Foreign worker staying no longer than 6 months – you have the option to claim progressive tax treatment
Progressive taxation means that your tax treatment depends on your income – the more you earn, the more tax you pay. In the progressive scheme, all your income and deductions over the year are taken into consideration when your tax rate is calculated.
You are entitled claim tax treatment under the progressive scheme, and thus avoid being taxed by the “at source” system, if the length of your stay in Finland is max. 6 months and if your home country is
- an EU country, Norway, Iceland or Liechtenstein, or
- it is a country that has signed a tax treaty with Finland.
You must have a Finnish personal ID before you can submit your request for progressive treatment.
Fill out three forms and reserve an appointment at a tax office
APPLY FOR A FINNISH PERSONAL ID
Complete Form 6150e to request a personal ID.
You must visit a tax office to sign the form after you have filled it in.
APPLY FOR A TAX CARD
Complete Form 5057e to request a nonresident’s tax card.
APPLY FOR PROGRESSIVE TAXATION
Complete Form 6148e to request treatment under the progressive income tax scheme.
You are required to report the following amounts:
- earned income from sources in Finland
- the earned income for the entire year, which is subject to tax in your country
- your deductions against earned income
RESERVE AN APPOINTMENT AT A TAX OFFICE
You must visit a tax office so that you can be identified and you can be given a personal ID.
Please bring the following with you:
- the forms you have filled in
- a valid passport or official proof of identity (not a driver’s licence)
- a valid residence permit or visa if necessary
- photocopy of your work order or employment contract
- a written account given by your employer regarding your work in Finland, if the following information is not included in your work order or employment contract:
- who your employer is
- who the party in Finland who ordered the work is, i.e. who is the service recipient
- your full name and date of birth
- information on the start and end dates of your work in Finland
- information on the place where work is done and a short description of the work you do
- a photocopy of the A1 certificate, if you have one (A1 is a certificate issued by the authorities in your home country, affirming that you are covered by the social security system of that country). You can get an A1 certificate from your country if you are coming from another EU/EEA country or from Switzerland
The Tax Administration makes sure that your tax matters are in order. We will send you a tax card or instructions for making prepayments.
Submit the forms and enclosures to the Tax Administration
Finland will only collect taxes on the income you get from Finland. However, when the income subject to tax in your country is taken into consideration, the Finnish income tax rate is made higher. Examples of earned income taxable in your country include employment income, social benefits (unemployment allowance, students' grants) and pensions.
You may claim the following expenses as tax-deductible:
- commuting expenses, i.e. 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
Please note that the tax authority in your country is probably not aware of all your taxable earned income, and deductions related to that income, at the point in time when you are completing the application form.
Examples of documents you can enclose with the application:
- a certificate proving the amount of your wage income
- if you receive unemployment relief, a document proving the amount you receive
- if you receive pension income, the decision on pension
- other documentation to prove how much income you receive
It may also be a good idea to enclose a tax certificate from your country that shows the results of the latest assessment of your taxes there.
Check your pre-completed tax return
If your income was subjected to progressive taxation in Finland, you will receive a pre-completed tax return by letter the following year. The amounts printed on it show your taxable income, deductions, and the final results of the Finnish tax assessment.
Check that all the information on the tax return is correct. If there is no need for changes, you do not have to do anything. You can make additions and corrections to your tax return information in MyTax.
Report income that you have received from your home country
For example, if you worked in Finland during the first months of the year and you had given the Finnish Tax Administration an estimated figure on your home-country income for the remainder of the year, enter the correct amount of income you have since received.
- If the estimated figure was too high, you may have paid too much Finnish tax. In this case, the Finnish Tax Administration will send you a new decision, which probably states that a tax refund will be paid back to you.
- On the other hand, if the estimated figure was too low, you may have paid too little Finnish tax. Then we will send you a new letter that requires you to pay us an additional amount – this is your back tax.
If you make corrections to your pre-completed tax return, we will send you a new tax decision in the autumn. You will see the final amount of taxes printed on it. If you must pay back taxes, we will also send you instructions for payment. In addition, the letter contains instructions on how a claim for adjustment can be made.
Example: If your annual gross income is around €25,000, the rate of tax is 15%. (In addition to income tax, pension and unemployment insurance contributions may also be withheld from your wages.)
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. File the information on paper forms