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Payments of dividends, interest and royalties to nonresidents

Date of issue
Record no.
In force until further notice
Authorization directive
Act on the Tax Administration (503/2010), section
Replaces guidance

This is an unofficial translation. The official instruction is drafted in Finnish and Swedish languages.

Section 7 has been updated on 9.2.2017 to take into consideration the recent legislative changes. The instruction is currently undergoing an extensive updating process during which the instruction will be completely revised.

1 Definition of 'nonresident'

Foreign corporate entities and foreign citizens who live overseas are not fully liable to pay tax i.e. they are nonresidents. They must pay tax in Finland on their income from Finnish sources. When Finnish citizens move away to live overseas they do not become nonresidents until after the beginning of the fourth calendar year after they moved away.

If necessary, taxpayers can submit an application for a tax-at-source card to the local tax office in order to have the tax office examine the extent of their tax liability in Finland.

2 Tax rate and identification of the beneficiary

The legal act that governs the tax treatment of nonresidents is called Act on the Taxation of Nonresidents' Income — Laki rajoitetusti verovelvollisen tulon verottamisesta (lähdeverolaki). Unless bilateral tax treaties with Finland set a lower percentage or unless the income is exempt from tax withholding, the payer of dividends, interest or royalties to nonresidents must withhold tax upon payment, the rates being the following (as provided in § 7, Act on the Taxation of Nonresidents' Income):

  • Tax must be withheld at 20.0%, if the beneficiary is a corporate entity
  • Tax must be withheld at 30.0%, if the beneficiary is an individual taxpayer or a comparable taxpayer (other than a corporate entity)
  • Tax must be withheld at 30.0%, if no information whether the beneficiary is a corporate entity or an individual is available at the time when the payment is made.

The details needed for identification are the beneficiary's name, date of birth or identity code number, any other official identification code, and the beneficiary's address in the state of tax residence and a certificate issued by that state confirming the beneficiary's tax residency. If it is unclear what the correct withholding rate should be at the time when the payment is made, the beneficiary can submit an application for a tax-at-source card to the local tax office in Finland. Additionally, the payer or the beneficiary can ask the tax office to give an advance ruling on the question of tax withholding at source. Tax offices give advance rulings against a fee.

Under Income Tax Act, 'corporate entities' include limited liability companies, cooperative enterprises, savings banks, mutual insurance companies, and any comparable legal person.  Additionally 'corporate entities' also include the foreign corporate entities that are similar to Finnish corporate entities (§ 3, Income Tax Act).

Under the national legislation of Finland, interest payments to nonresidents are usually exempt from tax in Finland. Furthermore, under Directive 2003/49/EEC, there is no tax on royalty payments to associated companies.

Form 6214b takes the current rules into account that are derived from the national legislation, bilateral tax treaties, the Savings Directive 2003/49/EEC, the Directive on interest and royalties and the Parent-Subsidiary Directive. Form 6214b displays the withholding rates to be applied when payments to nonresidents are made. The withholding at source must concern the sum total of dividends, without regard to any provisions of the national legislation on whether the dividends are subject to tax.

Payers can withhold tax as instructed on Form 6214b only if the beneficiary has presented documentation to the payer showing that a bilateral tax treaty is applicable.  Furthermore, the beneficiary must give complete details regarding the identity (see above for Identification of the beneficiary).

3 Rules on dividends received by residents of EEA countries

The following principles that govern the payment of dividends in the EEA are also applied to payments of interest on the capital, an investment share or an additional share of cooperative enterprises, on distributions of funds of domestic savings banks, on payments of profits on their investment shares and of interest, and on the interest accrued on the guarantee capital of a mutual insurance company and an insurance association.

