Administration’s register of employers on a voluntary basis, need to take care of their prepayment taxation themselves. It is important for these workers to contact their tax office to arrange their prepayment scheme. Without prepayments, the back taxes that would result would bear interest. The income-tax prepayment scheme requires that the worker must have a Finnish personal identity code.
Foreign leased employees – taxation depends on how long you stay and on the treaty between your country and Finland provide more detailed instructions on how a leased employee can apply for tax prepayment or a tax card.
Workers who are treated as Finnish residents have the obligation to file a Finnish tax return after the year is over. Generally, the country of tax residence imposes tax on all the income of its residents, applying the provisions of its own legislation. In this case, the country of residence would eliminate any double taxation.
6 Instructions for foreign employee leasing companies
6.1 Foreign employers’ obligation to submit reports
Legal rules on the requirements of foreign employers to provide information to the Finnish Tax Administration are found in § 15 a, act on assessment procedure. The information must be sent to the Incomes Register, as provided in § 6 of the act governing the Incomes Register (Laki tulotietojärjestelmästä 53/2018).
The information is required from all foreign employers who have a prepayment registration in Finland. If a worker’s employer is not included in the Prepayment Register, the responsibility for submitting the information rests with the employer’s representative as per section 8 of the Act on Posting Workers (447/2016). However, if no such representative has been appointed, the foreign employer must submit the information.
6.1.1 Employee leasing notice
Foreign employers must report to the Incomes Register the details of the employee leasing notice when they pay wages from abroad to a foreign leased employee coming to work in Finland in accordance with section 10(4c) of the Income tax act and when the tax treaty between Finland and the employee’s country of residence contains a provision on leased employees according to which the leased employee’s wages may be taxed in Finland from the first day of work (section 15a, subsection 1 of the Act on assessment procedure and section 6, subsection 2, paragraph 17 of the Act governing the Incomes Register).
The states whose tax treaties contain provisions on the taxation of leased employees are listed in section 2.2 of these instructions. The relevant information must also be submitted regarding any workers arriving from countries with which Finland does not have a tax treaty. Finland’s current tax treaties are listed on Tax.fi (Tax treaties in force).
From the beginning of 2026, foreign employers must also report to the Incomes Register the details of the employee leasing notice when they pay wages to a foreign leased employee coming to work on a Finnish ship or aircraft as referred to in section 13 of the Income tax act when the tax treaty stipulates that Finland has the right to levy tax on wages or if there is no tax treaty. (Section 15a, subsection 1 of the Act on assessment procedure and section 6, subsection 2, paragraph 17 of the Act governing the Incomes Register).
Employers must submit an employee leasing notice of work performed on a Finnish ship or aircraft after 1 January 2026, even if the work has started before that date. In other words, a leasing notice is submitted on work performed after 1 January 2026 even if the work has already been started in 2025 or earlier.
Read more about submitting an employee leasing notice in Reporting information to the Incomes Register: international situations.
The employee-leasing notice for a foreign leased worker must be submitted for every leased worker, regardless of the duration of their work. The submitted notice must contain the estimated duration of the work, the details of the Finnish employer, and of the representative of the foreign employer. Furthermore, an estimate must be given of the amount of pay for the entire tax year.
The submitted notices must include details on the recipient enterprise (the Finnish company) for whom the employees actually perform their work. Even employers who provide workers to an agency must give the details of the Finnish end client and not the employment agency.
The details of the employee leasing notice must be submitted no later than the fifth calendar day after the leased employee’s first wage payment date (section 12, subsection 8 of the Act governing the Incomes Register).
If a foreign employee-leasing employer has a permanent establishment in Finland or is a resident taxpayer in Finland based on the location of its actual headquarters, it is obliged to collect tax at source from wages or withhold tax on the wages. In this case, the details of the employee leasing notice are not submitted.
Even if a foreign employee-leasing employer has no permanent establishment or actual headquarters in Finland, it can still voluntarily register with the employer register. However, the employee leasing notice must be submitted even if the foreign employee-leasing employer has been registered in the employer register in Finland.
6.1.2 Information on wages paid
Foreign employers must report to the Incomes Register the wages they pay from abroad to a foreign leased employee coming to work in Finland in accordance with section 10(4c) of the Income tax act and when the tax treaty between Finland and the employee’s country of residence contains a provision on leased employees according to which the leased employee’s wages may be taxed in Finland starting from the first day of work (section 15a, subsection 1 of the Act on assessment procedure and section 6, subsection 2, paragraph 10 of the Act governing the Incomes Register).
The states whose tax treaties contain provisions on the taxation of leased employees are listed in section 2.2 of these instructions.
