Reporting data to the Incomes Register: international situations

These instructions replace the earlier instructions titled Reporting data to the Incomes Register: international situations. The instructions have been updated and the following sections have been supplemented:

• Clarified the instructions and added new examples of reporting data.
• Section 1.7: Added the instructions on the issuance of the Tax Identification Number (TIN) to a non-resident taxpayer, as well as on reporting an artificial identifier when an income earner does not have a Finnish personal identity code registered in the Population Information System.
• Section 2.3.1: Clarified the instructions on the calculation of the amount of wages for insurance purposes.
• Section 2.3.2.2.2: Clarified the instructions on reporting when an employee has regular work periods in two different countries.
• Section 2.3.6: Clarified the instructions on the determination of the social insurance contributions when a person insured under YEL is working abroad.
• Section 2.4.2: Clarified the instructions on the correction of NT2 data, and added a new example.
• Added a new Section 2.5.1.1.1 on the reporting of stay periods in NT1 data, as well as added several new examples.
• Added a new Section 2.5.3 on the reporting of data when the tax withholding obligation changes during a work period in another Nordic country.
• Section 2.5.4: Clarified the instructions on the correction of data in Nordic working situations, and added a new example.
• Section 2.7: Clarified the instructions on the correction of data in international working situations, and added a new example.
• Added a new Section 4.5.4.3 on the obligation of foreign employers to report data when an employee has work periods both in Finland and abroad during the same pay period.
• Section 5.5: Clarified the instructions on reporting wages paid by an international specialised agency.
• Added a new Section 5.6 on the reporting of wages paid by a diplomatic mission located in Finland.
• Section 5.7: Clarified the instructions on the reporting of royalty paid to a non-resident taxpayer.

The amounts of employee contributions used in the examples have been updated to the 2021 level. Some minor technical corrections and additions have also been made to the instructions.

1 Obligation to inform in international situations

1.1 General information on reporting international information

The income paid to an income earner for work performed abroad and other information must be reported to the Incomes Register on an earnings payment report when the information is required for taxation purposes or when the income earner is insured in Finland. Correspondingly, the income paid for working in Finland to an employee who came to Finland from abroad is reported using an earnings payment report.

Income data must be reported to the Incomes Register in international working situations whenever the payer has an obligation to inform some data user using the Incomes Register. For example, if the income earner is insured in Finland, the payer has an obligation to inform the Incomes Register for the use of earnings-related pension providers and other social insurance providers. In such a situation, it does not matter whether the income is paid by a foreign or a domestic employer or where the work is performed.

A Finnish employer must report information to the Incomes Register on an earnings payment report in the following international situations:

• Income paid for working abroad (to persons living abroad and in Finland).
• Income paid for working in Finland to an income earner coming to Finland from abroad to work .
• Wages paid by a foreign group company for working abroad, when a Finnish employer has posted an employee abroad and the employee is insured in Finland.
• Wages for insurance purposes agreed for the work abroad.
• Additional information on the work abroad for the Tax Administration (the so-called six-month rule).
• Additional information on work in a Nordic country for the Tax Administration.

In these instructions, a Finnish employer means a natural person living in Finland, a company established in Finland, or a foreign company with a permanent establishment in Finland. A foreign company's permanent establishment in Finland is deemed equivalent with a Finnish employer.

No report is submitted to the Incomes Register if a Finnish company that engages in business activities in a permanent establishment in another country pays wages that burden the result of the permanent establishment for work performed abroad to an employee who is a non-resident taxpayer. If work has also been performed in Finland, a reporting obligation exists only if the work was performed during the pay period solely or mainly in Finland in accordance with section 10(1)(4) of the income tax act (tuloverolaki 1535/1992). If the work was performed solely or mainly in Finland, the wages for the entire pay period are reported, i.e., also the share of the work performed abroad. Additionally, a report must always be submitted if the employee is insured in Finland.

1.2 Foreign employer

In certain situations, a foreign employer is also obligated to report information to the Incomes Register on wages it has paid. Furthermore, a foreign employer who leases employees to a service recipient in Finland must submit information to the Incomes Register for taxation purposes, for example concerning the employee's work in Finland

In taxation, a company that has not been established in accordance with Finnish law or that has a registered domicile elsewhere than in Finland will be considered a foreign employer. Read more in the Tax Administration's guidelines Starting up a business in Finland.

A foreign employer must submit an earnings payment report to the Incomes Register in the following situations:

• Income is paid to an income earner working in Finland, and
  • the income earner is insured in Finland;
  • the income earner stays in Finland for more than six months, even if they are not insured in Finland;
  • the employee is a leased employee who is a non-resident taxpayer, and Finland has the taxing right to the wages according to a tax treaty between the employee's country of residence and Finland, or there is no tax treaty between the country of residence and Finland.
• An income earner working abroad is paid income, and the income earner is insured in Finland.

Furthermore, a foreign employer who leases an employee coming from abroad to a service recipient in Finland must submit an employee leasing notice to the Incomes Register for the Tax Administration's use.

If a foreign company does not have a permanent establishment for income taxation in Finland, it is not required to report the non-wage compensation for work to the Incomes Register, even if the income earner was living in Finland.

If a foreign company has a permanent establishment for income taxation in Finland, it must report data on the non-wage compensation for work to the Incomes Register in the same manner as a Finnish company. However, this data does not need to be reported if the company has paid a non-wage compensation for work to a non-resident taxpayer for work performed abroad or has paid a non-wage compensation for work that is not deemed to be earned income under section 10 of the Income Tax Act.

For more detailed instructions on reporting for foreign employers, see Section 4, Reporting obligation of a foreign employer.

1.3 Representative of a foreign employer

Either the foreign employer or its representative is obliged to submit data to the Incomes Register. A foreign employer is obligated to submit an earnings payment report and an employer's separate report to the Incomes Register if the employer is registered in the prepayment register. If the employer is not registered in the prepayment register, a representative of the foreign employer has a secondary obligation to report the information required for taxation to the Incomes Register. If, however, the representative does not report the information, it must be reported by the foreign employer. Provisions on the representative have been laid down in section 8 of the Act on Posting Workers.

The representative is obligated to report the following data to the Incomes Register on behalf of the employer (section 15a, subsection 3, act on assessment procedure (laki verotusmenettelystä 1558/1995):

• The wages paid by a foreign employer for work performed in Finland when a foreign employee leasing company has leased an employee to a service recipient in Finland and when the tax treaty between the employee's country of residence and Finland does not prevent Finland from taxing the wages.
• Wage income paid by a foreign employer when the wage earner stays in Finland for a period exceeding six months.

Furthermore, the representative must submit an employee leasing notice when the employee begins work in Finland. The employee leasing notice must include information on the estimated duration of the leased employee's work and the amount of wage, and the service recipient, when the tax treaty between the employee's country of residence and Finland does not prevent Finland from taxing the employee's wages.

Provisions on the representative's obligation to report the above-mentioned information are laid down in section 15a of the act on assessment procedure.

However, a foreign employer always has a reporting obligation to insurers when the income earner must be insured in Finland regardless of whether the employer has a representative or not.

1.4 Income earners with resident and non-resident tax liability

The payments made are reported to the Incomes Register on an earnings payment report. The report and the income types are the same for all income earners, both resident and non-resident taxpayers. When the income earner is a non-resident taxpayer, certain additional income earner information must, however, be submitted on the earnings payment report, see Section 1.5. Resident and non-resident tax liability are information affecting taxation. They have no effect on the obligation to provide insurance.

Persons whose residence and home are in Finland or who reside in Finland for more than six months consecutively, are deemed resident taxpayers. As a rule, a Finnish citizen who has moved abroad is considered to be a resident taxpayer for three calendar years following the year of the move abroad.

Persons whose residence and home are abroad, and who do not reside in Finland for more than six months consecutively, are deemed non-resident taxpayers. A Finnish employer must submit a report of payments made to a person who is a non-resident taxpayer, regardless of whether tax at source must have been collected or tax withheld from the payment, or whether the person is insured in Finland. Such a report must also be submitted for compensation paid to a non-resident taxpayer for work performed abroad.

A company is deemed to be a non-resident taxpayer if it has not been established in accordance with Finnish legislation, or if its registered domicile is not Finland. Non-wage compensation for work paid to a company that is a non-resident taxpayer (other than a natural person) is reported to the Incomes Register only if tax at source has been collected from the income. If the payment made to the company is compensation for use (royalty), it must always be reported to the Incomes Register.

The Income Tax Act also includes provisions on resident tax liability that apply to certain special groups, such as persons working for Finland's foreign representative offices or international organisations.

For more information on the tax liability status, see the Tax Administration Guidelines Resident and non-resident tax liability.

1.5 Additional income earner and payer details in international situations

In international situations, income is reported using the same income types of the earnings payment report regardless of whether the income earner is a resident or non-resident taxpayer. If the income earner is a non-resident taxpayer, the following data must also be included in the income earner's details: Non-resident taxpayer: Yes.

If withholding has been carried out from income (such as wages) subject to tax at source received by a non-resident taxpayer instead of collecting tax at source, submit the entry Income subject to withholding: Yes. The payer may carry out withholding from income subject to tax at source only if the income earner presents a non-resident taxpayer's tax card that was calculated for the year in question, and is valid on the payment date.

With regard to the following special groups, additional income earner information or payer details must be provided:

• wages paid under the act governing the taxation of key employees;
• wages paid for frontier work (Nordic situations);
• wages or fees paid to an athlete;
• wages or non-wage compensation for work paid to an artist; and
• wages paid by an international a specialised agency wages paid by a diplomatic mission located in Finland.

The reporting method related to these special groups is described in more detail in Section 5, Special situations.

Report Person working abroad as an additional income earner information when an employee insured in Finland works abroad as an employee posted by a Finnish employer. The use of this additional information is described in more detail in Section 4.5.1. As the additional payer details, select Foreign group company as the payer type when a foreign group company is paying the wages of an employee who has been posted abroad but is insured in Finland. The information is provided by the Finnish company who posted the employee.

When a public sector organisation pays income to a non-resident taxpayer, the additional payer details must indicate that the payer is a public sector organisation. This data is required for international exchange of information.

A foreign employer must report Foreign employer as the payer type when the foreign company does not have a permanent establishment in Finland.

1.6 Currency conversion

The data is reported to the Incomes Register in euros. If the payment was made in some other currency, the payment must be converted into euros using the ECB's reference exchange rate valid on the payment date (Bank of Finland > Exchange rates). If the payment is reported in the Incomes Register before the payment date, for example in connection with a payroll run, the income amount reported is converted using the reference exchange rate valid on the reporting date in question.

1.7 Customer identifiers

Payer's customer ID

The payer must report the data to the Incomes Register primarily using a Finnish Business ID or personal identity code.

If the payer does not have a Finnish customer identifier, the data should be reported using a foreign identifier. This also requires the entry of further identifying and contact details, such as name and address. If the payer has both a Finnish and a foreign identifier, report both identifiers.

Income earner's customer ID

The income earner's data must be reported to the Incomes Register primarily with a Finnish personal identity code in the Population Information System. The payer must request the personal identity code from the income earner. For a person living abroad, the foreign Tax Identification Number or personal identity code must also be disclosed, if the payer has this information. If the income earner has both a Finnish and a foreign identifier, report both identifiers.

If the income earner does not have a Finnish personal identity code, the data is reported using the income earner’s foreign personal identity code. In addition, you also need to report at a minimum the income earner’s name, date of birth, sex and address. It is possible to report the address in both Finland and the country of residence to the Incomes Register.

