Self-employed persons from abroad – the fixed base, the permanent establishment

You need to pay taxes to Finland if you are treated as having a permanent establishment or a fixed base, and your activity is permanent.  To be ‘permanent’ means permanence in terms of time as well as permanence in terms of geographical location. 

If your activities are considered permanent, you become liable for paying income tax to Finland on your pay connected with your trade or business.

For purposes of taxation, your activity is permanent in terms of time if you are active for longer than 6 months.

On the other hand, your activity is permanent in terms of its location in circumstances illustrated by the following examples:

• You operate trade in Finland in an office, in a workshop or in your apartment
• You keep a sales stand at a marketplace or a small retail space inside a shopping centre, etc.
• You work in the shipbuilding industry, at a shipyard
  • Note: Many of the tax treaties between Finland and other countries contain provisions on construction and installation work including relevant time limits, but these time limits are not applicable to shipyard work.

Please note that if your country of residence has a tax treaty with Finland, the rules concerning permanent establishments and fixed bases may vary in accordance with the specific clauses included in that treaty. For this reason, we recommend that you check what has been agreed in the treaty between your country and Finland.

Example: You are a professional subcontractor working at a shipyard in Finland for 10 months. Your country of tax residence is Poland. In general, a shipyard is seen as a distinct geographical location having permanence. Your work at the shipyard will also be deemed as permanent in terms of time, because the subcontract’s duration is longer than 6 months. This way, you are treated as working from a fixed base, permanent in terms of time and in terms of its location. You pay income tax to Finland as you receive compensation or pay for your self-employed work at the shipyard.

If you carry out a construction or installation contract in Finland, and the length of time is longer than the time limit provided by the applicable tax treaty (6, 9, 6 or 12 months), you need to pay taxes to Finland. The counting of the length of time is not based on any single contract that was drawn up. Instead, it is based on how long you actually work at the construction site.   

Example: You are a resident of Poland and you work in Finland as a self-employed professional at a construction site for a house. Your contract is for 8 months. According to the provisions of the Poland–Finland tax treaty, the time limit for construction and installation work is 12 months. Because your stay is shorter than the time limit, no fixed base is formed. You need not pay tax to Finland on the income you receive for your professional activity under the contract.

Example: You are self-employed, resident of Estonia, and you work in Finland at a construction site for a house. Your contract is for 8 months. The time limit for construction and installation work in the tax treaty between Finland and Estonia is 6 months. Because the length of time agreed in the contract is longer, your work will give rise to a fixed base for you. You must pay taxes to Finland on the income you receive. 

We recommend checking what your country of residence and Finland have agreed in their tax treaty. In the case of Estonia, the time limit for a fixed base is 183 days in a period of 12 straight months. 

Example: You are a self-employed professional, resident in Estonia, and you work on 2 construction sites in Finland. Your activity on the first one lasts for 4 months. Then you move to another Finnish district to start working on the second site, where you have a different contract. This contract is for 3 months. As a result, you stay and are active here for 7 months in total. Because of the stay exceeding 183 days during a period of 12 straight months, you are treated as having a fixed base. You must pay taxes to Finland on the income you receive.

If you are a resident of another Nordic country and you stay in Finland for more than 183 days during a period of 12 straight months, you become liable for paying tax to Finland even if no fixed base is formed here.

If your country of residence has no tax treaty with Finland, you must pay tax to Finland on the income you receive for operation of trade or business here. To receive the income from your customer, we recommend that you submit an application for a tax card, tax-at-source card, or prepayments.

Read more about how to deal with your taxes when arriving in Finland