From the beginning of 2026, foreign employers must also report to the Incomes Register the wages they pay to a foreign leased employee coming to work on a Finnish ship or aircraft as referred to in section 13 of the Income tax act when the tax treaty stipulates that Finland has the right to levy tax on wages (section 15a, subsection 1 of the Act on assessment procedure and section 6, subsection 2, paragraph 10 of the Act governing the Incomes Register).
The employer must also submit the relevant information regarding any workers arriving from countries with which Finland does not have a tax treaty. Finland’s current tax treaties are listed on Tax.fi (Tax treaties).
Foreign employers must always report to the Incomes Register the wages they pay to an individual who stays consecutively in Finland for longer than six months (section 15a, subsection 2 of the Act on assessment procedure and section 6, subsection 2, paragraph 10 of the Act governing the Incomes Register).
The deadline for submitting the above reports to the Incomes Register is the fifth calendar day after payday (section 12, subsection 1 of the Act governing the Incomes Register).
6.1.3 Consequences of failure to declare
If the information-reporting requirement is not complied with, the Finnish Tax Administration may, in the following circumstances, impose a penalty charge for negligence as provided in the Act on assessment procedure (section 22a):
- The employer has given information to the Incomes Register that contains an error or omission
- Reports are filed late
- Reports are filed to the Incomes Register, but the employer has not used the correct method of reporting as required by law
- The employer fails to submit a report
- The employer does not submit a report until prompted to do so
For more information on the consequences of non-reporting, see Reporting income data: penalty fees
Under the provisions of § 26.2 of the prepayment act (Ennakkoperintälaki (1118/1996)), it is within the jurisdiction of the Tax Administration to cancel the prepayment registration of any party that neglects its information-reporting requirement.
6.2 Inclusion of foreign employers in the Employer Register
A foreign employer who regularly pays wages is obliged to report itself to the Finnish Tax Administration’s employer register if it has a permanent establishment in Finland for income taxation or if it is a tax resident in Finland due to having actual headquarters here.
Even if a foreign employer does not have a permanent establishment in Finland, it can still be registered as an “employer paying out wages regularly” in the employer register. Foreign employers with a valid registration in the employer register have the same obligations in Finland as Finnish employers. This means that they must withhold taxes from the wages they pay their workers, and that the workers do not need to apply for prepayments. However, foreign employers with no permanent establishment in Finland are not employers in Finland as defined in the act on income tax. In this regard, whether or not they are on the employer register is not important.
Companies that are on the register must withhold tax or tax at source from their employees’ wages and pay the related amounts on to the Finnish Tax Administration. You must apply the withholding rates that are indicated by each individual worker's tax cards. Foreign workers who stay in Finland for up to six months are issued a tax-at-source card or a non-residents’ tax card by their tax office. Workers who stay longer are issued a residents’ tax card.
Read more about the reporting obligations of foreign employers on the Incomes Register website: Reporting data to the Incomes Register: international situations, section 4 (Reporting obligation of a foreign employer).
6.3 Inclusion of foreign employee leasing companies in the Prepayment Register
A company that engages or is likely to start engaging in business activities can be entered in the prepayment register when the company submits an application. Being in the prepayment register is not mandatory.
We recommend that foreign companies that lease out employees to Finland register with the Prepayment Register in Finland. Finnish recipient enterprises do not need to withhold tax at source for the trade income they pay to foreign companies that have a valid prepayment registration in Finland. If the leasing company is not on the prepayment register, the recipient must withhold tax at source on the leasing company’s invoices.
A nonresident foreign company can be entered in the prepayment register when it has a permanent establishment in Finland or the company has its domicile in a country with which Finland has a treaty to eliminate double taxation (section 25, subsection3 of the Act on tax prepayments).
Starting from the beginning of 2026, the prepayment register is also open to nonresident companies whose domicile is in the European Economic Area (section 25, subsection 3 of the Act on tax prepayments).
Foreign corporate entities that are resident taxpayers are entered in the prepayment register under the same conditions as Finnish companies. For more information, see the Finnish Tax Administration’s page on How to get a prepayment registration.
Read more: Starting up business in Finland.
7 Instructions for recipient enterprises
7.1 General information
Recipient enterprises located in Finland may have other obligations and duties in addition to tax-related ones. For example, before concluding an agreement on the use of leased employees, the recipient enterprise must request the documents required by the Act on the Contractor’s Obligations and Liability when Work is Contracted Out (1233/2006) from the contracting party. For more information, see tyosuojelu.fi.
The definition of a recipient enterprise located in Finland includes companies established in Finland under Finnish legislation but also foreign companies if they have a permanent establishment for income taxation in Finland or if they are resident taxpayers in Finland due to the location of their actual headquarters.