For an income earner who is a non-resident taxpayer, the country of residence, the Tax Identification Number (TIN) of the country of residence or the foreign personal identity code, and the address details in the country of residence must also always be reported. International treaties oblige the Finnish Tax Administration to forward information on income earned by foreign nationals in Finland to foreign tax authorities. The payer must keep payroll accounts of its income earners. Read more in the Tax Administration guidelines Taxation of employees from other countries, Section 5, The employer's obligations and procedure

If an artificial identifier has been given to the income earner, the artificial identifier is reported using the identifier type Other identifier. If an income earner does not have a Finnish personal identity code in the Population Information System, and the Tax Administration has provided the income earner with an artificial identifier, for example, to report the details of an income earner subject to the Assessment Procedure Act for taxation, the payer must report the artificial identifier provided by the Tax Administration in addition to the foreign identifier to ensure that the report is allocated to the correct person. Every time data is submitted with a non-Finnish personal identity code, the following data must be submitted: name, date of birth, sex, and address. The foreign identifier is also reported, if the payer knows it.

2 Reporting income paid for work abroad

2.1 Social insurance contributions and provision of insurance

Under certain conditions, an income earner working abroad can be covered by Finnish social security. In such a case, social insurance contributions must be paid to Finland based on the income earner's income. The payer must therefore also report the necessary information to the Incomes Register.

An employee leaving from Finland and working abroad is insured in Finland if

• Finnish legislation is applied to the employee based on the EU social security regulations and the employee has an A1 certificate from Finland; or
• Finnish legislation is applied to the employee based on a social security agreement and the employee has a certificate of the applicable legislation.

For further information on the social insurance contributions in different situations, see the insurers' own websites:

• earnings-related pension insurance: the payer's earnings-related pension provider or the Finnish Centre for Pensions (www.etk.fi)
• unemployment insurance: Employment Fund (www.tyollisyysrahasto.fi)
• accident and occupational disease insurance and employee's group life insurance: the payer's accident insurance company or the Workers' Compensation Center (www.tvk.fi)
• employer's health insurance contribution and employee's health insurance contribution: Tax Administration (www.vero.fi) and Kela (www.kela.fi).

If there is no social security agreement between Finland and the country of work, whether or not the income earner is covered by Finnish social security is determined by national legislation. It may be possible in such cases that the employee is insured both in Finland and the country of work. Finnish insurance coverage is separately determined for earnings-related pension, unemployment and occupational accident insurance, and the social security handled by Kela.

When a person is posted abroad, wages for insurance purposes must be determined for him/her. The employer's and the employee's social security contributions are determined based on this. Wages for insurance purposes are calculated wages that would have to be paid, if work corresponding to work performed abroad were to be performed in Finland. Different actors have different rules on when wages for insurance purposes are used to determine the social insurance contributions, and when actual wages paid are used instead. Read more in the Finnish Centre for Pensions guidelines (in Finnish) Wages for insurance purposes as earnings from work on which pension is based.

As a rule, all of the person's earnings on which their pension and other insurance contributions are based are included in the wages for insurance purposes. The earnings are calculated based on what they would be if the person were to work in Finland. For example, the person's bonuses are taken into account as averages, as part of the fixed wages for insurance purposes. The wages for insurance purposes are thus determined right from the start to include the bonuses accrued during the posting abroad in the amounts the parties estimate. Whether the bonuses come to fruition or not does not matter. Earnings-related pension insurance contributions are not paid separately for bonuses that come to fruition during the time of posting, because they have already been taken into account in the amount of the wages for insurance purposes.

Wages for insurance purposes do not need to be determined in all situations, for example if the posting abroad is shorter than six months in duration. In such situations, the social insurance contributions are paid based on the actual wages.

The six-month rule for taxation is different than the six-month inspection period used in determining the wages for insurance purposes. The actual work period abroad is considered in determining the wages for insurance purposes. If the work period exceeds six months, wages for insurance purposes must be determined.

2.2 The income on which insurance contributions and the income on which taxation is based are different

In some situations related to working abroad, the income on which some social insurance contributions are based is different than the income on which taxation is based. In these situations, wages for insurance purposes must be reported to some Incomes Register data users and the actual wages paid to some.

In situations where wages for insurance purposes have been determined but the actual wages paid are used as the basis for taxation, the Tax Administration and Kela will use the actual wages paid as the basis for taxes and contributions.

In these situations, the employer's and the employee's health insurance contributions are determined by the actual wages paid when the income is taxed progressively (income received by both resident and non-resident taxpayers). In such a case, include the following data in connection with the wages for insurance purposes: Insurance information type: Subject to health insurance contribution, Grounds for insurance contribution: No. Based on this information, the Tax Administration and some payers of benefits are informed of the wages for insurance purposes not being the grounds for the health insurance contributions and some benefits.

However, the pension and unemployment insurance contributions are paid based on the wages for insurance purposes. The accident and occupational disease insurance contributions are determined based on the wages for insurance purposes, but compensations for loss of earnings paid based on the insurances are determined based on the actual wages paid.

Situations where the income on which social insurance contributions are based may be different than the income on which taxation is based include:

• a resident taxpayer works abroad;
  • wages for insurance purposes are determined, but the six-month rule does not apply to the wage income (Section 2.3.1.2);
  • wages for insurance purposes are determined and the wages are paid by a foreign group company, but the six-month rule does not apply to the wage income (Section 2.3.2.2);
• a non-resident taxpayer works abroad;
  • the income earner is insured in Finland, but
    • the income is not taxed in Finland (Section 2.6.1.1);
    • the income is taxed in Finland, the income is taxed according to the Tax at Source Act (Section 2.6.1.2);
    • income is taxed in Finland, income is taxed according to the act on assessment procedure (so-called progressive taxation of a non-resident taxpayer) (Section 2.6.1.3).
• a resident or non-resident taxpayer is voluntarily insured in Finland.

In these situations, the data can be reported to the Incomes Register in one report when the payer uses reporting method 1 for reporting monetary wages. If the payer uses reporting method 2, the data must be reported to the Incomes Register in two reports. There are examples of data submitted using the different reporting methods in the above-mentioned sections.

Reporting method 1

When the payer reports the data to the Incomes Register using reporting method 1, the following income types must be reported:

• Wages for insurance purposes
• Total wages.

In addition to these income types, the payer must report the following data related to the Wages for insurance purposes income type: Six-month rule is applicable: No and Insurance information type: Subject to health insurance contribution, Grounds for insurance contribution: No. Furthermore, the Insurance information type data group connected to the Total wages income type must be used to report the social insurance contributions not paid based on the Total wages income type, but paid on basis of the wages for insurance purposes instead, for example:

• Insurance information type: Subject to earnings-related pension insurance contribution, Grounds for insurance contribution: No
• Insurance information type: Subject to accident and occupational disease insurance contribution, Grounds for insurance contribution: No
• Insurance information type: Subject to unemployment insurance contribution, Grounds for insurance contribution: No

If the Insurance information type data group is not used to report that the contributions in question are not paid for the Total wages income type, the social insurance contributions are determined twice, based on both the wages for insurance purposes and the total wages.

Reporting method 2

As a rule, income types reported using reporting method 2 include the data on to which social insurance contributions they are subject by default. By default, the Time-rate pay income type is subject to all social insurance contributions. Insurance information type is income-type-specific, but it cannot be connected to the Time-rate pay income type.

In order for the social insurance contributions to not be levied twice, based on both the wages for insurance purposes and the time-rate pay, the payer must submit two reports to the Incomes Register:

• The wages for insurance purposes are reported in its own report. For the Wages for insurance purposes income type, the following data must be submitted: Six-month rule is applicable: No and Insurance information type: Subject to health insurance contribution, Grounds for insurance contribution: No.
• The Time-rate pay income type is reported in its own report. In addition to the Time-rate pay income type, the following data must be reported:
  • Type of exception to insurance: No obligation to provide insurance (earnings-related pension insurance)
  • Type of exception to insurance: No obligation to provide insurance (unemployment insurance)
  • Type of exception to insurance: No obligation to provide insurance (accident and occupational disease insurance).

Type of exception to insurance data applies to the entire earnings payment report, and the data cannot be connected to an individual income type. Were the data on the wages for insurance purposes and time-rate pay as well as the type of exception to insurance data submitted in the same report, the social insurers would not receive information on the grounds for the insurance contributions.

2.3 A Resident taxpayer works abroad

The so-called six-month tax exemption rule may apply to the wages of an employee working abroad (section 77 of the income tax act (tuloverolaki 1535/1992)). In such a case, the wages paid are tax-exempt in Finland, and only social insurance contributions are paid from the income if the income earner is covered by Finnish social security. For more information on the taxation of work abroad, see the Tax Administration Guidelines Taxation of work abroad.

If the six-month rule applies to the wage income and the income earner is insured in Finland, the employer will perform a so-called minimum withholding (employee's health insurance contributions) based on the wages for insurance purposes automatically, and there is no need to change the tax card. The amount of the minimum withholding is confirmed annually by a decision of the Tax Administration. Additionally, the employer collects the employee's share of the earnings-related pension and unemployment insurance contributions from the wages. The payer reports Person working abroad as an additional income earner detail to the Incomes Register. This data is used always when an employee insured in Finland works abroad as an employee posted by a Finnish employer.

If a Finnish company posts an employee abroad and a foreign group company pays the employee's wages and the employee is insured in Finland, the Finnish company pays the employer's social insurance contributions (including the employer's health insurance contribution) and reports them to the Incomes Register. The employee's health insurance contribution is levied from the employee as back tax. In these situations, the Finnish company that posted the employee reports its own details in the payer details and submits Foreign group company as other payer details, and Person working abroad as additional income earner information.

The wages for insurance purposes must be reported to the Incomes Register monthly, no later than on the fifth day of the calendar month following the work.

When the employer applies the six-month rule of the Income Tax Act to the wage income, the following data must be reported to the Incomes Register in addition to the income type: Six-month rule is applicable: Yes and the country code of the country of work. The Six-month rule is applicable entry can be connected to an individual income type.

When the employer applies the six-month rule of the Income Tax Act to the wage income, the following data must be reported to the Incomes Register in addition to the income type: Six-month rule is applicable: Yes and the country code of the country of work. In situations where wages for insurance purposes have been determined for an employee, but the six-month rule is not applicable, the following data must be submitted: Six-month rule is applicable: No. For more details on these situations, see Section 2.3.1.2.1 (Finnish employer pays the wages) and Section 2.3.2.2 (a foreign group company pays the wages) of these instructions. If no wages for insurance purposes have been determined for the duration of the work period abroad and the six-month rule is not applicable to the wage income, the Six-month rule is applicable data does not need to be submitted.

When an employer does not withhold taxes because the six-month rules applies to the income, the employer must submit complementary information required by the Tax Administration to the Incomes Register; see Section 2.4, Additional information on work abroad.

When an employer posts an employee to another Nordic country, the employer must submit complementary information required by the Tax Administration to the Incomes Register; see Section 2.4, Additional information on work in a Nordic country.

See below for descriptions of different situations based on whether the income is taxable in Finland or not and whether insurance contributions are paid from the income to Finland or not. A Finnish payer's obligations in situations where the payment of wages is transferred to a foreign group company are described in Sections 2.3.2 (income earner is a resident taxpayer) and 2.6.4 (income earner is a non-resident taxpayer).

2.3.1 Wages for insurance purposes are determined

2.3.1.1 The six-month rule applies to the entire pay period

2.3.1.2 Six-month rule is not applicable

When the six-month rule is not applicable to the income earner's foreign wages but wages for insurance purposes have been determined for him/her, the employer may report the data in one earnings payment report when it uses reporting method 1 for reporting monetary wages. If the employer uses the reporting method 2, the employer must submit two reports to the Incomes Register. See Example 2.

If the six-month rule does not apply and other income or benefits are paid to the income earner in addition to monetary wages, the data must be reported using reporting method 2, see Example 3.

For more information on the procedure, see Section 2.2, The income on which insurance contributions and the income on which taxation is based are different.

When wages for insurance purposes have been determined for the employee but the six-month rule is not applicable to the income, the payer must report the following data in addition to the income type: Six-month rule is applicable: No.

