Cross-border commuter – How to take care of your taxes in Finland
Do you live in a municipality located next to the border between Finland and Sweden or Finland and Norway and work in another municipality next to the same border in the other country? If so, the cross-border commuter rule may be applied to your tax assessment. The cross-border commuter rule means that your wage income is taxed only in the country where you live, i.e. in the country of tax residence. However, the rule is not applicable if you work as an artist or athlete, or if your income consists of social benefits, pensions or business income.
Municipalities on the border between Finland and Sweden: Enontekiö, Kolari, Muonio, Pello, Tornio, Ylitornio, Haparanda, Kiruna, Pajala, Övertorneå.
Municipalities on the border between Finland and Norway: Enontekiö, Inari, Utsjoki, Karasjok, Kautokeino, Kåfjord, Nesseby, Nordreisa, Storfjord, Sör-Varanger, Tana.
For purposes of taxation, you are a cross-border commuter if you live in a municipality located next to the border between Finland and Sweden – or Finland and Norway – and work in another municipality next to the same border in the other country. Your home municipality and work municipality on the other side of the border do not need to be neighbouring municipalities. According to the cross-border rule, you must reside in your home country on a regular basis. This means that you stay in your permanent residence in your home country at least once a week, no less than two days and one night each week.
Example 1. The municipality of Enontekiö is bordered by Sweden and Norway. If you live in Enontekiö, you can work as a cross-border commuter in the bordering municipalities in both Sweden and Norway. But if you live, for example, in Tornio, you can work as a cross-border commuter only in Sweden.
Example 2. You live in Inari, Finland and work in Kåfjord, Norway. You are regarded as a cross-border commuter even though Inari and Kåfjord do not have a common border.
Esimerkki 3. Asut Utsjoella ja työskentelet Kiirunassa Ruotsissa. Et ole verotuksessa rajankävijä, koska Utsjoen kunta ei rajoitu Suomen ja Ruotsin väliseen maarajaan.
You must take care of your Finnish taxes by making prepayments. Foreign employers are not liable to withhold and pay Finnish tax on your wage income.
You can request a tax calculation for prepayments either online or with a paper form.
- Request the prepayment calculation in MyTax.
- Fill in the paper form Application for tax card or tax prepayment (Form 5010e)
In addition, you will have to provide the tax authorities of your country of work with a certificate of residence. Request a certificate in MyTax or by calling our service number for international tax matters. See the service numbers.
The certificate indicates the municipality where you lived at the end of the previous year.In Finnish tax assessment, your home municipality is the municipality where you lived at the end of the year preceding the tax year. If, during the tax year, you move to a municipality on the border, you will not be regarded as a cross-border commuter until the following year. Correspondingly, if you move away from a municipality on the border during the tax year, you are still treated as a cross-border commuter for the whole tax year, if the other conditions of the cross-border commuter rule are met.
How to file on your tax return
If your foreign employer has reported your wages to the Incomes Register, the income is indicated on your tax return. If you do not find your wage income on the tax return, file it in MyTax. Answer Yes to the question “Is your income earned in Sweden or Norway as a cross-border worker?” Alternatively, you can file the missing wages on paper by using Form 16A Statement on foreign income (earned income). Check the box at Income is income earned in Sweden or Norway as a cross-border worker. The pre-completed tax return – making corrections in MyTax or on paper
In general, employees must be insured in the country where they work, even if the tax treaty provisions on cross-border commuters prohibit the taxation of the employee’s wage income in that country. Therefore, your employer in the other Nordic country will withhold insurance contributions on your income. If you are insured in Finland, provide your employer with certificate A1 or E101 or a similar certificate showing that you are covered by insurance in your home country.
Give a tax-at-source card to your employer.
If you request a tax-at-source card with a paper form, do as follows:
Use the correct form: “Application for a tax-at-source card/tax card – Individuals who leave Finland or are living in a foreign country” – Lähdeverokortti- tai verokorttihakemus (6207a), (available in Finnish and Swedish)
On the tax-at-source card application, tick “Other; please specify” in the Type of income section. Write “Cross-border commuter’s income” in the field.
You need a certificate stating that your country of residence as meant in the tax treaty is Sweden or Norway. The certificate also has to include your home municipality in Sweden or Norway. To get the certificate, contact the tax authority of your country of residence. Attach the certificate to your request for a tax card or a tax-at-source card.
Send the form and certificate of residency to the address stated on the form.
Your home municipality is the municipality where you lived on 1 November of the previous year. In Sweden, the certificate is called Hemvistintyg, and in Norway, Bostedsbekreftelse etter skatteavtale. If necessary, you can use the Tax Administration Form 6132f Certificate of residence and tax liability for the use of Finnish tax authorities.
If you were granted a cross-border commuter’s tax card in the previous year and you still live in a border municipality, you can use a certificate provided by the population information system of your country of residence to show that you live in a border municipality and are entitled to a cross-border commuter’s tax card. In Sweden, this certificate is called Personbevis.
If you request a tax-at-source card in MyTax, do as follows:
Request the tax card: Go to the Activities tab and then click the Tax-at-source card or tax card for abroad link under Requests. You can leave the field for further information blank. Report your wages in the Other income section and enter “Cross-border commuter’s wages” for Type of income.
Attach the certificate of residency. See the section “If you request a tax-at-source card with a paper form” to learn what kind of certificate you need and where you can get it.
How to report on your tax return
Report the income received from Finland on the tax return of your country of residence.
In general, employees must be insured in the country where they work, even if the tax treaty provisions on cross-border commuters prohibit the taxation of the employee’s wage income in that country. As a result, your Finnish employer will withhold insurance contributions on your income. If you are insured in your country of residence, provide your employer with certificate A1 or E101.
You have paid tax to Finland
It may be that the company that pays you wages has withheld tax in Finland although you only need to pay taxes to your country of residence. The Finnish Tax Administration cannot refund that tax to you. Instead, you must submit an application for having it transferred to your country of residence.
Call our service number +35829 497 024 (individual income taxes, international) for instructions.