Working in a foreign diplomatic mission or in an international organisation – how is your income taxed?
If you work in a foreign diplomatic mission or for a special organisation in Finland, your wages may be exempt from tax in Finland.
In general, it is standard practice for special organisations to enter into an agreement with the host country regarding the privileges that the organisation can enjoy. Several organisations have set up offices in Finland. Some of them have agreed with Finland on tax-related arrangements, which in some cases provide for special tax treatment of the organisation’s employees.
Examples of those organisations include
- The HELCOM Commission for Marine Environment Protection in the Baltic Sea
- The World Institute for Development Economics Research (UNU-WIDER)
- The International Organization for Migration (IOM)
- United Nations Technology Innovation Lab (UNTIL).
You are a citizen of Finland and you work here for a special organisation
If you are a Finnish citizen working in Finland for an international special organisation, it is possible that your wages and salaries are exempt from tax by virtue of an international convention that concerns your employer. If such a convention is in effect, making your wages tax-exempt, the size of your annual wages has no impact on the tax treatment of any other income you might earn. In addition, you do not have to pay the Finnish health insurance contribution although you might be covered by the health insurance system of Finland.
If the wage you receive from an international special organisation is exempted from taxation in Finland, you are not required to include the wage income in your tax return.
Note: Finland’s Supreme Administrative Court gave its ruling no 2021:54 dated 30 April 2021 on matters relating to employment income from a special organisation. According to the ruling, receipts of wages from such an organisation do not count toward the employee’s progressive income taxation in cases where the individual employee earns other income besides the wages (i.e. no impact on income-tax progression).
The previous practice had been the contrary: if individuals received income from an organisation, it was included in the total on which the progressive income-tax rate depends. In addition, the previous practice also required that the Finnish health insurance contribution be paid if the employee was covered by the Finnish health insurance system.
Check your tax decision to make sure that your wage income was treated as fully exemptible if you received it from the UN, a special organisation of the UN, or from another organisation or specialised agency.
Claims for adjustment against income taxes can be made within 3 years from the beginning of the calendar year following the tax year.
Read more: Claim for adjustment of income tax
For more information, the telephone service can be contacted: International income taxation of individual taxpayers, 029 497 024
You are a citizen of Finland and you work in Finland for a diplomatic mission
If you are a Finnish citizen living in Finland on a permanent basis, you only have to pay taxes to Finland on the wages and salaries you receive from the foreign diplomatic mission. However, there may be a double tax treaty between Finland and your employer’s country, the provisions of which may affect the tax treatment. We recommend that you check the provisions of the treaty.
If you are covered by the Finnish health insurance system, your wage is subject to the Finnish health insurance contribution.
Submit an application for tax prepayments on your wage income.
Read more: Prepayments – individual taxpayers
Pre-completed tax returns are sent to individual taxpayers in spring. After you receive yours, please check all the information carefully. If your Pre-completed tax return does not seem to contain the wages that should be there, you should submit the information on the received income in MyTax or on Form 50A (Earned income and deductions).
If you are not a Finnish citizen
When your country of citizenship is other than Finland and:
- you work in Finland for the United Nations or for a Special Organization of the United Nations,
- for the International Atomic Energy Agency or
- for a foreign country’s diplomatic mission,
you do not have to pay tax to Finland on the wages and salaries you receive for the work. In addition, you do not have to pay the Finnish health insurance contribution although you might be covered by the health insurance system of Finland.
The exemption concerns employees who have an employment contract with one of the above organisations or with a diplomatic mission.
If you get an item of miscellaneous income from time to time, and this is the only type of income you receive from the organisation or diplomatic mission, that income is not exempt from taxation.
Taxes are due for other categories of income
If you are employed by a foreign diplomatic mission, the UN or its special organisation or the International Atomic Energy Agency, you must pay tax to Finland on the following income only:
- income from a real estate property located in Finland
- income from business activities in Finland
- rental income derived from an apartment that you own as a shareholder of a Finnish:
- housing company or other limited liability company
- cooperative society
- wages and pension income that you receive for your other employment in Finland.
The above limitations extend to:
- The family members of the foreign nationals referred to above, including their private servants, on the condition that they are not Finnish citizens.
- People working in a foreign diplomatic mission, even if they are not citizens of the country in question.
Your tax return is only for your income subject to Finnish tax
When you complete your tax return, there is no need to include the part of your income that is non-taxable in Finland. However, you should provide information on such income if the Finnish Tax Administration has asked you to do so.
You work in Finland for the Nordic Investment Bank
If you were a non-resident taxpayer when you signed the employment contract
If the country where you work is Finland and your employer is the Nordic Investment Bank (NIB), the Nordic Development Fund (NDF) or the Nordic Environment Finance Corporation (NEFCO), you pay 40% tax on your annual wage income. This is a final tax, withheld at source. Alternatively, for each taxable year, you can opt for tax treatment under the progressive schedule.
The final tax withheld at source also covers the employee’s health insurance contribution, so that contribution is not charged to you separately although you are covered by the Finnish health insurance system.
If you have opted for the final tax (40%), there is no need to report your wages on the Finnish pre-completed tax return.
If you lived in Finland and were a resident taxpayer when you signed the employment contract
If you receive wages from the Nordic Investment Bank (or other), you must pay progressive State tax, municipal income tax and sometimes church tax to Finland.
If you work partly abroad or live abroad
The wages you receive from the Nordic Investment Bank (or other) is usually subject to tax in Finland only insofar as you live and work in Finland. If you live in Finland but do remote work for the Investment Bank from abroad, for example, you may not have to pay Finnish tax on the part of your wages that is attributable to work done abroad. If you live permanently abroad, Finland may not have the right to impose tax on your wages, not even on the part attributable to work done in Finland.
In such cases, call 029 497 024 (international tax matters) and request that your tax card should indicate that the employer does not need to withhold tax on that part of your wages that Finland is not entitled to tax. If needed, explain that you live permanently abroad and work partly abroad. The Finnish Tax Administration may ask you to provide additional information to determine your country of residence.
If you also have other earned income
If in addition to your income from the Nordic Investment Bank you also receive other earned income taxable in Finland, you will need a tax card for the latter income or you will have to request prepayments. The income you receive from the Nordic Investment Bank raises the tax rate applied to your other income earned at the same time. In a case like this, call us on 029 497 024 (international income taxation of individual taxpayers) and specify the amount of income you receive from the Nordic Investment Bank in addition to your other earned income.
You work in Finland for ECHA
If you work for ECHA, the European Chemical Agency, you do not have to pay tax to Finland on your wages. The Protocol on the privileges and immunities of the European Union is applied on ECHA employees.
There is no need for you to provide information on your wages from ECHA on the Finnish Pre-completed tax return. Your income from ECHA has no impact on the tax treatment of any of your other earned income.
In addition, your ECHA wages do not give rise to an obligation to pay the Finnish health insurance contribution even if you are covered by the health insurance system of Finland.