2.3.1.2.1 Income is entirely taxed in Finland

Fringe benefits are given in addition to monetary wages

If the six-month rule does not apply and other income or benefits are paid to the income earner in addition to monetary wages, such as fringe benefits, the data must be reported using reporting method 2 and two earnings payment reports must be submitted.

2.3.1.1.2 The country of work taxes the income

If a permanent establishment in the country of work is established for the payer in the country of work as regards income taxation, the payer must usually collect taxes from the income earner's wages for the country of work, too. If the six-month rule is not applicable, the payer must withhold tax in Finland. However, the income earner may apply for a change to his/her tax card, in which case the taxes paid abroad can be taken into consideration in the withholding rate.

The payer can report the taxes collected from the income earner's wages and paid to the country of work using the separately reported income type, Tax paid abroad. This data is voluntarily submitted complementary additional data. In other regards, the data is reported in the same way as in the examples in the previous section.

Although the payer reports the tax paid abroad to the Incomes Register, the income earner must request the elimination of any double taxation in his/her taxation; he/she must also report the tax paid abroad in the tax return.

2.3.1.3 The six-month rule is applicable in the middle of a pay period

If the wages for insurance purposes begin to be applied in the middle of a month, the wages for insurance purposes are divided by 30.33 when the pay period is one month. The resulting number is divided by the number of days during which the wages for insurance purposes apply.

If the collective agreement for the sector states that the monthly wages must be divided by the number of workdays, the wages must be divided by the number of workdays in the month in question. The resulting figure is divided by the number of workdays during which the wages for insurance purposes apply.

Insurance information changes in the middle of a pay period, the six-month rule is applicable to a part of the wages for the pay period

The insurance information applies to the entire report. If the information changes in the middle of a pay period, the payer must submit two different earnings payment reports to the Incomes Register.

2.3.2 Wages for insurance purposes are determined, wages are paid by a foreign group company

If an employee posted abroad is insured in Finland, the employee's and the employer's social insurance contributions and other social insurance payments must be accrued in Finland even if the wages are paid by a foreign group company or another company where the Finnish company that posted the employee has authority. In these situations, the Finnish company that posted the employee pays the employer's health insurance contribution and other social insurance contributions (including the employee's shares of the pension and unemployment insurance contributions). The Finnish company is also obligated to report to the Incomes Register the information on the wages for insurance purposes, or the actual wages paid if the six-month rule is not applicable to the wage income.

In the reports submitted to the Incomes Register, the Finnish company reports its own details in the payer details, although the payer is in fact a foreign company. When a foreign group company pays the wages to an employee posted abroad who is insured in Finland, the Finnish company that posted the employee must submit the Foreign group company data as other payer details and the Person working abroad as an additional income earner detail.

The Foreign group company entry is made also when part of the wages are paid from Finland and part from abroad. In these situations, the Finnish employer reports the total amount of the wages paid from Finland and abroad, and the amount of the tax withheld, if the six-month rule does not apply to the wage income. See the examples in Sections 2.3.2.1.2 and 2.3.2.2.2.

The wages for insurance purposes must be reported to the Incomes Register monthly, no later than on the fifth day of the calendar month following the work.

2.3.2.1 Six-month rule is applicable

When the six-month rule is applicable to the wage income and the wages for insurance purposes have been determined, the employer's health insurance contribution and other social insurance contributions are paid based on the wages for insurance purposes.

2.3.2.1.1 All wages are paid from abroad

When a foreign company pays all the wages of the employee, the withholding (so-called minimum withholding) of the employee's health insurance contribution does not accrue, because the wages are paid by a foreign company. Based on the data submitted to the Incomes Register, the Tax Administration determines the amount of the employee's health insurance contribution in final taxation, and it is paid as back tax.

2.3.2.1.2 Part of the wages are paid from abroad and part from Finland

When part of the wages are paid from Finland and part from abroad and the six-month rule applies to the wages received by the employee, the social insurance contributions are then paid based on the wages for insurance purposes. The Finnish company that posted the employee reports the amount of the wages for insurance purposes determined for the employee, the employee contributions it has collected and the minimum withholding carried out as withholding on an earnings payment report.

2.3.2.2 Six-month rule is not applicable

If the employee posted abroad is insured in Finland, but the six-month rule is not applicable to the income, the employer's and the employee's health insurance contributions are paid based on the actual wages paid. The employer's and the employee's earnings-related pension and unemployment insurance contributions, and the employer's accident and occupational disease insurance contributions are paid based on the wages for insurance purposes.

The actual wages paid are the basis of the employer's and the employee's health insurance contributions up to the amount in which the wages would be subject to withholding if the work had been performed in Finland. In other words, the payment obligation is not linked to the wages for insurance purposes. The Finnish company that posted the employee must request the necessary information on the wages paid from the foreign payer. The fringe benefit decision of the Tax Administration also confirms the value of foreign fringe benefits.

Because the six-month rule is not applicable to the income, the income is taxed in Finland. If a right to tax the wages is established for the country of work, the employee must request the elimination of double taxation in a tax return submitted to Finland.

If the Finnish and foreign company belong to the same group, the Finnish employer is obligated to report to the Incomes Register the wages paid by the foreign employer. At the same time, the employer may also report any taxes collected for the foreign country by the foreign employer using the income type Tax paid abroad. The information must be reported monthly, no later than on the fifth day of the calendar month following the payment of wages.

When the six-month rule does not apply to the employee's wages, the employer must report both the actual wages paid and the wages for insurance purposes to the Incomes Register. The data can be submitted to the Incomes Register in one earnings payment report when reporting method 1 is used. When reporting method 2 is used, two reports must be submitted. For more information on the procedure, see Section 2.2, The income on which insurance contributions and the income on which taxation is based are different.

2.3.2.2.1 All wages are paid from abroad

2.3.2.2.2 Part of the wages are paid from abroad and part from Finland

If part of the wages are paid from Finland and part from abroad, and the six-month rule does not apply to the employee's wages, the employer must report both the actual wages paid and the wages for insurance purposes to the Incomes Register.

If a person who has an A1 certificate on eligibility for Finnish social security works regularly in two different EU Member States, the wages for insurance purposes are generally not determined. In such situations, the social insurance contributions are determined based on the actual wages paid.

2.3.3 Income earner is not insured in Finland

2.3.3.1 Six-month rule is applicable

If a resident taxpayer working abroad is not insured in Finland and the six-month rule is applicable to the wages paid to him/her, the Finnish employer must report the income to the Incomes Register.

2.3.3.2 Six-month rule is not applicable

If the six-month rule is not applicable to the wages of a resident taxpayer working abroad, the income is taxable in Finland. The Finnish employer must withhold tax from the income to Finland in accordance with the stipulations of the tax card and report the data on the wages paid to the Incomes Register.

The payer must also use the Type of exception to insurance data to report that the social insurance contributions are not paid to Finland, for example: Not subject to Finnish social security (earnings-related pension, health, unemployment or accident and occupational disease insurance) As complementary data, the following can be reported: Social security agreement: To Finland A1 certificate or agreement.

2.3.4 Wage income subject to seafarers' pensions act and work abroad

The seafarers' pensions act (merimieseläkelaki 1290/2006) does not include the concept of wages for insurance purposes. If a wage earner is subject to the seafarers' pensions act the payer reports the income according to the actual wages paid. The social insurance contributions are determined based on the wages paid.

The six-month rule of the income tax act (tuloverolaki 1535/1992) is not applicable to income from work on board a Finnish ship. A foreign ship leased by a Finnish company is also considered equivalent to a Finnish ship if the ship has only a minor foreign crew or no crew.

Work performed on board a foreign ship, however, may be tax-exempt under the six-month rule.

Read more about reporting seafarer’s income in Section 2, Seafarer's income, in Reporting data to the Incomes Register: rewarding employees, payments made to an entrepreneur and other special circumstances.

2.3.5 Wages paid to an entrepreneur and the six-month rule

If an income earner who goes abroad to work is YEL-insured (pension insurance for the self-employed) and the six-month rule applies to the wages paid, the social insurance contributions are paid based on the YEL income from work.

The YEL income from work confirmed by the pension provider is the income on which earnings-related pension insurance and health insurance contributions are based, and replaces the wages received by the self-employed person as the basis for the earnings-related pension and health insurance contributions. The confirmed income does not need to be reported to the Incomes Register but the wages paid to the entrepreneur must be for use by the Tax Administration. The employer’s health insurance contribution is paid based on the actual wages paid.

The income is reported to the Incomes Register as follows:

Wages paid to a self-employed person, six-month rule is applicable.

INCOME EARNER DETAILS
Earnings-related pension insurance information: Pension insurance for the self-employed (YEL)
Type of exception to insurance: No obligation to provide insurance (earnings-related pension, health, unemployment or accident and occupational disease insurance)
Reporting method 1	EUR	Reporting method 2	EUR
101 Total wages	2500.00	201 Time-rate pay	2500.00
Six-month rule is applicable: Yes Country code of the country of work: ZZ		Six-month rule is applicable: Yes Country code of the country of work: ZZ

2.3.6 Incentives and the six-month rule

Income from an employee stock option may under certain conditions be tax-exempt under the six-month rule. If the conditions are met, the employer may apply the six-month rule when reporting the payment to the Incomes Register. For example, the employer must arrange reliable tracking of working days and check that the conditions of the income being tax-exempt are fulfilled before reporting the employee stock option to the Incomes Register.

Read more about the requirements in the Tax Administration's guidelines (in Finnish) Taxation of employee stock options and share issues for employees in international situations.

2.3.7 Tax-exempt expenses related to work abroad

Reimbursements of expenses related to work abroad are reported to the Incomes Register using income type Daily allowance (331).

Tax-exempt reimbursements of expenses related to work abroad mean tax-exempt reimbursements connected to work abroad as referred to in section 76(1)(5) of the act on income tax (tuloverolaki 1535/1992). The Type of daily allowance entry in question is used to report all tax-exempt expenses related to work abroad, such as flight expenses, road tolls and other expenses. This being the case, expenses based on a document provided by a transport operator are also reported using the Type of daily allowance entry in question if the expense items were related to work abroad pursuant to section 78 of the act on income tax.

2.4 Additional information on work abroad (six-month rule)

2.4.1 Information to be reported

The additional information on work abroad is reported to the Incomes Register for the purposes of the Tax Administration. In this section, additional information on work abroad refers to NT2 data and the employer's report on periods of stay in Finland. The data can be submitted either in connection with earnings payment data or separately. The recommendation is, however, that the additional information on work abroad is submitted in a separate earnings payment report.

The data must be reported when the employer has applied the six-month rule as defined in section 77 of the income tax act (tuloverolaki 1535/1992) to the wage income.

The wages earned from the work abroad are tax-exempt in Finland if the six-month rule as defined in section 77 of the income tax act is applicable to them. For more information on the taxation of work abroad, see the Tax Administration Guidelines Taxation of work abroad.

The additional information on the work abroad (NT2 and the periods of stay in Finland) do not need to be reported to the Incomes Register if the wages are paid by the foreign employer. The additional information on the work abroad must only be submitted if the Finnish employer did not carry out withholding. If the wages are paid by a foreign group company, the additional information on the work abroad is not submitted, because the Finnish company did not fail to carry out withholding.

2.4.1.1 Withholding is not done to Finland (NT2 data)

The employer may choose not to withhold tax from the wages it has paid for work abroad if the conditions of the six-month rule are fulfilled. When the employer does not withhold tax from the income earner's wages and starts applying the six-month rule, the employer must submit the information on the work abroad as NT2 data.

