Foreign key person – you can pay tax at source on your income

If you are a foreign key person and your employer is Finnish, you can pay 32% of tax at source on your income even if you stay in Finland for more than 6 months. However, you must meet the following criteria:

• You become a resident taxpayer in Finland when you start working here.
• Your cash salary for your duties as a key person is at least €5,800 a month. Fringe benefits are not included in the cash salary. If you come to Finland to teach or do research in an institute of higher education, there is no minimum requirement for cash wages.
• Your work in Finland requires special expertise.
• You are not a Finnish citizen.
• You have not been a resident taxpayer in Finland during 5 calendar years before the start of your work. 

These rules also apply if your employer is not Finnish but your wages are paid by a Finnish party at your foreign employer’s request. For example, your wages may be paid by an accounting agency.

If you do not meet the above criteria, read the instructions relevant to you:

• Coming to work for a Finnish employer
• Working in Finland for a foreign employer

How to request a tax card

A key person’s tax treatment is indicated on the tax card. Request a tax card within 90 days after starting your work as a key person. You can receive the tax relief only for your first 48 months of work.

Note: You do not need to request a new tax card if

• you have requested a tax-at-source card before 2020
• your tax card is still in force
• your circumstances have not changed.

Until the end of 2019, the tax-at-source rate for key persons was 35%. Starting 1 January 2020, employers have been able to withhold 32% at their own initiative, even if the tax rate specified on the tax card was still 35%.

Your employer withholds insurance contributions from your wages

No health care contribution or daily allowance contribution is withheld from your wages.

However, your employer will withhold pension and unemployment insurance contributions, unless you have

• an A1/E101 certificate issued by your home country
• another such certificate showing that you are covered by insurance in your home country.

You are not entitled to tax deductions

You cannot make tax deductions from key person’s income. In addition, you cannot deduct expenses related to key person’s income in the taxation of your other income.

If you also earn other income, the key person’s income will raise the tax rate applied to it.

Tax card needed for other income, earned simultaneously with key-person income

If, in addition to your pay taxed as income received by a key employee, you also receive other income subject to Finnish tax on earned income, you must either request a tax card or request a tax-prepayment calculation.  Your pay classified as key employee income has a progression impact, so it makes the withholding rate higher on your other earnings.
If you have other earnings, call our telephone service at 029 497 024 (international income taxes) and provide the necessary information on your income, including the other earnings, taxable in Finland, that are outside of your key-employee income.

Detailed guidance: Taxation of key employees