Foreign leased employees – taxation depends on how long you stay and on the treaty between your country and Finland
If you arrive in Finland as a leased employee and get paid by a foreign employer, the important factors affecting your taxes are how long will you stay in Finland and what the provisions of the tax treaty are. In this context, ‘foreign employer’ means an employer that is not Finnish.
This guidance concerns leased employees if the following circumstances apply:
- Your employer is a foreign company.
- You come from a country that has not signed a tax treaty with Finland or from one of the countries listed below that have a treaty:
Albania, Belarus, Bermuda, Cayman Islands, Cyprus, Denmark, Estonia, Georgia, Germany, Guernsey, Iceland, Isle of Man, Jersey, Kazakhstan, Latvia, Lithuania, Moldova, Norway, Poland, Spain, Sweden, Tajikistan, Turkey, Turkmenistan.
Do you arrive in Finland as a leased employee from a country with which Finland has a tax treaty but your country is not on the list above? The guidance articles you should read are different for those who work for a foreign employer and for those who work for a Finnish employer.
When are you considered a leased employee?
The following circumstances make you a leased employee:
- You have an employment contract with a foreign employee leasing agent, not with any other employer. This is the company that pays you.
- However, you work under the Finnish service recipient's management, direction and control. In addition, you may use the tools and materials belonging to the service recipient, and the place where you do the work may belong to the service recipient.
If you are a leased employee working on board a ship that sails in international waters or aircraft that flies international routes, read Operation of ships and aircraft in international traffic.
Your employer is a foreign leasing company but your service recipient is Finnish – you must pay tax to Finland
If the party that pays you wages is the foreign leasing agent but the party that directs and manages your work is a Finnish company (= service recipient), you must pay Finnish taxes starting your first day of work. This is true regardless of how long you stay in Finland.
However, how much you must pay is affected by how long you stay.
If you stay in Finland for no longer than 6 months, you are considered a non-resident taxpayer. This normally means that you must pay tax at source on the income you receive from Finnish sources. The rate of the tax is 35%.
The amount that is considered your wages subject to taxation is the income that remains after a ‘tax-at-source deduction’ is made from your overall income. The size of this deduction is €510 per month. If you work for less than a month, the tax-at-source deduction is granted to you on the basis of €17 a day instead.
If your country of residence is an EU country, Norway, Iceland or Liechtenstein or a country that has a tax treaty with Finland, you can ask to be taxed progressively.
Paying taxes
APPLY FOR A FINNISH PERSONAL ID
You must visit a tax office to sign the form after you have filled it in. It is required that you visit the tax office in person.
REQUEST A CALCULATION OF PREPAYMENTS OR REQUEST A TAX CARD
Fill in the form and take it to the tax office with you.
MAKE AN APPOINTMENT AT A TAX OFFICE
You must visit a tax office so you can be identified and can be given a personal ID.
Do this by the end of the calendar month after the month when you started your work. If you do not submit a request for tax prepayments on time, the Tax Administration may impose a tax increase.
Please take the following documentation 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 work 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 work 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 or EEA state, Great Britain or Switzerland.
If you cannot log in to MyTax, make an appointment by calling 029 497 050 (if you are calling from abroad, +358 29 497 050).
If you do not have an A1 certificate:
- In addition to the tax that must be withheld, your employer also withholds pension and unemployment insurance contributions from your pay and remits them to insurance companies.
- If you are covered by the Finnish health insurance scheme based on your work, your employer will also withhold a health insurance contribution from your pay (health care contribution and daily allowance contribution). Read more about health insurance contributions for individuals coming to work in Finland.
More information on insurance is available from
- Finnish Centre for Pensions (ETK)
- pension insurance companies
- accident insurance companies
PAY THE TAXES
Depending on whether your employer is treated as having a permanent establishment in Finland and entered in the Finnish register of employers, the tax office will issue you either a tax-at-source card or instructions on how to make prepayments of income tax.
To see whether your employer is on the register of employers, you can make the following check: Enter the employer’s company name in the search field of the Finnish Business Information System website. You can probably find out from your employer whether or not the employer's business operations give rise to a permanent establishment in Finland.
If you do not prepay the amounts as instructed, back tax will be imposed on you, and you may also have to pay interest on it.
You must take care of your prepayments yourself if your employer is not registered and not treated as having a permanent establishment.
In this case, you should make the prepayments independently during the year when you do your work.
You may ask for progressive income taxation of your earned income instead of taxation at source. It means that your payments of tax depend on a rate that will grow if you receive an increase in income – and shrink if your income goes down. All your income and deductions over the year are taken into consideration in the progressive scheme when your rate of tax is calculated.
If the foreign leasing agent who pays you wages is on the Finnish register of employers, or has a permanent establishment in Finland, you will need a tax-at-source card.