Corporate entities as beneficiaries

Tax to be withheld is:

  • 0% if the payment of dividends goes to company within the meaning of the Parent-Subsidiary Directive 90/435/EEC that holds at least 10% of the capital of the payer company directly (§ 3.6, Act on the Taxation of Nonresidents' Income).
  • 0% if the payment goes to a corporate entity resident in the European Economic Area that is similar to a Finnish corporate entity (concern also Liechtenstein starting from year 2011), and
    • the dividends would be exempt from tax under § 6 a of the Finnish Business Tax Act (EVL) if a Finnish corporate entity had received them. Dividends are taxable income if:
      • The shares are investment property to the beneficiary of dividends (in reference to § 11, Business Tax Act, i.e. the shares must be obtained by a financial institution, insurance institution or pension institution in order to invest funds), and the beneficiary is not the corporate entity with the meaning of the EC Parent-Subsidiary Directive that owns at least 10% of the paying company at the date of distribution of dividends, or if
      • The distributing company is stock-exchange listed and the beneficiary is a non-listed corporate entity that owns less than 10% of the share capital of the distributing company.  A company is stock-exchange listed if its shares (at the time of making the decision on the distribution of dividend) are publicly traded in a regulated market which is supervised by public authorities in Finland or overseas (for precise information, see § 33a, second subsection of Income Tax Act) and if
    • the beneficiary does not receive a full credit for the Finnish tax in its country of residence (§ 3.5, Act on the Taxation of Nonresidents' Income).

The corporate entity must present adequate documentation to the Finnish Tax Administration to facilitate appraisal as to whether the dividends would be exempt if they were paid to a Finnish corporate entity. To provide such documentation, Form 6162e can be completed. In addition, beneficiaries must also complete Form 6161e and obtain endorsement to it from the tax authorities of their country of residence to give details on their tax treatment there.

If the general requirements for exemption are fulfilled, and the endorsed Form 6161e shows that the corporate entity is not liable to pay any tax on the dividends in its country of residence, then the payer must not withhold tax. To fill out Form 6161e is not necessary in cases where the payer is aware that no tax on the dividends is levied in the country of residence.  

Example: The Swedish company called XAB that is not stock-exchange listed and is similar to a Finnish corporate entity receives €10,000 in dividends from a Finnish nonlisted company. The payer is aware that no tax is levied in Sweden on dividend income received from a nonlisted company. The payer has also been given an explanation on Form 6162e (or otherwise) that proves that XAB is not listed on a stock exchange, and that its holding of the Finnish nonlisted company is not investment property for XAB. Conclusion: Under the circumstances, the payer is able to treat the dividends as exempt from tax under § 6a of the Finnish Business Tax Act (EVL) as if a Finnish corporate entity had received them. Conclusion: The payer is entitled to pay the entire dividends to XAB with no withholding.

However, it is more typical that foreign corporate entities do have to pay tax in their countries of residence on the dividends sourced in Finland. If the tax withheld at source will not be fully credited in the country of residence and if the dividends would be tax-exempt if the beneficiary were a Finnish corporate entity, then the foreign corporate entity is entitled to receive the dividends from Finland as exempted from taxes. The tax withheld at source is fully credited in the country of residence, if it can be deducted against the taxes of the corporate entity during the same tax year or a later tax year. However, if the beneficiary makes a loss during the tax year when the dividend income is taxed, then the tax withheld at source is not fully credited in the country of residence, and consequently, it can be refunded. The information on not receiving full credit is usually not available until the tax assessment process has been completed (in the country of residence). For this reason the payer of dividends cannot take this fact into account when paying out the dividends and simply withholds tax on the payment. The beneficiary must complete Form 6163 (at the end of this instruction) and submit it to the Tax Administration to ask for a refund, enclosed with Form 6162e and with a document proving that no full credit is given for the taxes that were withheld in Finland (this may be Form 6161e with an endorsement by the tax authorities of the country of residence or another similar document).

Nevertheless, if the dividends were taxable if received by a Finnish corporate entity, the above procedure that concerns foreign corporate entities in the EEA cannot be applied. Instead, the amount of tax to be withheld at source will be determined by tax treaties or the Act on the Taxation of Nonresidents' Income (see the table on Form 6214b for specific withholding rates).


When paying dividends to individuals the payer must withhold tax unless the table on Form 6214b shows that the rate of withholding equals 0% as determined by the tax treaty concerned.