The following data is then reported as NT2 data:

• Country of work or countries of work, if several (mandatory data)
• District of work (voluntary data)
• Address in country of work (voluntary data)
• Stay periods in country of work (mandatory data)
  • start date
  • end date (estimated)
• Work periods abroad (mandatory data)
  • start date
  • end date (estimated)
• Pay burdens the result of a permanent establishment in the country of work (Y/N) (mandatory data)
• Country of work has right to tax the wages (Y/N) (mandatory data)
• Pay per month (voluntary data)
• Other remunerations and benefits (voluntary data)

2.4.1.2 Employer's report of periods of stay in Finland

The following data is submitted in the report:

• Stay periods in Finland (mandatory data)
  • start date
  • end date
• If the employee has not stayed in Finland at all during the time period for reporting, the payer must choose the following entry for Stay periods in Finland:
  • Report contains no stay periods in Finland (Y/N)

2.4.2 The time of reporting data and correcting data

Before the first payment of wages for work abroad, the employer must evaluate whether tax needs to be withheld from the payment to Finland. The employer must report the NT2 data no later than on the fifth calendar day after the first wage payment date after tax was not withheld for the first time.

The NT2 data must be submitted for each calendar year. If working abroad continues into the next year, the previously submitted NT2 data does not need to be corrected; instead, the changed data is reported on a new earnings payment report. In this case, the NT2 data must be submitted by the end of January of the following year.

The NT2 data provided for the last year of work must be corrected by the end of January of the following year if there have been changes in it. For example, if the actual end date of the stay or employment abroad differs from the estimated end date, the last end date data on the NT2 form must be corrected.

If the country of work changes, however, new NT2 data must be submitted if tax is still not withheld. The data must be reported no later than on the fifth calendar day following the first payment date on which tax was not withheld for wages paid for work performed in this country.

Even if tax is initially withheld to Finland, it may be later confirmed that the six-month rule applies to the wage income. Once the applicability of the six-month rule has been confirmed, the employer may choose not to withhold tax to Finland by its own decision. Additionally, the employer must then submit the NT2 data to the Incomes Register. If the employer applies the six-month rule retroactively, NT2 information does not need to be submitted for the past months. NT2 information is submitted as of the date on which the employer does not carry out withholding.

The employer's report on periods of stay in Finland must be submitted when the six-month rule is applied retroactively.

Read more about correcting information concerning wages and withholding in Section 2.7.1

If tax is not initially withheld and it is later confirmed that the six-month rule does not apply to the wage income, the changes to the work and stay periods reported as NT2 data must be corrected by submitting a replacement earnings payment report.

In the employer’s report on periods of stay in Finland, the employer must report the stay periods in Finland during the work period abroad. This data must be reported to the Incomes Register no later than by the end of January of the following year. The stay periods are not usually known at the time of the payment of wages; the employee may also report them to the employer afterwards. The data may nevertheless be submitted immediately after the work abroad has ended.

Stay periods in Finland must be reported regardless of the reason for the stay in Finland, even if the stay in Finland was due to a compelling, unexpected reason in accordance with section 77 of the Income Tax Act.

Any errors in the periods of stay in Finland reported to the Incomes Register must be corrected by submitting a replacement earnings payment report.

2.5 Additional information on work in a Nordic country

The Nordic Agreement Concerning the Collection and Transfer of Tax (97/1997), or the so-called TREKK Treaty, regulates information exchange and the transfer of taxes between the Nordic countries. For this purpose, the employer must submit the following information on work in another Nordic country to the Tax Administration:

• NT1 data when tax is still withheld to Finland;
• NT2 data when tax is not withheld to Finland.

Once the Tax Administration has received the NT data, it sends the data to the tax authority of the country of work. The Tax Administration also provides the payer and the income earner with a notification of the submitted NT data.

The NT data are required to indicate to the tax authorities of the country of residence and the country of work to which country the income earner should make prepayments. Where tax has initially been withheld in Finland and the NT1 data has been submitted, the data does not need to be retroactively changed to NT2 data if it is later established that the country of work has the right to tax the wages and tax should not be withheld in Finland (read more in Section 2.5.2).

For more information on reporting work in Nordic countries, see the Tax Administration Guidelines Taxation of work abroad.

2.5.1 Information to be reported

The additional information on work in a Nordic country is reported to the Incomes Register for the purposes of the Tax Administration. In this section, additional information on work abroad refers to NT1 and NT2 data and the employer's report on periods of stay in Finland. The data can be submitted either in connection with earnings payment data or separately. The recommendation is, however, that the additional information on work abroad is submitted in a separate earnings payment report.

When an employee works in another Nordic country, either the NT1 or NT2 form data must always be reported to the Incomes Register. Furthermore, when tax has not been withheld due to the applicability of the six-month rule, the stay periods in Finland must be reported in addition to the NT2 form data in the same way as described above in Section 2.4.

2.5.1.1 Tax is withheld to Finland (NT1 data)

When an employee works in another Nordic country, tax must be withheld to Finland if:

• the employee's stay in the country of work does not exceed 183 days within a period of 12 months;
• the wages are paid by the Finnish employer;
• the wages do not burden the financial result of a permanent establishment in the country of work; and
• this does not constitute employee leasing.

When tax is withheld to Finland, the employer must submit the NT1 data for the employee working in another Nordic country to the Incomes Register. The following data is reported as NT1 data:

• Country of work (mandatory data)
• District of work (voluntary data)
• Address in country of work (voluntary data)
• Stay periods in country of work (mandatory data)
  • start date
  • end date (estimated)
• Principal in the country of work (mandatory data)
  • identifier, name
  • address
• Pay burdens the result of a permanent establishment in the country of work (Y/N) (mandatory data)
• Country of work has right to tax the wages (Y/N) (mandatory data)

2.5.1.1.1 Reporting stay periods in the NT1 data

The stay periods reported in the NT1 data are used to check whether the country of residence still has the right to tax the income or if the country of work receives the right to tax based on residency. According to the TREKK Treaty, wages paid from the country of residence may be taxed in the country of work, if the employee stays in the country of work for more than 183 days over a period of 12 consecutive months.

If an employee works in another Nordic country sporadically so that the period between the start date and the end date of the work period is no more than 183 days, the stay period can be reported as a one continuous period, even if it included periods of stay in Finland.

If the period between the start date and the end date of the stay exceeds 183 days, but the actual stay in another Nordic country remains below 183 days over a period of 12 consecutive months, the actual stay periods must be reported in the NT1 data. If the stay period exceeds 183 days, the country of work considers that it has received the right to tax the wages and can therefore demand that the taxpayer make prepayments to the country of work.

It is recommended that you initially estimate the periods of stay in the country of work for the entire work period and then make any subsequent changes to the stay periods by submitting a replacement earnings payment report. In this way, the NT data in the most recent earnings payment report keep the authorities of both the country of residence and the country of work informed of the stay periods for the entire work period. If you expect changes to the NT data, you should report them in a separate earnings payment report and use the replacement report only for correcting NT data.

2.5.1.2 Withholding is not done in Finland (NT2 data)

When an employee is working in another Nordic country and tax is not withheld in Finland, information on not withholding must always be submitted as NT2 data. Tax does not need to be withheld for two reasons:

• under section 77 of the income tax act (tuloverolaki 1535/1992) concerning income for work abroad
• due to the Nordic Tax Treaty, when the six-month rule is not applicable, but the relief method is applied to the elimination of double taxation of the income.

The wages earned from the work in another Nordic country are tax-exempt in Finland if the six-month rule as defined in section 77 of the income tax act is applicable to them. Even if the six-month rule is not applicable, the country of work may establish a taxation right under the Nordic Tax Treaty. The taxation right may be established, for example, by the employer having a permanent establishment in the country of work. The possible double taxation will then be eliminated in the country of residence, i.e. Finland. If, however, the six-month rule is not applicable to the wage income, the employer may choose not to withhold tax only if the employee has applied for a change to his/her tax card.

In Nordic situations, the following data is reported as NT2 data:

• Country of work or countries of work, if several (mandatory data)
• District of work (voluntary data)
• Address in country of work (voluntary data)
• Stay periods in country of work (mandatory data)
  • start date
  • end date (estimated)
• Work periods abroad (mandatory data)
  • start date
  • end date (estimated)
• Pay burdens the result of a permanent establishment in the country of work (Y/N) (mandatory data)
• Country of work has right to tax the wages (Y/N) (mandatory data)
• Pay per month (voluntary data)
• Other remunerations and benefits (voluntary data)

2.5.1.3 Employer's report of periods of stay in Finland

When an employee works in another Nordic country and the six-month rule applies to the income, the employer must submit the "Employer's report of periods of stay in Finland". The following data is submitted in the report:

• Stay periods in Finland (mandatory data)
  • start date
  • end date
• If the employee has not stayed in Finland at all during the time period for reporting, the payer must choose the following entry for Stay periods in Finland:
• Report contains no stay periods in Finland (Y/N)

2.5.2 The time of reporting data

Before the first payment of wages for work abroad, the employer must evaluate whether tax needs to be withheld from the payment to Finland. The NT data must be submitted no later than on the fifth date after the first payment date of wages for work in another Nordic country after the employee has started working in another Nordic country.

The NT2 data must be submitted for each calendar year. If working abroad continues into the next year, the previously submitted NT2 data does not need to be corrected; instead, the changed data is reported on a new earnings payment report. In this case, the NT2 data must be submitted by the end of January of the following year.

The NT2 data provided for the last year of work must be corrected by the end of January of the following year if there have been changes in it. For example, if the actual end date of the stay or employment abroad differs from the estimated end date, the last end date data on the NT2 form must be corrected. See the example in Section 2.4.2.

If the country of work changes, however, new NT2 data must be submitted if tax is still not withheld. The data must be reported no later than on the fifth calendar day following the first payment date on which tax was not withheld for wages paid for work performed in this country.

Unlike NT2 data, NT1 data is not submitted by calendar year. NT1 data is only submitted at the start of employment in another Nordic country.

In the employer’s report on periods of stay in Finland, the employer must report the stay periods in Finland during the work period abroad. This data must be reported to the Incomes Register for each calendar year no later than by the end of January of the following year. The stay periods are not usually known at the time of the payment of wages; the employee may also report them to the employer afterwards. The data may nevertheless be submitted immediately after the work abroad has ended.

Stay periods in Finland must be reported regardless of the reason for the stay in Finland, even if the stay in Finland was due to a compelling, unexpected reason in accordance with section 77 of the Income Tax Act.

Any errors in the periods of stay in Finland reported to the Incomes Register must be corrected by submitting a replacement earnings payment report.

2.5.3 The tax withholding obligation changes during a work period in another Nordic country

Even if tax is initially withheld to Finland, it may be later confirmed that the six-month rule applies to the wage income. The employer has then initially submitted the NT1 data for the working in another Nordic country. Once the applicability of the six-month rule has been confirmed, the employer may choose not to withhold tax to Finland by its own decision. Additionally, the employer must then submit the NT2 data to the Incomes Register in a new earnings payment report after the first wage payment date after tax was not withheld for the first time. In accordance with the TREKK Treaty, the employer cannot then return the already withheld taxes to the employee; instead, the authorities of the two countries will handle the transfer of the withheld tax to the other Nordic country. The transfer is carried out on the basis of the data submitted by the employee in their tax return.

The procedure is the same in Nordic situations where the six-month rule is not applicable and it is only discovered during the work period that a taxation right to the wages will be established for the country of work under a tax treaty. Even then, information on tax withholding has initially been submitted as NT1 data. Once it has been discovered that the country of work has the right to tax the wages, tax is no longer withheld to Finland. This is based on a tax card issued to the employee, taking into consideration the elimination of double taxation in Finland. The employer must then also submit information on the tax not being withheld as NT2data in a new earnings payment report after the first wage payment date after tax was not withheld for the first time.

2.5.4 Correction of information

If the additional information on Nordic work has been reported incorrectly, the information must be corrected when the error is discovered. The primary method for correcting information is to submit a replacement earnings payment report. An earlier report may only be corrected by cancellation if incorrect data has been submitted in the initial report (e.g. if the employee details are incorrect or the work period in another Nordic country never began).

