Working in Finland as a self-employed person
As a foreign self-employed individual, you are always expected to send the Finnish Tax Administration an account describing the work you do in Finland. Each time you get a new assignment or job, you should submit such an account again. However, if you are registered in Finland as a self-employed individual operating a trade or business, you are not required to submit the accounts.
The pay you get for your work is considered trade income – it is not wages. It may be that you must pay Finnish tax on the income you receive if you stay long enough or if you are treated as having a fixed base in Finland.
If your country has no tax treaty with Finland, it is within Finland’s taxing rights to impose tax on your trade income. The length of your stay will determine whether you must pay e.g. 35% in source tax or whether your tax rate will vary according to the progressive scheme of income taxation. You should submit an application either for a tax card or for a calculation of prepayments, depending on whether you are staying for max. 6 months or longer.
How long you stay in Finland affects taxation
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 income from a business or trade operated in this country is regarded as income received from Finnish sources.
If you stay longer than 6 months, you are treated as a Finnish tax resident. This means that you normally 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 imposing tax on the income you receive from outside Finland.
During the work year, you must usually pay tax in advance. The amount of tax is based on an estimate of your annual income. The following year, you will receive a pre-completed tax return. Check and send back the tax return. You will then receive a final tax decision. If you have not received a pre-completed return by letter, you must file a tax return on your own initiative for both your private and business income in MyTax or on paper forms.
Having a fixed base in Finland
If you have a fixed base or a permanent establishment in Finland, you must pay tax to Finland on all the income relating to it. The following circumstances may give rise to a fixed base if you are a self-employed person who:
- conducts business in Finland in an office, workshop or in your home
- sells goods or services in Finland in a marketplace, at a trade fair or at events
- participates in a construction project or an installation project in Finland that lasts longer than the time limit provided by the applicable tax treaty (6, 9, 12 or 18 months).
You must also check whether your trade or business operation necessitates registration for value added tax in Finland.
If you are about to start up business, see the guidance for new entrepreneurs.