You can claim deductions for the expenses associated with the production of capital income.
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The e-Service has opened 8.3.2018 for the taxpayers whose personal deadline date for filing a tax return is 3.4.2018 (self-employed traders and self-employed professionals). For other taxpayers, the opening date is at the end of March.
Expenses for the production of income
Examples include telephone, computer, professional literature – what you have paid must be associated with the production or maintenance of capital income. Additionally, you may be entitled for a deduction for your expenses for a workspace or office, depending on whether your investment activities are considered to be your main occupation or merely a secondary activity through which you receive some additional income occasionally.
If the expenses have to do with the management or safe keeping of securities, shares, book-entry holdings or similar, you must first subtract €50 which is your own liability. Nevertheless, you must report the expenses on your tax return in full, without subtracting the €50.
Interest expenses for loans
Your interest payments entitle you to deductions only if you have borrowed money to buy a permanent home or to finance your expenses for the production of income (for example, you have borrowed money to buy an apartment to rent out for rental income).
More information on the deductibility of interest expenses (in Finnish and Swedish).
If there is no capital income, or not enough taxable capital income to claim deductions from, you may deduct the payments in the form of a tax credit for a deficit in capital income (in Finnish: alijäämähyvitys; in Swedish – underskottsgottgörelse) against your income tax on earned income.
More information on this tax credit (in Finnish and Swedish).
Premiums of individuals' voluntary pension insurance contracts and deposits to 'PS' individual retirement accounts
You can deduct up to €5,000 of pension insurance payments, whether they are premiums of an insurance contract or deposits into an individual retirement account (known as 'PS' for the Finnish words for long-time saving: pitkäaikainen säästäminen). This tax relief is granted to the individual taxpayer who is the beneficiary of the pension – in other words, even if your spouse had actually paid the premiums or deposits, you are the only person who can claim because you are the beneficiary of the pension.
If there is no capital income or not enough of it, you get the tax credit for a deficit in capital income (in Finnish: alijäämähyvitys; in Swedish – underskottsgottgörelse) against your income tax on earned income. The credit is 30 percent of the amount that remains undeducted.
Introduction to the tax deductions offered to individuals signing a voluntary pension insurance contract (in Finnish and Swedish).
Further guidance on the tax deductions for signing a voluntary pension insurance contract or opening a 'PS' individual retirement account (in Finnish and Swedish).
When you claim an allowable loss, the income from which you claim it must fall into the same category as the loss. This means that you cannot deduct a loss associated with your earned income from your capital income and vice versa. In addition, the losses must be claimed against the same source of income as where they arise: you cannot deduct a loss incurred in a business operation from profits originating from farming (agricultural operation), and similarly, you cannot deduct a loss that relates to agriculture from the profits of a business operation.
Deduction of capital loss is now allowed against capital income
Starting 2016, all kinds of capital income may be subject to a deduction for capital losses incurred when the taxpayer sold property or transferred it otherwise and made a loss. Capital losses that have arisen before 2016 are deducted only from capital gains, not from all capital income. The reform thus only concerns the capital losses that arise in 2016 or later.
If you have no capital income or if you have less capital income than what the deductible capital loss amounts to, the deduction is carried forward to the following five years. However, the fact that you have made a capital loss does not give you a credit (for a deficit) which would relieve the taxation of your earned income.
Smaller capital losses are not deductible: if during the tax year, the total of the acquisition costs of the sold assets is no more than €1,000, no deduction is granted.
More information on capital loss (in Finnish and Swedish).
An income source resulting in a loss
You are entitled to claim deductions for an agricultural or business loss, on the condition that you make the claim before the tax assessment process has ended for the tax year concerned.
This way, if you are a partner in a farming consortium and the farm has made a loss (or has been terminated and the final result is a loss), you may claim that it be deducted from your capital income. You must enter the loss claim in the appropriate line of the Pre-completed tax return form.
A negative result in the capital-income category
If it turns out that your tax-deductible losses exceed your taxable capital income, the result is a deficit, which you can deduct from the income tax on your earned income. But if there is not enough such tax to deduct from (in other words, to give you credit for a deficit in capital income – in Finnish: alijäämähyvitys; in Swedish – underskottsgottgörelse), the tax office will record an allowable loss in the capital-income category for you. The allowable loss can be carried forward for 10 subsequent years, and you can claim it from whatever capital income you have during those years.
Repayments of shareholder loans
If you are a shareholder of a company that has given you a loan and you are paying it back to the company in installments, you can deduct the installments from your capital income for the years of repayment. This is because the loan has originally been taxed as capital income the year when you received it. If there is not enough taxable capital income, you may deduct the repayments in the form of a tax credit for a deficit in capital income (in Finnish: alijäämähyvitys; in Swedish – underskottsgottgörelse) against your income tax on earned income.
More information on shareholder borrowing treated as taxable income (in Finnish and Swedish).
An aftermarket bonus means a payment similar to interest income that you may receive if you have owned bonds and sold them. It relates to the period between the latest date when you received interest on the bonds and the date when you sold them.
When the party who buys the bonds from you pays you compensation, it is called aftermarket bonus, which the buyer can treat as an expense for the production of income, entitling them to a deduction in their own tax assessment.