The party that pays the grant reports it to the Tax Administration. The details on the grant are included in your pre-completed tax return. The tax return includes both tax-exempt and taxable grants.
Tax-exempt or taxable grant?
A grant or scholarship received for studies, academic research or artistic activity may be tax-exempt income.
If the grant is paid by a public authority, such as the State of Finland, a municipality, the Central Arts Council, a local arts council, the Academy of Finland or the Nordic Council, it is entirely exempt from tax regardless of the amount.
If the grant is paid by a private party, it is exempt from tax if the total amount of grant income you receive for the year (from both private and public sources) does not exceed the amount of the State’s artist grant. See the annual amounts of the artist grant in section 2.2 of the Tax Administration’s detailed guidance (available only in Finnish and Swedish).
For example, you will have to pay tax for grants you received in 2020 if the total grant income you received from public and private sources in 2019 is more than €23,376.45 after the deduction of expenses. In 2020, the maximum amount of tax-exempt grant income goes up to €23,668.35.
Please note that the exemption from tax only applies to grants or scholarships received for studies, academic research or artistic activity as well as to the so-called library grant paid to authors and translators. Grants and scholarships awarded for other purposes are always taxable earned income, regardless of who pays them.
Check your pre-completed tax return
Your last year’s grants are pre-completed on your tax return as reported by the payor.
On the pre-completed tax return for 2020, grants paid by private parties are listed as taxable income even if the total amount of grant income does not exceed €23,376.45. However, you still do not need to pay tax on the grants unless they exceed this amount. If all the other information is correct, you do not need to make changes to the grant details.
If you have taxable grant income, your tax return will show the text “Total taxable grants” and the taxable amount in euros. In this case, you will also be able to claim the expenses relating to the grants.
Check the information on your pre-completed tax return and make any necessary corrections.
- Report details on any grants, scholarships or awards that are missing from your tax return or that are incorrectly presented on it. Report both taxable and tax-exempt grants.
- Also report the expenses that have arisen from your studies, research or other activities for which you have received taxable grants. Deductible expenses include workspace expenses, equipment costs and travel expenses relating to the grants. Itemise the expenses based on whether they relate to taxable or tax-exempt grants.
- Read more about filing in the instructions for filling in Form 10
If the grant information is pre-completed on your tax return, you can make changes to it in MyTax under Pre-completed details. If grants are missing from your tax return, you can report them in MyTax under Other income > Grants.
If you submit the information on paper, fill out Form 10 Grants. The form must arrive at the Tax Administration by the due date of your tax return.
If the grant was awarded to a group of people, it is usually only shown on the pre-completed tax return of the person who applied for the grant. In this case, the tax return will include the following text: “You have received a grant paid to a working group. Report your share of the grant in MyTax or on paper.”
Report your own portion of the grant in MyTax or by filing Form 10. Also report all expenses relating to the grant to reduce the taxable amount. Remember to check the details on the grant and make additions and corrections as necessary.
Example 1. Tiina’s tax return shows €100,000 of grant income paid to her working group. She logs in to MyTax and corrects the amount to €20,000, which is her portion of the group’s grant. She also claims the expenses relating to her grant portion. The tax returns of the other members of the group, Simo and Pertti, do not show any grant income. They add their portions of the grant as new information to their tax returns. Tiina, Simo and Pertti will all receive new tax decisions later with revised information on their grants.
Example 2. Jesse has received a grant, but he has used the entire amount to pay for expenses relating to his research project. He claims the expenses on his tax return. After the expenses have been deducted, there is no taxable grant income left. Jesse will later receive a new tax decision with revised information.
If the Tax Administration requests more information on how the grant income has been divided between the members of the working group, you must give an account on the matter. If the grant has been awarded to a research group, it can only be treated as grant income for those members of the group who participate in the research.
When is the grant taxed?
Starting in 2019, scholarships, prizes, study grants and other grants are regarded as income for the tax year in which they are paid. Up to tax year 2018, grants were taxed as income for the year when they first became available for the beneficiary.
Report your share of the grant that was divided between the research group as the grant amount in MyTax. Also report your expenses that relate to the grant. If your share on the grant is €0, remove the grant by clicking the Delete information button. Please note that MyTax does not allow changing the amount of the grant to zero.
If you file the information on paper, you must report your share of the grant under section 3.1. Taxable grants on Form 10 (Grants). Report your expenses that relate to the grant under section 4.
Do not attach an account of how the grant was divided between the members of the research group. However, be sure to keep the account for yourself. We may ask you to provide it, if necessary.
You will receive a new tax decision at a later date, by the end of October at the latest.