If the employer initially carried out the withholding in Finland and submitted the NT1 data to the Incomes Register but it is later established that the country of work has received the right to tax the wages and therefore tax should not be withheld in Finland, the previous NT1 data should not be corrected or cancelled. The NT2 data should be reported in a new earnings payment report after tax was not withheld in Finland for the first time.

If changes take place in the mandatory data (see Sections 2.5.1.1 and 2.5.1.2) during the assignment, the corrections can be made no later than by the end of the January of the year following the tax year. If the country of work changes, new NT1 or NT2 data must always be submitted, depending on whether tax is withheld to Finland or not.

See the examples on changes in stay periods during the work period and correcting this data in Section 2.5.1.1.

2.6 A non-resident taxpayer is working abroad

A Finnish citizen who has moved abroad will generally become a non-resident taxpayer from the beginning of the fourth calendar year following the year of the move. The private-sector wages paid to a non-resident taxpayer for work abroad are not taxable in Finland. If the wages are paid by a public sector payer, the wages can usually be taxed in Finland.

The income paid to a non-resident taxpayer and other information are reported to the Incomes Register in the same way as payments made to a resident taxpayer. Furthermore, the following data must be included in the income earner details: Non-resident taxpayer: Yes. The data is reported using a Finnish personal identity code when the income earner has a Finnish ID. Furthermore, the foreign Tax Identification Number, the country of residence and the contact information in the country of residence are always reported of an income earner who is a non-resident taxpayer. If an employee who is a non-resident taxpayer does not have a Finnish personal identity code, the payer must report, in addition to the foreign identifier, the employee's name, date of birth, address and gender.

When the wages paid to a non-resident taxpayer are taxable in Finland, tax at source or withholding tax can be collected from the wages. If tax is withheld from the wage income paid to a non-resident taxpayer instead of tax at source, the so-called progressive taxation of a non-resident taxpayer is followed. In that case, the following data must be included in the earnings payment report: Income subject to withholding: Yes. Tax can be withheld from the wages only if the employee has a tax card of a non-resident taxpayer that is valid at the time of payment.

If a non-resident taxpayer is insured in Finland, the employer's and the employee's health insurance contributions and other social insurance contributions must be paid from the wages regardless of whether the wages are taxed in Finland or not. If the wage income is subject to tax at source, the employee's health insurance contribution is collected and reported to the Incomes Register in addition to the tax at source. If the wage income is subject to withholding, the employee's health insurance contribution is included in the withheld amount.

When an employee insured in Finland works abroad posted by a Finnish employer, the additional income earner detail Person working abroad must be included. When a public sector payer is paying income to an income earner who is a non-resident taxpayer, the additional payer details must include information of the payer being a public sector payer.

2.6.1 Income earner is insured in Finland

The posting of a person working abroad may continue so long that he/she becomes a non-resident taxpayer in Finland. If he/she is still insured in Finland and wages for insurance purposes have been determined for him/her, the social insurance contributions are paid based on the wages for insurance purposes. Private-sector wages are not taxed in Finland, but the payer must collect the employee's health insurance contribution. If the payer is a public sector payer, the income can be taxed in Finland. The taxation is based on the actual wages paid. The wages paid for work on board a Finnish ship or aircraft can also be taxed in Finland.

If wages for insurance purposes have been determined for the income earner, data on both the wages for insurance purposes and the wages paid must be reported to the Incomes Register. Because the insurance contributions are based on the wages for insurance purposes and the actual wages paid must be reported for the purposes of the Tax Administration, the payer can submit the data in one earnings payment report when reporting method 1 is used. When reporting method 2 is used, two reports must be submitted to the Incomes Register. For more information on the procedure, see Section 2.2, The income on which insurance contributions and the income on which taxation is based are different.

2.6.1.1 Income is not taxed in Finland

2.6.1.2 Income is taxed in Finland, tax at source

The wages paid to a non-resident taxpayer for work abroad may be taxable income in Finland. The wages are taxable when, for example, the payer is a public sector payer. The wages paid for work on board a Finnish ship or aircraft can also be taxed in Finland. Tax at source or withholding must be collected from the wages.

If the income is subject to tax at source, the payer may make a tax-at-source deduction of the income only if the tax at source card includes the relevant entry. The employee's health insurance contribution must be reported separately.

The social insurance contributions are paid based on the wages for insurance purposes. The employee's health insurance contribution is also paid based on the wages for insurance purposes. However, tax at source must be collected based on the actual wages paid.

When a public sector organisation pays income to a non-resident taxpayer, the additional payer details must indicate that the payer is a public sector organisation.

2.6.1.3 Income is taxed in Finland, taxation according to the act on assessment procedure (so-called progressive taxation)

The payer may withhold tax from the wages paid to a non-resident taxpayer if the income earner presents a tax card of a non-resident taxpayer that is valid at the time of payment. The income earner details must then include an entry indicating that the income is subject to withholding. The employee's health insurance contribution is not reported separately; it is included in the withholding rate.

2.6.2 Income earner is not insured in Finland

If a non-resident taxpayer working abroad is not insured in Finland, the Finnish employer must report the actual wages paid to the Incomes Register.

If the employee's wage income is taxed in Finland, the tax at source or withholding collected from the income is reported in an earnings payment report.

2.6.3 Income earner is voluntarily insured in Finland

A voluntary TyEL insurance (employee's earnings-related pension insurance) can be taken out for an employee who works abroad and is not subject to the mandatory TyEL insurance. In this situation, it is a requirement that the other statutory prerequisites concerning the employee and the employer are met. The wages for insurance purposes are also used as the basis for the pension in the voluntary TyEL insurance.

A voluntary TyEL insurance is reported to the Incomes Register by submitting the following data: Type of exception to insurance: Voluntary insurance in Finland (earnings-related pension insurance). The payer also reports the exception to insurance information 'No obligation to provide insurance' for the health insurance, unemployment insurance, and accident and occupational disease insurance if the payer is not obligated to pay any other social insurance contributions than the earnings-related pension insurance contribution.

For more information on the voluntary TyEL insurance, see the pensions act service (in Finnish).

In corresponding situations, a Finnish employer can take out a voluntary insurance for accidents and occupational diseases for its employee working abroad. This is not reported to the Incomes Register; the employer handles the insurance coverage directly with an insurance company.

2.6.4 Foreign group company pays the wages

If a non-resident taxpayer working abroad is insured in Finland and works for a group company, the Finnish company that posted the employee must pay the employer's health insurance contribution and other social insurance contributions (including the employee's share of the earnings-related pension and unemployment insurance contributions) to Finland. The contributions are paid based on the wages for insurance purposes, and the data must be reported to the Incomes Register. The income is not taxable in Finland, and withholding or tax at source will not be collected in Finland if all wages are paid abroad.

When a foreign group company pays the wages to an employee posted abroad who is insured in Finland, the Finnish company that posted the employee must submit the Foreign group company data as other payer details and the Person working abroad as an additional income earner detail.

The Foreign group company entry is made also when part of the wages are paid from Finland and part from abroad. Only the wages for insurance purposes and the insurance contributions based on them are reported to the Incomes Register. When the employee is a non-resident taxpayer and the wages are mainly paid from abroad, the actual wages paid are not reported.

In situations involving a group company, it must be ensured that only the Finnish company who posted the employee reports the data to the Incomes Register, so that the foreign group company does not report the same data.

2.6.4.1 All wages are paid from abroad

2.6.4.2 Part of the wages are paid from abroad and part from Finland

2.7 Correcting information in situations involving work abroad

The information regarding the application of the six-month rule must be corrected in the Incomes Register in the following situations:

• the employer applies the six-month rule retroactively and returns withheld taxes to the employee based on the rule;
• the employer has applied the six-month rule but later finds out that the requirements of the rule are not met.

For example, if the employer has initially applied to six-month rule but later finds out that the requirements of the rule are not met, the employer must correct the relevant earnings payment reports and specify that the six-month rule has not been applicable to the wages. This can happen, for example, when the employee has spent too many days in Finland, or work lasts for less than six months and the country of work does not receive the right to tax the wages.

If, however, the employer has not applied the six-month rule in withholding taxes, and the employee later demands the application of the rule on their tax return and the Tax Administration approves the demand, the employer does not need to correct the earnings payment reports in the Incomes Register. In such a case, the employer has not applied the six-month rule when paying wages, and the employer does not necessarily know how the employee’s taxes were levied.

In situations involving working in a Nordic country, it must be taken into consideration, however, that the employer cannot return the tax withheld from the wages to the employee even if the six-month rule could be retroactively applied to the income. This is due to TREKK Treaty, according to which an authority transfers taxes groundlessly collected in one Nordic country to another Nordic country (the country of work). The procedure is described in Section 2.5, Additional information on work in a Nordic country.

Data reported to the Incomes Register can be corrected as long as they are retained in the Incomes Register, i.e., 10 years counting from the beginning of the year following the year the data was saved. Read more in the Correcting data in the Incomes Register instructions.

2.7.1 Applicability of the six-month rule is not confirmed until later

If a work assignment abroad was initially planned to last only a couple of months, but the assignment continues for over six months, the payer may have to correct the information it has reported to the Incomes Register.

2.7.2 The conditions for the applicability of the six-month rule are not fulfilled

If it was initially determined that the six-month rule is applicable to wages paid for work abroad, but during the work period it is found out that the requirements of the rule are not met, the employer must correct the earnings payment reports it has submitted to the Incomes Register, including the NT2 data.

2.7.3 Wages for insurance purposes are retroactively determined

If no wages for insurance purposes have been determined for the person, they must be determined retroactively. You must then correct the submitted report and report the wages for insurance purposes as new information. If you have to change the amount of the wages for insurance purposes, change the previously reported amount to the correct one.

Wages for insurance purposes must be determined retroactively for example when a posting abroad originally agreed to last just a couple of months is extended so that the working period exceeds six months. The amount of the wages for insurance purposes previously reported must be corrected for example when payments are made later that were not taken into consideration in the wages for insurance purposes, although they should have been. Such payments can include, for example, bonuses.

Every time the wages for insurance purposes are retroactively determined, the data must be corrected in the Incomes Register by submitting a replacement report. A more detailed description of how to correct data is provided in the instructions Correcting data in the Incomes Register.

3 Reporting the data of an income earner coming to Finland from abroad

Payments made to an income earner coming to Finland from abroad are reported to the Incomes Register using an earnings payment report. It does not matter whether the income earner is a resident or non-resident taxpayer. The data must be reported also in the case that the income is not taxed in Finland or the employee is not insured in Finland.

The data should primarily be reported using a Finnish Personal identity code. For more information on customer identifiers, see Section 1.7, Customer identifiers.

The Reporting obligations of foreign employers are described in Section 4.

3.1 Social insurance contributions and provision of insurance

An income earner coming to Finland from abroad is primarily covered by Finnish social security and the social insurance contributions are paid to Finland. The social insurance contributions are reported to the Incomes Register in the same way as for other income earners.

When the EU social security regulations are applied to an employee coming to Finland and the employee has an A1 certificate from his/her country of origin, he/she is insured in his/her country of origin with respect to all social insurances. Then the employer's or the employee's health insurance contributions or other social insurance contributions are not paid to Finland.

When the legislation of another country is applied to an employee based on a social security agreement and the employee has a certificate of the applicable social security, those insurance contributions covered by the social security agreement are not paid to Finland. Different social security agreements apply to different insurance contributions.

An employee from another country has health insurance in Finland immediately after entering Finland, if they are paid monthly wages for working in Finland equalling at least the amount of the basic unemployment allowance laid down in the unemployment security act (työttömyysturvalaki 1290/2002) converted into monthly earnings (EUR 726.27 in 2021). The payments received during the same calendar month are included in the monthly earnings, and the income limit is recipient-specific. If the monthly earnings remain below the aforementioned limit, the health insurance contribution is not paid even if the employee does not have a certificate of being covered by the social security of their country of origin. If the person has moved into Finland permanently, they may get health insurance in Finland even if their monthly earnings are below the limit.

