If you work in Finland, your wages or salary are normally taxed in Finland. For this, you need a Finnish tax card (an employee's withholding allowance certificate). To get the card, you must first get a Finnish personal identity code at the Local Register Office or tax office. We recommend that you contact a tax office soon after you arrive in Finland.
Tax Return on the Web (tax.fi/taxreturn)
Go to online service
The e-Service has opened 8.3.2018 for the taxpayers whose personal deadline date for filing a tax return is 3.4.2018 (self-employed traders and self-employed professionals). For other taxpayers, the opening date is at the end of March.
Your Finnish-sourced employment income is usually taxed in Finland even if you stayed for a short time only. If your employer is based in another country but operates a trade or business in Finland from a permanent establishment for tax purposes, they are treated as a Finnish employer. Exceptions from the above are rules are in the tax rules that concern:
Read more about getting a personal identity code
Staying 6 months or less – Tax at source
If your stay is temporary, you are treated as a tax nonresident. Your employment income is subject to tax at source, assessed at the flat 35-percent rate. We recommend that you contact the Tax Administration to get a tax-at-source card, entitling you to a deduction amounting to €510 per month or €17 per day – this is known as the deduction for tax at source (in Finnish: lähdeverovähennys; in Swedish: källskatteavdrag).
Your employer cannot deduct these amounts from your pay unless you present a tax-at-source card. You must give the original copy of the card to your employer. When you are taxed under this scheme, the tax withheld at source is your final tax, and do not have to file a tax return in Finland.
Example: If €2,000 is your monthly gross income and you have no tax-at-source card, the tax is 35% or €700. If you have given your employer a tax-at-source card with instructions for giving you a deduction, the tax is €521.50 ( = (€2,000 – €510) × 35%). Remember that not only your cash wages but also any benefits are included in the pay. (The benefits may include free meals, or accommodation etc.)
No A1/ E101 Certificate – liable for Finnish social security contributions
Besides taxes, employers must additionally withhold mandatory pension insurance and unemployment insurance contributions. If the duration of your work in Finland is 4 months or more, you must also make a health insurance contribution (consisting of two parts: a healthcare payment + an earned-income contribution payment).
For more information, visit the websites of the Finnish Centre for Pensions (etk.fi), of pension insurance companies, and of the Finnsh Unemployment Insurance Fund (tvr.fi).
However, if you have an A1 or E101 Certificate from your country, showing that you remain under its social insurance regime, no Finnish contribution payments are withheld.
Reporting your Finnish-sourced income in your home country
The country where you are registered as a tax resident normally has the right to collect tax on your income, both when its source is that country and when its source is a foreign country. When you complete your income tax return in your country, you must not forget to report your Finnish-sourced income on it. Your employer gives you a pay slip that shows the amounts paid to you and the taxes withheld on them at source. You may need it when you deal with the tax authorities of your country. If they impose a tax on foreign-sourced income, it will also remove any double taxation on it.
Asking for progressive income taxation
If you live in a country within the European Economic Area or a country that has a tax treaty with Finland, you can request that your income be taxed under the progressive scale, that is, in the same way as that of those who stay in Finland longer than six months.
EEA states include all EU member states and Norway, Iceland and Liechtenstein. List of states with whom Finland has concluded a tax treaty.
'Progressive scale' means that the rate of tax changes according to the size of your annual gross income and deductions. Progressive taxation requires that you have submitted an application for a nonresident's tax card.
Application to Finnish Tax Authorities for Progressive Income Taxation
When you fill out the application form you must report all your Finnish-sourced earned income, your taxable earned income in your country of tax residence, and all deductions from them. Finland only taxes your income from Finnish sources, but your taxable income from your country of tax residence will have an increasing effect on your taxation in Finland. Examples of earned income taxable in your country include employment income, social benefits (unemployment allowance, students' grants) and pensions.
Asking for deductions
You may claim the following expenses as tax-deductible:
- Commuting expenses (your daily travel between home and work)
- Expenses for the production of income
- Pension insurance and unemployment insurance contributions
- Interest expenses on a home loan.