If the individual beneficiary resident in the EEA does not receive full credit on the tax withheld in Finland from his or her state of residence during the same tax year or the ensuing tax years, he or she can lodge a claim to the Finnish Tax Administration stating that his/her dividends must be taxed in the same way as if the beneficiary were a Finnish tax resident that is, under the rules defined in the Act on Assessment Procedure (concern also Liechtenstein starting from year 2011). Such claims are likely to be lodged rarely because the tax assessment according to the Act on Assessment Procedure does not usually make the amount of taxes smaller for the taxpayers. The example below describes a situation where dividends come from a nonlisted company and where the tax assess­ment according to the Act on Assessment Procedure is more favourable. It is typical that the first opportunity to lodge the claim will not arise until after the tax assessment process has been completed in the country of residence. The individual beneficiary must submit an application written in free text to Helsinki Area Tax Office and enclose Form 6161e and Form 6164. If Helsinki Area Tax Office is not legally competent to resolve the matter the application will automatically be forwarded to the competent unit of the Finnish Tax Administration.

For more information on residents' taxes on receipts of dividends, click Investments.

Example: Ragni who is a resident of Sweden holds stock in the A Oy, a nonlisted Finnish limited-liability company. The total arithmetical value of Ragni's holding equals €1,500,000. In 2014, she receives €80,000 in dividends and the payer withholds 15% (€12,000) of Finnish tax at source on payment. The dividend amount stays below 8% of arithmetical value and also stays below €150,000, hence 25% (€20,000) of dividend is taxable capital income. Tax-rate of capital income is 30%. If Ragni were a Finnish tax resident she would have paid tax €6,000 (€20,000 x 30%). Consequently, if she presents an explanation to the Finnish Tax Administration after the year of dividend payment stating that no full credit in Sweden is paid to her for the Finnish tax that was withheld; her taxes will be assessed as if she were a resident of Finland. As a result, Finland would pay a refund of €6,000 (€12,000 - €6,000) to Ragni.

4 Dividends for nominee-registered shares

The provisions of the Act include an exception (§ 10 b, Act on the Taxation of Nonresidents' Income) concerning the general requirement to identify the beneficiary in all reporting. This exception applies to stock that is nominee-registered (in Finnish: osakkeiden hallintarekisteri; in Swedish: förvaltningsregister för börsaktier) If the payer or account operator knows the beneficiary's country of residence on the date of payment and that country has a bilateral tax treaty with Finland, and dividends are being paid on nominee-registered shares, the payer may withhold tax at the 15%-rate even if no identification of the beneficiary has been available unless the bilateral tax treaty require a higher withholding rate. It is also required that the account operator or its agent has an agreement made with the foreign asset management firm under which the foreign party commits itself to report the name of the country of residence and, on request by the Finnish Tax Administration, commits itself to give the requested details on the beneficiary's identity and a certificate that proves the beneficiary's country of tax residence. On the date of payment, the asset management firm must also be a resident of a country with a bilateral tax treaty with Finland and registered by the Finnish Tax Administration as a custodian: Custodianregister.

After the dividends have been paid the Finnish account operator is entitled to adjust to the withholding as necessary up to the end of the year of payment, if the amount initially withheld has been too high. However, such adjustments require that the beneficiary has given the details needed for identification and thus a separate annual information return can be filed that concerns this beneficiary only (Information on payments to persons with limited tax liability in Finland, Form 7809e). The type of payment on the information return must be E5 when the payer has adjusted the withholding, i.e. refunded some withheld taxes to the beneficiary during the year of payment. If the initial withholding on dividend payment has been 30 % it cannot be adjusted to 15% only because the information on the country of residence (having a bilateral tax treaty) has become available. Similarly, if the payer first withheld 15% on the basis of the name of the country of residence, the withholding cannot be adjusted down to a smaller rate (as specified by a bilateral tax treaty) unless the beneficiary give the details needed for identification.

If a Finnish account operator adjusts the withholding on the dividends paid on nominee-registered stock, the correction must also be reflected in the account operator's Tax Account. It is important that both the annual information on Form 7809e and the company-specific dividend information given on Form 7812 (line 25) show the end-of-year balances i.e. the final amounts withheld after all the adjustments were made.