However, the other social insurance contributions must usually be paid. There are certain exceptions to this; more information on these is available from the parties mentioned below.

For further information on the social insurance contributions in different situations, see the insurers' own websites:

• earnings-related pension insurance: the payer's earnings-related pension provider or the Finnish Centre for Pensions (www.etk.fi)
• unemployment insurance: Employment Fund (www.tyollisyysrahasto.fi)
• accident and occupational disease insurance and employee's group life insurance: the payer's accident insurance company or the Workers' Compensation Center (www.tvk.fi)
• employer's health insurance contribution and employee's health insurance contribution: Tax Administration (www.vero.fi) and Kela (www.kela.fi).

3.2 Resident taxpayer works in Finland

The income of a resident taxpayer coming to Finland from abroad is reported to the Incomes Register in the same way as the income of someone living in Finland. If the social security of the employee's country of origin is applied to the employee, the insurance contributions covered by the social security agreement are not collected from him/her.

3.3 Non-resident taxpayer works in Finland

The income paid to a non-resident taxpayer and other data are reported to the Incomes Register in the same way as income paid to a resident taxpayer. Furthermore, the following data must be included in the income earner details: Non-resident taxpayer: Yes.

The data is reported using a Finnish personal identity code when the income earner has a Finnish ID. Furthermore, the foreign Tax Identification Number, the country of residence and the contact information in the country of residence are always reported of an income earner who is a non-resident taxpayer. If an employee who is a non-resident taxpayer does not have a Finnish personal identity code, the payer must report, in addition to the foreign identifier, the employee's name, date of birth, address and gender.

If the wage income paid to the non-resident taxpayer is subjected to withholding instead of tax at source, the following data must be included: Income subject to withholding: Yes (so-called progressive taxation of a non-resident taxpayer). The payer can withhold tax from the wage income paid to a non-resident taxpayer only if the employee has a tax card of a non-resident taxpayer that is valid at the time of payment.

When reporting the data of a non-resident taxpayer to the Incomes Register, the data submitter may submit, for example, the Social security certificate data and the employee's periods of stay and work in Finland as complementary additional data.

See below for examples of the data to be submitted in an earnings payment report, when payments are made to an income earner who is a non-resident taxpayer.

3.3.1 Income earner is not insured in Finland

3.3.1.1 Income is subject to tax at source

3.3.1.2 Income is subject to withholding (progressive taxation)

3.3.2 Income earner is insured in Finland

3.3.2.1 Income is subject to tax at source

3.3.2.2 Income is subject to withholding (progressive taxation):

3.3.3 Income earner insured with respect to only some social insurances

Resident and non-resident tax liability are information affecting taxation. They have no effect on the obligation to provide insurance. The following situations related to insurance may apply to both resident and non-resident taxpayers.

3.3.3.1 Income earner is not health insured in Finland

If a person coming to Finland from abroad is not insured in Finland under the Health Insurance Act, the employer's or the employee's health insurance contributions do not need to be paid from the wages paid. However, the other insurance contributions must usually be paid. For more details on social insurance contributions, see Section 3.1, Social insurance contributions and provision of insurance.

3.3.3.2 Income earner is not earnings-related pension or unemployment insured in Finland

The social security agreements made by Finland may only apply to some of the social insurance contributions. If the applicable social security agreement does not cover some insurance contributions, they must be paid to Finland in accordance with Finnish legislation. For more detail on the social security agreements, see the pensions act service.

3.4 Au pairs and trainees

The pocket money paid to an au pair coming to Finland from abroad is taxable wage income. The au pair has a board and lodging benefit from living with the family. The employee's share of the earnings-related pension and unemployment insurance contributions are also wage income. Additionally, the employer must pay the employer's health insurance contribution and other social insurance contributions. Read more about the taxation of an au pair employee in the Tax Administration's guideline Au pairs from abroad arriving in Finland.

Each year, the Tax Administration will confirm the value of fringe benefits by a decision of the Tax Administration on the calculation methods of fringe benefits.

3.5 Taxable reimbursements of moving and travel expenses

Section 69 c of the act on income tax (tuloverolaki 1535/1992) coming into force in the beginning of 2020 provides that 50% of the moving and travel expenses of an employee and their family member paid by the employer is tax-exempt. The relief requires that the move takes place due to the location of the employee's place of work. The provision applies both to persons moving to Finland from abroad and persons moving within Finland. Expenses directly related to moving are deemed to be moving expenses. These include, for example, expenses incurred from packing, unpacking and transporting property. Further information on reimbursing moving and travel expenses is available on the Vero.fi website.

The part of the moving and travel expenses reimbursed by the employer that is taxable as earned income, or 50% of the expenses paid by the employer, are reported to the Incomes Register as earned income. These expenses are deemed to be the employee's and their family member's living expenses. The data is reported using income type Other compensation (216). In the aforementioned situations, the income is subject to social insurance contributions.

The tax-exempt part of moving and travel expense reimbursements is not reported to the Incomes Register and no social insurance contributions are paid from it.

3.6 Correction of information

3.6.1 A non-resident taxpayer becomes a resident taxpayer

If the income earner initially intended to stay in Finland for no more than six months, but the duration of his/her stay is longer, the income earner becomes a resident taxpayer in Finland from the time of his/her arrival to Finland. If the payer has reported that the income earner is a non-resident taxpayer in the earnings payment reports submitted to the Incomes Register, the information must be corrected in the Incomes Register by submitting replacement reports for the previous months.

3.6.1.1 Income has been taxed according to the act on the taxation of non-residents' income

If tax at source has been collected from the wage income of a non-resident taxpayer, and the income earner becomes a resident taxpayer in Finland, the tax at source must be corrected to withholding. The correction must be made so that the income is correctly taxed. Additionally, the payer has reported income earner details for a non-resident taxpayer to the Incomes Register which must be corrected by submitting a replacement report.

3.6.1.2 Income has been taxed according to the tax procedure act (so-called progressive taxation of a non-resident taxpayer)

If an employee who is a non-resident taxpayer has visited a tax office and obtained a progressive tax card for wage income, the employer has withheld tax from the wages according to the withholding rate on the tax card. In addition to this, the employer has reported data concerning a non-resident taxpayer to the Incomes Register in the income earner details, which must be corrected.

3.6.2 Taxation at source changes to progressive taxation

The wage income of a non-resident taxpayer is income subject to tax at source. The employer may collect tax at source from the income also without a tax at source card, but no tax at source deduction may be made from the income, then.

However, the non-resident taxpayer may request that the wage income is taxed progressively in accordance with the act on assessment procedure (laki verotusmenettelystä 1558/1995). He/she must then present a tax card of a non-resident taxpayer to the employer. When progressive taxation is applied to wage income, the earned income for the entire year is taxed in the same way.

If tax at source has been collected from the wage income at first, and an earnings payment report has been submitted for it to the Incomes Register, and the income earner then presents a tax card of a non-resident taxpayer, the payer must correct the earnings payment reports it has previously submitted to the Incomes Register.

3.6.3 Changes and corrections to insurance information

3.6.3.1 Obligation to pay health insurance contributions retroactively

An employee from another country has a health insurance in Finland immediately after entering Finland, if they are paid monthly wages for working in Finland equalling at least the amount of the basic unemployment allowance laid down in the unemployment security act (työttömyysturvalaki 1290/2002) converted into monthly earnings (EUR 726.27 in 2021). The payments received during the same calendar month are included in the monthly earnings, and the income limit is recipient-specific. If the monthly earnings remain below the aforementioned limit, the health insurance contribution is not paid even if the employee does not have a certificate of being covered by the social security of their country of origin.

It may sometimes initially seem like the monthly earnings of a person who has come to work in Finland from abroad will remain below the limit in question (EUR 726.27 in 2021). The employee's health insurance contribution is not then collected from the wages, nor is the employer's health insurance contribution paid. The situation may change, however, so that the limit for monthly earnings is exceeded and the person is covered by a health insurance in Finland based on their work. When the limit is exceeded, health insurance contribution is paid for the entire income for the month in question.

If the employee remains a non-resident taxpayer and the income is subject to tax at source, the employer may collect the employee's health insurance contributions during the upcoming wage payments by increasing the tax at source rate. However, the tax at source may not be increased by more than ten per cent of the amount to be paid without the consent of the income earner. In such a case, the health insurance contribution collected from the employee is reported to the Incomes Register with its own income type, Employee's health insurance contribution (412).

For an employee who is a resident taxpayer and an employee who is a non-resident taxpayer but has chosen progressive taxation of his/her income instead of tax at source, the health insurance contribution is levied in final taxation.

If the information on health insurance changes, the payer must cancel the report previously submitted to the Incomes Register and submit a new report.

3.6.3.2 Information on obligation to provide insurance changes

3.6.3.2.1 Income earner has not been insured in Finland

3.6.3.2.2 The income earner has been insured in Finland

4 Reporting obligation of a foreign employer

4.1 Foreign employer

In these instructions, a company that has not been established in accordance with Finnish law or that has a registered domicile elsewhere than in Finland shall be considered a foreign employer. A person who acts as an employer and does not live in Finland is also deemed to be a foreign employer (non-resident taxpayer).

A foreign payer must report the data to the Incomes Register primarily using a Finnish Business ID or Personal identity code. For more information on customer identifiers, see Section 1.7, Customer identifiers.

In Other payer details, Foreign employer must be selected as the payer type when the foreign company does not have a permanent establishment for income taxation in Finland. Additionally, in certain situations a foreign employer with no permanent establishment has to submit additional income earner information in addition to the income data. These are described in more detail in the examples of Section 4.5.

4.2 Foreign employer's obligation to report data to the Incomes Register

Foreign employers must submit earnings payment reports to the Incomes Register in the following situations:

• Income is paid to an income earner working in Finland, and one of the following criteria is met:
  • The income earner is insured in Finland.
  • The income earner stays in Finland for more than six months, even if they are not insured in Finland.
  • The income earner works in Finland as a leased employee for a service recipient in Finland. The data must be submitted when the tax treaty between the employee's country of residence and Finland allows the taxation of a leased employee's wages in Finland, or when there is no tax treaty.
• An income earner working abroad is paid income, and the income earner is insured in Finland.

If the foreign employer has a permanent establishment in Finland or it has voluntarily registered with the Finnish Tax Administration's Employer Register, the reporting obligation is more comprehensive. Read more in Section 4.4.

If a foreign company does not have a permanent establishment for income taxation in Finland, it is not required to report the non-wage compensation for work to the Incomes Register, even if the income earner was living in Finland.

If a foreign company has a permanent establishment for income taxation in Finland, it must report data on the non-wage compensation for work to the Incomes Register in the same manner as a Finnish company. However, this data does not need to be reported if the company has paid a non-wage compensation for work to a non-resident taxpayer for work performed abroad or has paid a non-wage compensation for work that is not deemed to be earned income under section 10 of the Income Tax Act.

4.3 Social insurance contributions and provision of insurance

A foreign employer must pay the social insurance contributions to Finland when the employee is insured in Finland. If Finland has a social security agreement with the employee's country of origin, and the employee has a certificate from their country of origin according to which they are covered by the social security of the country of origin, the social insurance contributions covered by the social security agreement are not paid to Finland.

A foreign employer is obligated to pay the employer's health insurance contribution based on the wages only if it obtains a permanent establishment for income taxation in Finland.

If the employer does not have a permanent establishment, the employer's health insurance contribution does not need to be paid even if the employee is insured in Finland.

The employer must report the employer's health insurance contribution to the Incomes Register on an employer's separate report if the company has a permanent establishment in Finland or if it is registered with the Tax Administration's employer register. The company submits one employer's separate report per month. If, based on the wages and other payments made during a reporting period, no health insurance contributions are paid, the employer should enter EUR 0 under Employer's health insurance contribution (total).

Read more about the employer's separate report in Reporting data to the Incomes Register: employer’s separate report.

