Grounds for pension paid to a non-resident taxpayer

Report the grounds for the pension if the income earner is a non-resident taxpayer and you are reporting a taxable pension. See document Benefits – Codes – Income types on the Documentation page to check the income types for which the data must be reported.

This data is used in the taxation of a non-resident taxpayer and for the fulfilment of obligations on Finland’s international exchange of tax data. In tax treaty situations, the taxation of pensions is usually affected by whether the pension was paid on the basis of a public or private service. If the pension paid to the income earner includes components taxed on different grounds, each pension component must be reported as a separate payment.

Earnings-related pension paid by a public sector organisation, not earned from business activities

Usually, the source country has the right to tax pensions earned during the service of a public organisation.

Earnings-related pension paid by a public sector organisation, earned from business activities

Tax treaties often define that provisions on pensions paid for a public service do not apply to pensions that have been earned for work carried out in conjunction with the business operations of a public organisation.

Non-earnings-related pension paid by the Social Insurance Institution of Finland (Kela) or the State Treasury

Select this option when Kela or the State Treasury pays a statutory pension to a non-resident taxpayer.

Other payment based on social security legislation

Earnings-related pension earned in activities other than a public organisation or the private or third sector can usually be taxed in the income earner’s country of residence. Usually, Finland has the right to tax pensions based on social security legislation (under nearly all tax treaties). The social security legislation is considered to cover accident and occupational disease insurance, unemployment insurance and health insurance.

Other payment not based on social security legislation

Select this option when the pension in question is a voluntary pension purchased independently or by the employer or, for example, a pension based on motor insurance or other risk insurance. Motor insurance comprises a mandatory insurance cover, similarly to group life insurance, patient insurance and other similar insurance.