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Taxation of employees from other countries

In force until further notice

Bulletin for taxpayers

1 Social security contributions

Your Finnish employer must collect an employment pension premium and an occupational injury insurance premium from your pay. The employer pays these contributions to insurance companies.

Furthermore, you must usually pay a health insurance premium in connection with the taxation. The Tax Administration includes this premium in the withholding tax rate entered on the tax-at-source card or the tax card. However, if your stay in Finland is shorter than 4 months or if you have a certificate of a posted employee (A1/E 101), this premium is usually not collected from you.

2 Taxation of persons staying in Finland for a maximum of 6 months

If you are leased employee from for example Denmark, Estonia, Iceland, Latvia, Lithuania, Norway, Poland or Sweden, there is special information for you in article Leased employees - taxation in Finland - prepayment of tax)

For tax purposes, persons present in Finland for a maximum of six months are considered non-residents. They pay tax in Finland only on income received from Finland. Finnish employers collect a 35-per-cent tax at source on their wages. Before collecting the 35 % tax, the employer can deduct from the salary a non-resident’s deduction (= € 17 per day or € 510 per month). This provides that the deduction is mentioned in the tax-at-source card issued by the local tax office

Separate provisions apply to performing artists, sportsmen and athletes, see item 2.2.
In addition to cash, taxable pay includes any benefits in kind, valuated according to the National Board of Taxes’ decision.

Non-residents do not have to file an income tax return in Finland. However, non-residents usually do have to report the income earned in Finland when they file their income tax return in their home country.

A tax-at-source card and an IDnumber are needed

The employee from abroad should visit the Finnish local tax office in person. It makes the procedure of receiving the Finnish ID number easier. In the tax office are also available forms  .

Is the salary from Finland at least 75 % of the yearly income?

A person coming from EU/EEA-states and paying the 35% tax can afterwards apply for a lower tax if the salary he received from Finland was at least 75% of his worldwide earned income in the year in question. On the form 6148a he can apply to be taxed progressively instead of the 35% tax. To the application must be enclosed a certificate of the tax authorities in the person’s home country.

2.1 Lecturers, teachers and frontier workers


A fee paid for lecturing in an event organized by a university, school or other Finnish entity is considered salary income. Tax at source is collected on the fee even in cases where the recipient runs a firm of his own. However, if considered teachers, lecturers (see below) from certain countries may be tax-exempt in Finland because of a tax agreement.

Teachers and researchers

According to the provisions of the international tax agreements, teachers and researchers from certain countries may be entitled to a full exemption of income tax in Finland. This exemption sometimes extends itself to persons staying longer than six months in Finland. For 2013, the situation is the following: To be eligible for the said exemption, teachers and researchers may reside in Finland for a maximum of two years, and they must be coming from one of the following countries: Egypt k), Spain k), the United Kingdom x), or Japan. If the teacher or researcher stays in Finland over two years, he has to pay tax in Finland from the date when he first arrived to Finland.

k = The exemption requires an invitation by a Finnish scientific research institution or institution of higher education; in addition, it only concerns the scientific mission outlined in the invitation.
x = Teachers only are entitled to this exemption, which also requires documented proof of taxation in home country.

Teachers from France are eligible for the tax exemption for the first two years, even when residence in Finland continues for a longer period. Nevertheless, persons moving to Finland permanently are not eligible for the exemption.

Frontier workers from Sweden and Norway

The tax agreement between the Nordic countries stipulates that the only country of taxation for frontier workers is their country of residence. For tax purposes, frontier work means that a taxpayer, permanent resident of either Sweden or Norway, living in a municipality neighboring the national border with Finland, works in Finland in a Finnish municipality neighboring the national border. Finland does not collect income tax for a frontier worker’s pay. However, the Finnish employer usually must withhold the health insurance premium and other social security contributions mentioned in Item 1. In addition, if the work is not only done in a municipality neighboring the national border but partially also in another, non-frontier municipality, the frontier worker must pay tax in Finland for the pay related to non-frontier work.


International tax agreements have provisions concerning students’ tax reliefs. For more information, please read page (for foreign students and trainees).

2.2 Sportsmen, athletes and performing artists

If a nonresident artist gives a performance in Finland, or if a nonresident sportsman participates in an event in Finland, this is a personal activity of the individual concerned, and under Finnish tax rules, any compensation paid for it will be taxable in Finland. No importance is attached to payment arrangements, i.e. to whose bank account the compensation is actually paid. The compensation is assessed in Finland at the 15-percent rate regardless of whether it is considered wages, salary or other income. The tax rate will be 15% even if the payment is routed to a foreign concert agency or other foreign corporate entity. No deductions are usually allowed. However, as of 2010, sportsmen, athletes and performing artists residing in an EU/ETA-state can be entitled to deduct their direct costs on request. This alternative will mean that the tax will depend on the progressive scale. If the calculation – progressive tax minus deductions – results in less tax than the flat 15% tax at source, this is a feasible procedure. On request, the tax office can perform the necessary calculations and issue a tax card containing the information.

Even though the employer/payer is not entitled to deduct the costs on behalf of the sportsman, athlete or performing artist, accommodation, freight and transportation costs can usually be fully reimbursed against receipts and documentation to the sportsman, athlete or performing artist. Furthermore, the employer/payer is entitled to pay tax-exempt domestic per diem allowances to the sportsman, athlete or performing artist.

It should additionally be noted that a personal activity of the individual means playing in a sports team, performing music etc., or participating in a competition. Thus, this tax rule does not refer to sports-related or arts-related professionals such as drama director of a theatre, choreographer, theatrical set decorator, sports referee or sports coach.