Social insurance contributions or other fees collected from the employee in his/her foreign country of residence are not reported to the Incomes Register.

Social insurance contributions or other fees collected from the employee in a foreign country of do not need to be reported to the Incomes Register

4.4 Permanent establishment for income taxation and employer registration

If the foreign employer has a permanent establishment for income taxation in Finland or it has voluntarily registered with the Finnish Tax Administration's Employer Register, the reporting obligation is more comprehensive than otherwise for foreign employers.

The formation of a permanent establishment for income taxation affects whether the foreign company must register with the Tax Administration's Employer Register and what additional income earner information must be reported to the Incomes Register when reporting the income.

If a foreign employer has a permanent establishment for income taxation in Finland, it must submit data to the Incomes Register in the same manner as a Finnish employer. In such a case, Foreign employer is not reported as other payer details.

Foreign employers with a permanent establishment in Finland do not need to report wages paid to a non-resident taxpayer for work performed abroad or that otherwise is not deemed to be earned income in Finland according to section 10 of the income tax act (tuloverolaki 1535/1992). If the employee is insured in Finland, however, the report must always be submitted.

A foreign company must register with the Tax Administration's employer register as a regular employer if it has a permanent establishment for income taxation in Finland and pays wages for work performed in Finland. However, in certain cases, the company can be considered to be an employer casually paying wages. For more information on employer registration, see the Tax Administration Guidelines, Obligations of a foreign employer .If the foreign employer is registered with the employer register and pays no wages during some month, the company must submit the No wages payable entry on an employer's separate report.

If a foreign employer does not have a permanent establishment for income taxation in Finland, it may register with the Tax Administration's employer register if it so desires. In that case, it must report data to the Incomes Register just as Finnish employers do. However, the employer must submit additional income earner information to the Incomes Register in addition to the income data (for more detail, see Sections 4.5.3., 4.5.4 and 4.5.5), and report as other payer details that the payer is a foreign employer.

Foreign employers who have voluntarily registered with the Employer Register do not need to report wages paid to a non-resident taxpayer for work performed abroad or that otherwise is 5 not deemed to be earned income in Finland according to section 10 of the income tax act (tuloverolaki 1535/1992). If the employee is insured in Finland, however, the report must always be submitted.

4.5 Reporting data to the Incomes Register when the employer is foreign

4.5.1 Wages paid to income earner working abroad when the income earner is insured in Finland

A foreign employer must report to the Incomes Register the income paid to an income earner in certain situations also when the work has been performed abroad. A foreign employer has a reporting obligation when the income earner must be insured in Finland. The obligation to provide insurance may apply when, for example, the income earner regularly works in several different EU/EEA countries or in Switzerland. The income earner will then have an A1 certificate from Finland, issued by the Finnish Centre for Pensions.

When an income earner working abroad is insured in Finland, the additional income earner information must include the Person working abroad data. In Other payer details, Foreign employer must be selected as the payer type when the foreign company does not have a permanent establishment in Finland.

The Person working abroad additional information must be specified in the following cases:

• The income earner works in the service of a foreign employer abroad, and the employee must be insured in Finland. The foreign employer is obligated to report data to the Incomes Register.
• The income earner works abroad as an employee posted by a Finnish employer, and the income earner's work abroad must be insured in Finland. The Finnish employer is obligated to report data to the Incomes Register.

The Person working abroad additional information is not specified when an income earner mainly working in Finland makes a short-term business trip abroad, or when the payer is not obligated to provide insurance to the income earner (for example, the income earner is insured under the self-employed persons' pensions act (yrittäjän eläkelaki 1272/2006)).

In group situations, it must be ensured that the data is not reported to the Incomes Register twice; see Section 2.6.4. Foreign group company pays the wages.

The income earner can be a resident or non-resident taxpayer in Finland. In these kinds of situations, the data affecting taxation is reported in the same way as in Sections 2.3 A resident taxpayer works abroad and 2.6 A non-resident taxpayer works abroad.

4.5.2 Wages paid to a resident taxpayer

A foreign employer must report to the Incomes Register the wage income it pays to an income earner who stays in Finland for more than six months (resident taxpayer in Finland).

The obligation to report data to the Incomes Register for the Tax Administration only applies to work performed in Finland. However, a resident taxpayer has tax liability to Finland for global income. If the employee works partially in Finland and partially abroad during the same pay period, the foreign employer must submit data on the full income, i.e. also the share of the work performed abroad. If the employee is insured in Finland, a report must be submitted to the Incomes Register also when the work has been performed abroad in its entirety.

The employer must insure the employee in Finland if the employee is covered by Finnish social security.

4.5.3 Employee leasing

A foreign employer that leases employees to a service recipient in Finland must report to the Incomes Register any payments it makes to a leased employee coming to work in Finland from abroad.

In these instructions, a service recipient in Finland means a natural person living in Finland, a company established in Finland, or a foreign company with a permanent establishment in Finland.

The data must be submitted when the tax treaty between the employee's country of residence and Finland does not prevent Finland from taxing the employee's wage income. This data must also be submitted when there is no tax treaty.

Additionally, the employer must submit the data of the foreign employee leasing notice. The data is submitted for the Tax Administration. The data can be submitted either in connection with earnings payment data or separately. The recommendation is that the data on the employee leasing notice is submitted in a separate earnings payment report.

If the employer is registered in the prepayment register, the obligation to report the data to the Incomes Register lies with the employer. If the employer is not registered in the prepayment register, a representative of the foreign employer has a secondary obligation to report the data required for taxation to the Incomes Register. If, however, the representative does not report the data, it must be reported by the foreign employer. For more information on the reporting obligation of a representative, see Section 1.3, Representative of a foreign employer.

When a representative reports data to the Incomes Register on behalf of the employer, the representative's details must include Representative acts as submitter. The representative enters his/her/its own details in the Representative data group. In both an employee leasing notice and an earnings payment report, the representative specifies the actual employer as the payer. The representative can submit the data electronically if authorised to act on behalf of the actual employer. If the representative is not authorised, the data must be submitted on a paper form. In this case, too, the employer is specified as the payer.

4.5.3.1 Employee leasing notice

The employee leasing notice for a foreign leased employee must be submitted for every leased employee regardless of the duration of their work. The data must be submitted when the tax treaty between the employee's country of residence and Finland does not prevent Finland from taxing the employee's wage income or when there is no tax treaty. When the employee begins working in Finland, the employee leasing notice must be submitted no later than on the fifth calendar day following the first wage payment date. The data can be submitted either in connection with earnings payment data or separately. The recommendation is, however, that the employee leasing notice is submitted in a separate earnings payment report.

The data must include the estimated duration of the work assignment, the details of the Finnish service recipient and the details of the representative of the foreign employer. Furthermore, an estimate of the amount of pay for the entire tax year must be reported, as well as an estimate of the number of workdays in Finland when the income earner is a non-resident taxpayer.

Data reported on the employee leasing notice.

PAYER DETAILS
Identifier: Business ID
Identifier: Foreign identifier + country code
Payer type: Foreign employer
FORMS FOR WORK ABROAD
Form type: Employee leasing notice
INCOME EARNER DETAILS
Identifier: Personal identity code (Finnish) ddmmyy-1234
Identifier: Tax Identification Number (TIN) ZZZZZZZZ (+ the country code of the country that issued the TIN), (additionally, the foreign personal identity code can be reported) Address in home country: Address in the country of work: A temporary address in Finland (complementary data)
Additional income earner information: Leased employee living abroad
Estimated pay amount
Period of work in Finland: Start date End date
Number of workdays:
DETAILS ON FOREIGN LEASED WORKFORCE
Finnish service recipient's identifier
Representative’s name
Representative identifier
Representative's address
Representative acts as submitter (this data is submitted when the representative submits the data on behalf of the employer)

4.5.3.2 Wages of a leased employee paid by a foreign employer

When wages paid to a leased employee living abroad is reported to the Incomes Register, the following data must be included as an additional income earner detail: Leased employee living abroad. The data must be specified regardless of the duration of the work or whether the employee is a resident or non-resident taxpayer in Finland.

The additional detail Leased employee living abroad is submitted only when the foreign employer has no permanent establishment for income taxation in Finland. If the employer has a permanent establishment in Finland, this additional income earner detail is not used. In such a case, the payer does not need to report the other payer detail Foreign employer.

A report needs to be submitted to the Incomes Register only for leased employees coming from the following countries or regions: Bermuda, Cayman Islands, Spain, Georgia, Guernsey, Iceland, Jersey, Kazakhstan, Cyprus, Latvia, Lithuania, Isle of Man, Moldova, Norway, Poland, Sweden, Germany, Tajikistan, Denmark, Turkey, Turkmenistan, Belarus, and Estonia.

A report must also be submitted for leased employees who reside in Bulgaria, but work in Finland for non-Bulgarian employers.

A report must also be submitted for leased employees coming from countries with which Finland does not have a tax treaty. The treaties are listed on the web page Tax treaties.

If the employee is not covered by Finnish social security, this must be reported to the Incomes Register using the Type of exception to insurance data. The number of workdays must be reported when the income is paid to a non-resident taxpayer.

Read more on the taxation of foreign leased employees in Finland in the Tax Administration Guidelines, Foreign leased employees and taxation in Finland.

4.5.4 Wages paid by foreign employer when the employer pays taxes on behalf of the employee (”Net-of-tax” employment contract)

A net-of-tax employment contract is a contract based on which the employer promises to pay the taxes and employee's social insurance contributions from the wages, on behalf of the employee. When the foreign employer has no permanent establishment in Finland and the foreign employer does not withhold taxes in Finland, it must report Employer pays taxes on behalf of the employee ("Net-of-tax" employment contract) as an additional income earner detail in addition to the wages paid based on a net-of-tax employment contract. Furthermore, Foreign employer must be specified in other payer details. If the employer has a permanent establishment in Finland, the additional income earner detail or other payer details are not submitted.

The additional income earner detail is not needed when the employer has a permanent establishment in Finland or when the employer withholds taxes from the employee’s wages. Correspondingly, the other payer detail is not needed when the employer has a permanent establishment in Finland.

For more details on the net-of-tax employment contract, see the Tax Administration Guidelines, Taxable wage income when a foreign company pays net wages for work performed in Finland (in Finnish).

4.5.4.1 Reporting gross wages to the Incomes Register ("Net-of-tax" employment contract)

The gross wages, i.e. taxable wage income, must be reported to the Incomes Register. The social insurance contributions are also determined based on the gross wages. The tax rate calculator and the gross income calculator on the Tax Administration's website can be used to help calculate the gross wages.

The employer reports the amount of the taxable wage income calculated according to the Tax Administration's guidelines to the Incomes Register. The earnings payment report can be corrected later, if the originally calculated gross wages did not take into account all deductions, the tax benefit of which belongs to the employer in accordance with the net-of-tax employment contract. Fringe benefits must also be taken into account when calculating the taxable wages, and they must be separately reported to the Incomes Register.

4.5.4.2 Part of the wages are paid from abroad and part from Finland (net-of-tax employment contract)

The following example describes a situation in which a foreign employer pays monetary wages according to a net-of-tax employment contract, and a Finnish company additionally pays monetary wages.

When the Finnish payer gives the employee a housing benefit, for example, as part of the net-of-tax arrangement, and also pays monetary wages, tax must be withheld from the wages paid by the Finnish payer. The Finnish payer must report the wages it paid to the Incomes Register. The foreign employer reports to the Incomes Register the amount of wages resulting from subtracting the amounts reported by the Finnish payer from the taxable total wage income.

4.5.4.3 Work periods both in Finland and abroad during the same pay period (net-of-tax employment contract)

A foreign employer must submit two separate earnings payment reports to the Incomes Register, if the following conditions are met:

• the employer has agreed to pay net wages to the employee,
• the employee has work periods both in Finland and abroad during the same pay period and
• the employee’s country of residence according to the tax treaty is other than Finland.