If the tax authorities of your country do not yet have full details on your annual taxable income and deductions when you fill in your application form, you must complete it with enclosures including a pay slip, a document that establishes the amount of unemployment allowance paid to you, a decision on your pensions, or other reliable documentation on your income. You may additionally enclose a tax certificate showing the results of your latest taxation in that country.
Pre-completed tax return forms
If your Finnish taxation is by the progressive scale, you will receive a pre-populated tax return during the following year on which you will find a specification of your income and deductions, and the final result of your assessment. You must check the contents of that tax return and send it back to us with corrections if necessary. If you make corrections, we will send you a new tax decision in the autumn.
For example, if you have worked in Finland during the first months of the year, and you have reported us an estimated figure on your home-country income for the remainder of the year, you must check the pre-populated details and if necessary, enter a correction to the income you received during the final months of the year. If the estimated figure was too high, you may have paid too much Finnish tax. In that case, you will receive a new tax decision that sets out a tax refund to be paid back to you.
In the reverse case, if the estimated figure was low, you may have paid too little Finnish tax. Then the correction will result in a new tax decision that specifies a back tax.
Use the Tax percentage calculator to estimate your withholding (vero.fi/verolaskuri).
Example: If your annual gross income is around €25,000, the rate of tax is 15% (in addition, pension and unemployment insurance contributions may be withheld).
If you did not ask for progressive tax during the income year when your employer(s) withheld source tax on your pay, you still have the option to do so afterwards if you send back the pre-populated tax return complete with an application for progressive taxation.
Staying 6 months or more – annual income determines the tax rate
If you stay longer than six months, you are treated as a Finnish tax resident. The percentage rate of your tax depends on your annual gross income according to a progressive scale. You must request the Tax Administration to issue you an ordinary tax card (withholding allowance certificate). For this, you need a Finnish personal identity code. You must give your employer the original copy of the card.
Use the tax percentage calculator to estimate your withholding. Besides tax, your employer must also withhold a health insurance contribution (consisting of two parts: a healthcare payment + an earned-income contribution payment), social security and insurance contributions (some 7% to 8% in total) unless you have an A1 or E101 Certificate showing that you remain under the social security regime of your home country. Then you do not have to make the Finnish contributions.
Filing a Finnish tax return
Those staying longer than six months in Finland must file a tax return. In April after the calendar year during which you worked in Finland, the Tax Administration sends you a pre-populated return form. In some cases, we can only send you a blank tax return form with no pre-populated information on it – then you must complete its lines yourself and send it back to us. Check the pre-populated details and if you note any errors and omissions, make the corrections. If you had any income from foreign sources during your stay in Finland, you must report that as well. If you find no errors and omissions in the pre-populated details, you do not have to send it back. If you do not receive the return from the Tax Administration, you must take action to file it on your own initiative. Use Form 3001 for this purpose.
Send back the corrections on the form to the Tax Administration and remember to authorise it with your signature. The return address is printed on it. Later, in autumn, we will send you a new tax decision that shows the final amount of your taxes. If you must pay back taxes, we also send you instructions for payment. The envelope also contains instructions for appeal.
There is no need to report the income you have received prior to your arrival in Finland, or after you left Finland. That income is normally not taxed in Finland. However, if you receive income that relates to your work in Finland after you have left, this is normally considered taxable income in Finland. Examples of such income include an employee stock option benefit from the period when you worked in Finland.
Within one week after you leave Finland, you must file an address change notice to the Local Register Office. We recommend that you also inform the Finnish Tax Administration directly of your leaving. You can also check your tax estimate will change for your final year. We also recommend that you give the tax office a report of your income and deductible expenses during your final pay periods in Finland, because these facts are used in the tax assessment of your final year is prepared. Your obligation to file a tax return remains in force for the year when you move away. Check with the tax office that the bank account number in a bank outside Finland is correct. If you are due a tax refund, it will be transferred to your account directly.