5 Nonresident nonprofit organisations of EEA

A nonprofit organisation residing in the EEA is tax exempted in Finland if it fulfills the requirements under the Finnish Income Tax Act of nonprofit activity, and if its income would be exempt for a Finnish nonprofit organisation (concern also Liechtenstein starting from year 2011). No importance is attached to the place where the organisation has operations. Its income may also fall into other categories than dividend income. The Finnish payer is usually unable to determine whether a nonresident organisation is nonprofit or not. For this reason, the Finnish payer must withhold source tax on payment. The nonprofit organisation can submit a claim for refund plus an explanation of its nonprofit nature to the Finnish tax authorities.

6 Refund of excess tax

During the year of dividend payment, any refunds concerning dividends can only be handled by the payer or by the payer's authorised custodian bank in Finland (acting on behalf of the Finnish payer company). To start this process, the beneficiary of the dividends should contact his own bank. If the tax has not been corrected during the year of payment, the beneficiary can file a refund claim to the Finnish Tax Administration later. In this case please use the forms for refund of tax at source (you find the forms at the end of this instruction).

If other income than dividends is in question, please use the forms for refund of tax at source (you find the forms at the end of this instruction) earlier i.e. during the year of payment.

7 How to pay withheld tax forward and give annual information

Tax returns on self-assessed taxes, including dividend withholding tax, are to be filed electronically. For example, the Tax Administration's MyTax may be used ( The due date for filing and paying self-assessed taxes is the 12th of each month. If the 12th falls on a Saturday, Sunday or a public holiday, the last day to file is extended to the next business day.  Returns filed online and on paper have the same due date.  Filing the tax return on the paper form is allowed only under exceptional circumstances. Self-assessed taxes (previously often referred to as Tax Account taxes) are paid quoting the bank reference number for self-assessed taxes.

Complete your tax return on self-assessed taxes to report the information on taxes withheld at source. Tax withheld at source on dividends is Type 39 and on interest and royalties — Type 69. Payers must issue written receipts to beneficiaries: Certificate on final tax in Finland (dividend, interest and royalties).

For more information, visit Filing and paying self-assessed taxes

You must file separate information returns on your payments to nonresidents (7809e) and not use the same annual information return as for Finnish residents. The last date to file the annual information return is the end of January the following year. They should preferably be electronically filed. If you do not have the opportunity to use e-filing, use the paper form 7809e. Specific instructions regarding nominee-registered shares are given above in section 4 of this article. These instructions also apply to other dividends. For example: if you need to adjust the taxes that you have withheld on other dividends after you have paid the withheld amounts forward, you must use the E5 Type of Payment when reporting the taxes withheld on Form 7809e.

The tax authorities utilize the information captured from annual information returns for purposes of international information exchange between the countries that levy taxes.

8 Notes on specific situations

Bilateral tax treaties usually include clauses that prevent Finland from collecting income tax on profit shares of mutual funds paid to residents of the other tax-treaty state (court case KHO no1999/1600) (exceptions include the bilateral tax treaty with Germany). Tax at source must always be withheld if the bilateral tax treaty exceptionally allows Finnish taxation of exceptional incomes (Article 21) and the payment does not fall into the category discussed by the Savings Directive 2003/48/EEC.

The foreigners serving in the diplomatic mission of another country do not pay tax to be withheld at source in Finland (this includes their family members) on receipts of dividends, interest and royalties. Payers are entitled to not withhold any tax if sufficient explanation has been presented to them proving the beneficiary's circumstances.

If a local tax office has issued appropriate documentation, payers can also apply the withholding rates of bilateral tax treaties when paying dividends to residents i.e. Finnish citizens fully liable to tax. This requires that the local tax office has deemed that the beneficiary is a resident of another country (not Finland) for the purposes of applying the bilateral tax treaty. Concerning payments of interest, the local tax office may issue a specific certificate on Form 5050a, and concerning dividends, Form 5001.

Page last updated 2/14/2017