Because the employee’s country of residence according to the tax treaty is other than Finland, Finland does not have the right to tax wages paid for work performed abroad. The additional income earner detail regarding the net-of-tax employment contract must only be submitted on wages paid for work performed in Finland. Wages paid for work performed abroad are submitted in a separate earnings payment report without this additional income earner detail. This ensures that the employee’s total wages are reported to the Incomes Register.

If the employee is not insured in Finland, both earnings payment reports must indicate the type of exception to insurance. If the employee is covered for work performed in Finland but not for work performed abroad, the type of exception to insurance in the earnings payment report concerning the work abroad should be Not subject to Finnish social security.

4.5.4.4 Correcting data in situations involving a net-of-tax employment contract

When wages are paid according to a net-of-tax employment contract, the wages taxable in Finland comprise the total amount of the net wages, the Finnish deferred tax and any social insurance contributions paid (so-called grossed-up wages). If the circumstances change, the amounts of the taxable wages and deferred tax for the tax year also change. Such changes include a change in wages, unexpected earlier termination or continuation of the employment, or, for example, a tax deduction being realised only later during the same year. In these situations, the amount of income previously reported to the Incomes Register must be corrected.

Already submitted earnings payment reports are not considered to have been submitted with incorrect data if the amount of gross wages changes due to a change in circumstances in the middle of the year (such as termination of employment or a wage increase). Changes in the calculated amount of wages can be taken into account on the reports for the pay periods following the change, however, no later than on the report of the December of the same year.

If the tax benefit from the employee’s personal deductions belongs to the employer, the employer must correct data submitted earlier in the year in question if the employee is insured in Finland. If data submitted earlier needs to be corrected (e.g. because personal deductions affect the gross wages or because the employment relationship has ended), it is only necessary to correct the last earnings payment report for the payment year. Earlier reports can also be corrected, if correcting just the report submitted last is not possible, for example, if the wages were reduced so much that the amount in earlier reports needs to be reduced as well.

If errors other than those described above are noticed in reports already submitted, such as typing errors, they must be corrected without undue delay in accordance with the instructions Correcting data in the Incomes Register.

If the employee's tax liability status changes, you can find information on correcting the data in Section 3.6.1.

4.5.5 Income earner did not stay longer than 183 days in Finland during the Tax-Treaty-defined sojourn period

A foreign employer must report to the Incomes Register data on wages it has paid when the income earner stays in Finland for more than six months (is a resident taxpayer in Finland). The income must also be reported to the Incomes Register when a tax treaty prevents Finland from taxing the income. A tax treaty prevents Finland from taxing the income if the employee stays in Finland no more than 183 days over a period of 12 consecutive months or during a calendar year, depending on the stipulations of the tax treaty between the employee's country of residence and Finland.

The additional data Income earner did not stay longer than 183 days in Finland during the Tax-Treaty-defined sojourn period is submitted when the foreign employer has no permanent establishment in Finland. If the employer has a permanent establishment in Finland, the wages are taxed in Finland and reported in the normal manner without additional income earner information.

When reporting the income, the country code of the country that has the right to tax the income must be reported.

If the stay in Finland happens to last longer so that the total stay exceeds 183 days over a period of 12 consecutive months or during a calendar year, depending on the tax treaty, the payer must correct the data submitted to the Incomes Register by submitting a replacement report. In the replacement report, the income is reported without the additional income earner detail Income earner did not stay longer than 183 days in Finland during the Tax-Treaty-defined sojourn period.

5 Special situations

5.1 Wages paid under the act governing the taxation of key employees

When the act on the tax at source payable by foreign wage-earners (so-called key employee act) (ulkomailta tulevan palkansaajan lähdeverosta annettu laki 1551/1995) can be applied to wage income, the Key employee data must be specified in the additional income earner information. For more information on the applicability conditions of the key employee act, see the Tax Administration Guidelines, Taxation of employees from other countries.

The same additional income earner detail is also used to report wages from which tax at source has been collected under the act on the taxation of employees of the Nordic Investment Bank, Nordic Development Fund and Nordic Environment Finance Corporation (laki Pohjoismaiden Investointipankin, Pohjoismaiden kehitysrahaston ja Pohjoismaiden ympäristörahoitusyhtiön palveluksessa olevien henkilöiden verottamisesta 562/1976).

The special tax at source collected from wages is reported as collected tax at source. The tax at source also covers the employee's health insurance contribution, so the employee's health insurance contribution is not collected separately. If, however, the employee is covered by Finnish social security, the other social insurance contributions must be paid.

When the Key Employee Act is applied to the income, the Key employee additional income earner detail is used only when the employee has obtained a tax card from the tax office, and an entry on the applicability of the key employee act has been made on the tax card. Data on the entire wages must be reported to the Incomes Register also in the situation where the employee can be considered to live in another country according to the tax treaty, based on which part of the wages is not taxed in Finland.

The key employee act cannot be applied for more than 48 months. If the application of the key employee act ends in the middle of the year and the person continues to work in Finland after this, the Key employee additional income earner detail is no longer used when reporting the wages for the rest of the year.

5.2 Wages paid for frontier work

The Person working in a frontier district entry is specified in the additional income earner details when the work is frontier work referred to in the TREKK Treaty and the income earner lives in Sweden or in Norway. It is also required that the income earner works in a Finnish municipality on the same land border. The provision on the taxation of frontier work in the TREKK Treaty only applies to wage income.

No income tax is collected for the income in Finland, but the Finnish employer must pay the social insurance contributions and collect the employee's health insurance contribution based on the wages paid.

If the employee has an A1 certificate from his/her country of origin, the social insurance contributions are paid to the country that issued the certificate.

If the employee performs part of their work in a non-frontier district in Finland, the share of the wages based on this work is subject to taxation in Finland. A separate report of this income must be submitted to the Incomes Register where the additional income earner detail related to frontier work is not included.

If the income earner lives in Finland and works in a frontier district in Sweden or in Norway, the Person working in a frontier district additional income earner detail is not reported for work performed in the frontier district.

The frontier districts are:

• Municipalities sharing the same land border between Finland and Sweden are
  • In Finland: Enontekiö, Kolari, Muonio, Pello, Tornio and Ylitornio, and
  • In Sweden: Haparanda, Kiruna, Pajala and Över-torneå.
• Municipalities sharing the same land border between Finland and Norway are
  • In Finland: Enontekiö, Inari and Utsjoki, and
  • In Norway: Karasjok, Kautokeino, Kåfjord, Nesseby, Nordreisa, Storfjord, Sör-Varanger and Tana.

For more information on frontier work, see the Tax Administration Guidelines, Taxation of a frontier worker.

5.3 Athletes

An athlete can be paid wages or fees. Athlete's wages and athlete's fees are reported to the Incomes Register by specifying the Athlete data in the additional income earner information and using the income types for wages or non-wage compensation for work.

For more information on the payments made to an athlete and the social insurance contributions to be paid from them, see the instruction, Reporting data to the Incomes Register: rewarding employees, payments made to an entrepreneur and other special situations.

An athlete's fee paid to an athlete who is a non-resident taxpayer must be reported to the Incomes Register regardless of whether the recipient is registered in the prepayment register.

5.4 Performing artists

The compensation paid to a performing artist can be non-wage compensation for work or wage income. Performing artists include stage and film actors, radio and television performers, and musicians. When a performing artist is paid wages or a non-wage compensation for work he/she has done as a performing artist, the Performing artist data must be reported in the additional income earner information.

A performing artist's fee paid to an artist who is a non-resident taxpayer must be reported to the Incomes Register regardless of whether the recipient is registered in the prepayment register.

5.5 Wages paid by an international specialised agency

International specialised agency’ refers to an agency subject to a specific agreement that lays down provisions, for example, on the scope of tax liability of such agencies and their employees. Such specialised agencies include the European Chemicals Agency ECHA, the Baltic Marine Environment Protection Commission HELCOM, the World Institute for Development Economics Research, and the International Organisation for Migration IOM.

When the payer is a specialised agency established with an international agreement, and the agreement is also applied to the wages earned by the income earner, International specialised agency must be specified in other payer details.

When the payer is a specialised international agency, the payer must also report the Foreign employer entry. This entry is submitted always regardless of whether the agreement concerning the specialised agency is applied to the income earner’s income.

Wage income paid by a specialised agency is not taxed in Finland based on the agreement concerning the international specialised agency. However, the wages may be subject to certain insurance payments depending on the agreement. If wage income earned by the income earner is not taxed in Finland based on the provisions of the applicable tax agreement, the International specialised agency entry does not need to be specified in other payer details. In such situations, the income earner must request the application of the tax agreement to the income in their tax return. This may be the case, for example, when the wages are paid by a cultural centre operating in connection with a foreign mission.

The insurance contributions for which there is no obligation to provide insurance must be reported to the Incomes Register using the Type of exception to insurance data. If the income is not subject to any insurance contributions, the following data is reported to the Incomes Register: Type of exception to insurance: No obligation to provide insurance (earnings-related pension, health, unemployment, or accident and occupational disease insurance).

If an employee working for a specialised agency is covered by the Finnish residence-based social security, health insurance contributions will be levied from the income earner as back taxes in connection with final taxation. The specialised agency does not have an obligation to pay the employer’s health insurance contribution even if the employee is health-insured in Finland.

5.6 Wages paid by a diplomatic mission located in Finland to a foreign citizen

The Person receiving wages paid by a diplomatic mission additional income earner detail must be specified when a foreign country's diplomatic mission in Finland or other comparable representative office or a consulate pays wages to an employee who is not a Finnish citizen. If the employee is a Finnish citizen, the Person receiving wages paid by a diplomatic mission entry is not needed. A representative office must report data to the Incomes Register if it is liable to report data to one of the Incomes Register data users.

The Person receiving wages paid by a diplomatic mission additional income earner detail must be specified for income earners whose wages are not taxed in Finland pursuant to section 12 of the Income Tax Act. The additional income earner detail is not needed when the wages are paid by a cultural centre operating in connection with a foreign mission, for example. In such situations, the tax agreement restricts Finland’s right to tax, and the income earner must request the application of the tax agreement to the wages in their tax return.

When the payer is a diplomatic mission in Finland, the payer also reports the Foreign employer entry. This entry is submitted always regardless of the citizenship of the income earner. The insurance contributions for which there is no obligation to provide insurance must be reported to the Incomes Register using the Type of exception to insurance data. If the income is not subject to any insurance contributions, the following data is reported to the Incomes Register: Type of exception to insurance: No obligation to provide insurance (earnings-related pension, health, unemployment or accident and occupational disease insurance).

5.7 Non-wage compensation for work or compensation for use (royalty) paid to a non-resident taxpayer

Non-wage compensation for work or royalty paid to an organisation

The payer must submit a report to the Incomes Register of the non-wage compensation for work paid to an organisation that is a non-resident taxpayer if tax at source has been collected from the non-wage compensation for work. The income is reported using the Non-wage compensation for work (336) income type.

Compensation for use, or royalty, paid to an organisation that is a non-resident taxpayer (e.g. compensation paid for a copyright) must always be reported to the Incomes Register regardless of whether tax at source was collected from it or not. The income is reported using the Compensation for use, earned income (362) income type.

When the payment is made to a foreign organisation, Organisation must also be specified as the type of additional income earner information. Furthermore, the income earner details must include the following data: Non-resident taxpayer: Yes.

Non-wage compensation for work or royalty paid to a natural person

If the non-wage compensation for work or royalty (i.e. compensation for use) was paid to a natural person who is a non-resident taxpayer, the data must be reported to the Incomes Register even if no tax at source was collected from the payment. A non-wage compensation for work is reported under Non-wage compensation for work (336) and a royalty under the Royalty paid to a non-resident taxpayer (362) income type.

The income earner details must include the following data: Non-resident taxpayer: Yes.

For more information, see the Tax Administration Guidelines, Paying non-wage compensation to a foreign company.