In this case, you pay 35% of your income as tax at source. Your employer applies a ‘tax at source deduction’ on your pay before calculating the tax to be withheld at source. This deduction amounts to €510 per month or €17 per day. The employer withholds the tax on your wages.
The tax at source is a final tax. You do not need to file a tax return to the Finnish Tax Administration.
You may ask for progressive income taxation of your earned income instead of taxation at source. It means that your payments of tax depend on a rate that will grow if you receive an increase in income – and shrink if your income goes down. All your income and deductions over the year are taken into consideration in the progressive scheme when your rate of tax is calculated.
If you come to Finland temporarily but stay for longer than 6 months, you are treated as a resident taxpayer. Your treatment is the same as if you lived here on a permanent basis. This means that you normally have to pay tax to Finland on all income you receive. However, your home country and Finland may have signed a tax treaty that prohibits Finland from taxing the income that you receive from outside Finland.
The percentage rate of the tax collected on your wages depends on your annual gross income according to a progressive scale. You need a Finnish personal ID and a tax card.
APPLY FOR A FINNISH PERSONAL ID
You must visit a tax office to sign the form after you have filled it in. It is required that you visit the tax office in person.
REQUEST A CALCULATION OF PREPAYMENTS OR REQUEST A TAX CARD
Fill in the form and take it to the tax office with you.
You must take care of your prepayments yourself if your employer is not registered and not treated as having a permanent establishment.
If the foreign leasing agent who pays you wages is on the Finnish register of employers, or has a permanent establishment in Finland, you will need a tax card.
MAKE AN APPOINTMENT AT A TAX OFFICE
You must visit a tax office so you can be identified and can be given a personal ID.
Do this by the end of the calendar month after the month when you started your work. If you do not submit a request for tax prepayments on time, the Tax Administration may impose a tax increase.
Please take the following documentation 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 work 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 work contract:
- who your employer is
- who the party in Finland who ordered the work is, i.e. 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 or EEA state, Great Britain or Switzerland.
If you cannot log in to MyTax, make an appointment by calling 029 497 050 (if you are calling from abroad, +358 29 497 050).
If you do not have an A1 certificate:
- In addition to the tax that must be withheld, your employer also withholds pension and unemployment insurance contributions from your pay and remits them to insurance companies.
- If you are covered by the Finnish health insurance scheme based on your work, your employer will also withhold a health insurance contribution from your pay (health care contribution and daily allowance contribution). Read more about health insurance contributions for individuals coming to work in Finland.
More information on insurance is available from
- Finnish Centre for Pensions (ETK)
- pension insurance companies
- accident insurance companies
PAY THE TAXES AS PREPAYMENTS OR HAVE YOUR EMPLOYER WITHHOLD THE TAX FROM YOUR WAGES
Depending on whether your employer is treated as having a permanent establishment in Finland and entered in the Finnish register of employers, the tax office will issue you either a tax card or instructions on how to make prepayments of income tax.
To see whether your employer is on the register of employers, you can make the following check: Enter the employer’s company name in the search field of the Finnish Business Information System website. You can probably find out from your employer whether or not the Finnish authorities treat it as having a permanent establishment in Finland.
If you do not prepay the amounts as instructed, back tax will be imposed, and you may also have to pay interest on it.
You must take care of your prepayments yourself if your employer is not registered and not treated as having a permanent establishment. In this case, you should make the prepayments independently during the year when you do your work.
If the foreign leasing agent who pays you wages is on the Finnish register of employers, or has a permanent establishment in Finland, you will need a tax card. The employer withholds the tax on your wages, following the instructions printed on your tax card.
Your taxation is progressive: your tax rate depends on your total annual gross income. The rate may vary from 0% to 50%.
Remember to file a Finnish tax return
You must file a Finnish tax return if you stay in Finland for longer than 6 months. The Finnish Tax Administration will send you a pre-completed tax return form in the spring following the year when you worked in Finland. Check the information printed on the pre-completed tax return form.
If all the information on the pre-completed tax return is correct, you do not need to do anything. You have received your final assessment decision as an enclosure to the tax return form.
If the pre-completed tax return does not have your income information or some information is missing, make the necessary corrections in MyTax or on paper forms. You must also include all income that you received from foreign sources during your stay in Finland.
The pre-completed tax return – making corrections in MyTax or on paper
You will receive a new tax decision in the autumn with the final amounts of taxes. If you have paid too little, you will be given instructions on how to pay back taxes. If you are not satisfied with the tax decision, instructions for appeal are enclosed with it.
If you do not receive a pre-completed tax return, you must file a return at your own initiative in MyTax or on paper forms.
Normally, you will not have to report income that you have received
- before you moved to Finland
- after you moved out from Finland.
This income is normally not taxed in Finland. However, if you receive income that is connected to your work in Finland (such as stock option benefits), this income is normally subject to Finnish tax.
Paper forms and instructions for filing are available in English.
Further information:
Read more on the taxation of foreign leased employees.
Read a checklist for leaving Finland.
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