Managing director or member of a governing body – how to take care of your taxes in Finland
Do you receive remuneration for acting as a member of the board of directors, a managing director, a member of the supervisory board or the chair of the annual general meeting? The remuneration you receive is always regarded as salary in Finnish tax assessment, even if it is paid to your company or employer.
If you live in Finland and receive remuneration for being a managing director or a member of a governing body, you usually pay tax to Finland. Whether you receive the income from Finland or abroad is unimportant. However, if you are a foreign company’s managing director or board member, Finland's right to tax may be limited by a tax treaty
If you receive remuneration for being a member of the board of directors or another governing body in a Finnish organisation or partnership, your remuneration is regarded as income taxable in Finland. It makes no difference what your country of residence is or whether the meeting is held in another country, or whether you participate in the meeting online.
If you stay in Finland for 6 months or less, the tax to be withheld at source is 35% of the remuneration.
The tax at source is a final tax, so you do not need to file a tax return in Finland. Your employer gives you a pay slip that specifies your income and the tax withheld at source. Keep the pay slip for future use. It may be needed in your home country’s tax assessment for the elimination of double taxation.
If you stay in Finland for more than 6 months, your Finnish tax rate will depend on your income. Request a tax card according to these instructions
If you come to Finland temporarily but stay for longer than 6 months, you are treated as a resident taxpayer. This means that you will usually have to pay tax to Finland on all the income you receive. However, your home country and Finland may have signed a tax treaty that prohibits Finland from taxing the income you receive from outside Finland.
If you have a Finnish employer, your tax depends on your annual gross income according to a progressive scale. You will need a Finnish personal ID and a tax card.
See further instructions if you will be working in construction.
APPLY FOR A FINNISH PERSONAL ID
You must visit a tax office to sign the form after you have filled it in. Read more about the documents you need to bring along and about booking an appointment at the local tax office.
APPLY FOR A TAX CARD AND PRESENT THE CARD TO YOUR EMPLOYER
Send the completed form back to the Tax Administration. The postal address is on the front page.
If you have a Finnish personal identity code already, you need not visit a tax office in person. You can simply send us the application form for a tax card.
If you come from another EU country, an EEA country, from the United Kingdom or from Switzerland, the authorities of your country may provide you with an A1 certificate. A1 is a certificate on social insurance coverage, proving that you carry social insurance in your home country. Enclose your A1 certificate with the application form.
You will receive your tax card by letter. Give the card to your employer. Based on the information stated on your tax card, your employer will withhold tax on your pay.
You can use the tax percentage calculator to estimate your withholding rate.
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:
- employer details
- the party in Finland who ordered the work
- your full name and date of birth
- length of employment in Finland including start and end dates
- place of work and a short description of the work to be done
- photocopy of A1 certificate, if you have one (A1 is a certificate on social insurance coverage issued by the authorities in your home 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 029 497 010 (if you are calling from abroad, +358 29 497 010).
The Tax Administration makes sure that your tax matters are in order. We will send you a tax card or instructions for making prepayments.
GIVE THE TAX CARD TO YOUR EMPLOYER
When you start working, give the original copy of your tax card to your employer. Based on your tax card, your employer will withhold tax on your pay.
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.
If you receive remuneration for acting as a managing director, and if you work mostly in Finland and your employer is Finnish, you pay tax to Finland. The managing director’s remuneration qualifies for a tax-at-source deduction of €510 per month or €17 per day.
If you stay in Finland for 6 months or less, the tax to be withheld at source is 35% of the remuneration.
The tax at source is a final tax, so you do not need to file a tax return in Finland. Your employer gives you a pay slip that specifies your income and the tax withheld at source. Keep the pay slip for future use. It may be needed in your home country’s tax assessment for the elimination of double taxation.
If you stay in Finland for more than 6 months, your Finnish tax rate will depend on your income.
Report the income received from Finland on the tax return of your country of residence
When you submit your tax return to your country of residence, include the following items:
- the income you have received from Finland
- the taxes you have paid to Finland.
If you also pay tax on your income to your country of residence, the country of residence will eliminate the resulting double taxation.