Example 1.
An organizer of a summer event pays a fee to a foreign symphony orchestra. The fee is considered the orchestra’s income, on which the organizer withdraws 15 per cent tax. The orchestra is liable to pay tax on its income in its home country, where the double taxation is eliminated. Monthly wages paid by the orchestra to its members are not taxable income in Finland.

Example 2.
A non-resident athlete appears in a television commercial made in Finland but not as an athlete. 35-per-cent tax at source is collected in Finland on his fee.

Example 3.
A foreign artist not only performs but also teaches in Finland. Tax of 35 per cent is collected on the fee paid for the teaching.

The tax at source must be collected on fees paid on artists’ or athletes’ performances regardless of whether the payment is made in the form of a wage, and regardless of the beneficiary’s person. The provision means that the amount paid to an agent by a performing artist or sportsman/athlete or their organization is no longer deductible from the amount subject to tax at source.

Sportsmen or athletes coming from the USA

Only performing artists, sportsmen and athletes coming from the USA are entitled to exemption from Finnish taxation because of a tax agreement. If the fee received in Finland, including reimbursed costs, does not exceed U.S. $20,000 during a tax year, fees paid on the personal activity are exempt from Finnish taxation.

Foreign public entity as the employer

Sometimes a performing artist, sportsman or athlete works in Finland for a public entity of his home country. If fees are paid to such an entity, they usually cannot be taxed in Finland due to tax agreements. Nevertheless, it is required that the foreign public entity be the original contracting partner. If a claim is made that no tax at source should be collected, it must be shown, in the application for the tax-at-source card, that a public entity is concerned and that it is paying a fee to the artist/sportsman/athlete on work carried out in Finland. The employer cannot be considered a foreign public entity just because it is a ”municipal theatre”.

2.3 Advance ruling

If it is unclear whether tax at source must be collected or whether the taxpayer is entitled to deduction or exemption, an advance ruling can be requested from the Tax Administration under section 12a of the Tax-at-Source Act. The ruling carries a charge and can be appealed to the administrative court.

If the taxpayer is entitled to a deduction or exemption described above but the payer has not considered this when the tax was withheld, the taxpayer can request a refund from the Tax Administration.

3 Taxation of persons present in Finland over 6 months

The earned income of persons staying in Finland for more than six months continuously is taxed according to the same rates as that of the permanent residents in Finland.

The six-month period is not associated with the calendar year. For instance, a person staying in Finland from August 15 to February 15 is considered a resident during his stay.

The stay in Finland is considered continuous when absence during the stay is of a temporary nature.

Taxes of a resident include:

  • Progressive state income tax on earned income (See table below)
  • Flat tax rate on capital (investment) income
    • Starting 2012: 30%; on income exceeding 50 000 €: 32%.
  • Municipal tax on earned income
  • Church tax.

In addition, real estate tax is levied on all real property situated in Finland.

Incometax table 2013 (state income tax on earned income)

Taxable income Tax at the lower limit Tax rates for amounts exceeding the lower limit
€16 100 to 23 900 €8  6.5%
€23 900 to 39 100 €515 17.5%
€39 100 to 70 300 €3 175 21.5%
€70 300 to 100 000 €9 883 29.75%
€100 000 - 18 718,75 31.75%

Municipal tax rates range from 16.25% to 22%, depending on the municipality where you live, i.e. your domicile. Similarly, church tax varies from 1% to 2%, depending on the domicile. The health insurance premium for 2013 is 2.04%.

Employers collect tax from wages according to the tax card provided by the local tax office. If no card is presented, 60 per cent tax is withheld. If it is uncertain whether the above-mentioned six-month limit will be exceeded, tax at source is collected during the first months. A tax card will be issued when it has been verified that the time limit will be exceeded. Wage earners whose employer does not operate in Finland must contact the local tax office for instructions for prepayment tax. Persons deemed as residents must file an income tax return in Finland. The wage earner’s income tax return form is available also in English.

Special groups

With regard to residents, tax exemption or entitlement to deduction can only be based on tax agreements:

  1. For teachers and researchers from certain countries, see item 2.1 above, or
  2. For students from certain countries, see  (for foreign students and trainees).
  3. For performing artists, sportsmen and athletes from the USA, see item 2.2 above. Tax exemption is not granted to performing artists, sportsmen and athletes who move to Finland with their families or if Finland is deemed their actual country of residence for any other reason.

In ambiguous cases, the question regarding the right to deduction or exemption can be submitted to the Tax Administration for a ruling. The ruling carries a charge.

Foreign key employees (Provisional Act)

Foreign ‘key employees’ arriving in Finland for more than six months can pay a flat-rate 35-percent tax on their earned income instead of progressive income tax. The 35-percent rate is applied to:

  1. Persons working as teachers or researchers in an institution of higher education in Finland; or
  2. Persons whose monthly cash salary is at least €5,800 throughout their visit in Finland and whose duties in the service of a Finnish employer require special skills.

Application to the local tax office for the tax card entitling to this benefit must be made at the latest within 90 days from the beginning of the work in question. The benefit is granted for a maximum of 48 months. It is not granted to a person who has been a resident in Finland at any time during the five years preceding the beginning of the key person’s work assignment. The person concerned must file an income tax return in Finland.

Any other earned income is taxed according to a progressive rate. The income subject to tax at source affects the tax rate applied to other income earned during the same time.

Page last updated 4/20/2017