7.2 Contractors’ reporting obligations
Recipient enterprises based in Finland need to notify the Finnish Tax Administration of any foreign companies from which they lease foreign employees for work performed in Finland (Act on assessment procedure, section 17, subsection 7). A recipient enterprise must submit a notification when it leases an employee to Finland in accordance with section 10, subsection 4c of the Income tax act and when the tax treaty between Finland and the employee’s country of residence contains a provision on leased employees according to which the leased employee’s wages may be taxed in Finland starting from the first day of work (section 17, subsection 7 of the Act on assessment procedure). The relevant information must also be submitted regarding any workers arriving from countries with which Finland does not have a tax treaty.
The states whose tax treaties contain provisions on the taxation of leased employees are listed in section 2.2 of these instructions. Finland’s current tax treaties are listed on Tax.fi (Tax treaties in force).
From the beginning of 2026, recipient enterprises must submit a contractor’s notification when they lease an employee to a Finnish ship or aircraft as referred to in section 13 of the Income tax act when the tax treaty stipulates that Finland has the right to levy tax on wages or if there is no tax treaty (section 17, subsection 7 of the Act on assessment procedure).
The recipient enterprise notice is submitted when a leased employee has worked on a Finnish ship or aircraft after 1 January 2026, even if the work had started earlier than that. In other words, the recipient enterprise notice is submitted on work performed after 1 January 2026 even if the work has already been started in 2025 or earlier.
The recipient enterprise must submit a separate notice for each foreign leasing company they do business with. The Finnish Tax Administration must be provided with the details of the abovementioned company, as well as its contact information and line of business.
Recipients also need to provide the details of any representative of the foreign leasing company as per § 8 of the Act on Posting Workers (Laki työntekijöiden lähettämisestä (447/2016)) as well as the related contact information. The Tax Administration also needs to be notified of any changes in the information. The above requirements apply to companies and self-employed entrepreneurs alike, if they are in the role of a recipient enterprise where leased workers work.
Recipients must provide the details of the foreign employer company that actually has the workers on its payroll. Even if the workers are leased through an intermediary – or through an employment agency – the notice must contain information about the foreign employer that the workers have signed an employment contract with, not about the agency.
The recipients must provide the information to the Tax Administration as soon as the first employee of the company in question starts working for them. The deadline for submittal of this report is the end of the calendar month after the month when the workers started.
In the same way, when any changes in the information have occurred, the deadline for notifying the Tax Administration is also the end of the following month. This refers to issues such as changes in the contact details of the foreign companies, etc.
When a contract ends before its planned end date, or when a leased worker stops working as a member of the service recipient’s workforce, the previously reported end date must be corrected. Temporary breaks in contracts or in the work of the leased workers do not need to be reported. A contract – or the work of a worker leased from a foreign company – is treated as having ended when nobody from the foreign company has been working as a member of the recipient’s workforce for six months.
The recipient enterprise must submit the notice and any changes in MyTax by the end of the following calendar month. Alternatively, the information can be submitted with the form "Report submitted by the hirer of leased employees" (6146).
7.3 Consequences of failure to declare
Recipient enterprises that fail to file the above notices or that submit a notice late can be fined up to €15,000. Fines are not imposed on natural persons, unless the failure relates to reporting obligations associated with running a business or agriculture or forestry operation (§ 22a of the act on assessment procedure).
The registration of a recipient enterprise in the prepayment register can be cancelled (§ 26.2 of the act on tax prepayments) if the notice is not submitted at all.
7.4 Contractors’ obligation to withhold tax at source for trade income
Recipient enterprises have an obligation to withhold tax at source for any trade income paid to a foreign company if the payment relates to a work performance in Finland.
The payer of trade income must not withhold tax at source if:
- The foreign company is prepayment-registered in Finland;
- The foreign company is able to present a 0% tax-at-source card to the payer, or
- Show other documentation establishing that withholding is not necessary. This means documentation that proves that the foreign company cannot be treated as having a permanent establishment in the prevailing circumstances.
If trade income is paid for work falling into the following categories: building, earthmoving, water construction or other construction, installation, assembly, shipbuilding, transportation or cleaning services, caregiving or medical care services, the customer/payer cannot refrain from collecting tax at source unless the beneficiary is entered in the Prepayment Register in Finland, or shows a zero-rate card (section 10e, subsection 2 of the Act on the taxation of nonresidents’ income).
Visit the BIS information service site ytj.fi to check whether any foreign company has a valid registration. The checking is free of charge.
Read more about how tax at source must be withheld on amounts paid out as “trade income”: Starting up business in Finland.