Work in a foreign country for a Finnish employer

If you work continuously for a period longer than six months in another country, your wages from working in another country may be exempt from Finnish tax (in reference to the six-month rule). Wage income is exempt in Finland if all of the following preconditions are fulfilled:

• Your continuous stay in the country where you work is based on work-related reasons, and you are staying for at least 6 months.
• You spend less than 6 days in Finland (on average) for each full month of work in another country.
• The bilateral tax treaty between Finland and the country of work imposes no restrictions that would prevent the country of work from collecting tax on your wage income.

Under tax treaties, countries where work is performed have taxing rights if you stay there more than 183 days during a specified period. Depending on the tax treaty, calculation of the number of days is based either on 12 consecutive months or on the calendar year. The country of work also has taxing rights if your Finnish employer has a permanent establishment in the country. Where the country has no tax treaty with Finland, the six-month rule may be applicable if the preconditions regarding duration of work period and time spent in Finland are fulfilled.

If you work remotely from Finland during your period of work abroad, the wages paid for work carried out at home in Finland are considered taxable income in Finland for resident taxpayers even if the income earned from the work carried out outside Finland is tax-exempt based on the six-month rule.

The six-month rule is not usually applicable to remote work abroad, because in that case the work is not the reason for the stay abroad.

It should be noted that the six-month rule is only applicable to wages paid by a private-sector employer. If you work in another country and your employer is a Finnish public body, or you are an employee working on board a Finnish ship or aircraft, the six-month rule will not apply.

Use the following table to find out whether the six-month rule applies to your wages:

Kuuden kuukauden säännön soveltaminen (pdf, only in Finnish)

Tax withholding and payment of the health insurance contribution

If your employer has examined your circumstances and come to the conclusion that your overseas work fulfils the requirements of the six-month rule, your employer may be excused the withholding of tax in Finland from your wages. However, if your coverage by the Finnish social security system continues, your employer must still withhold a health insurance contribution from your pay i.e. approximately 2 percent of gross wages.

If the requirements for application of the 6-month rule are not fulfilled, the pay is considered taxable income in Finland. In general, the pay is taxed in the same way as pay received from work done in Finland.

The country where you work may also tax your pay in certain circumstances, for example if you stay in the country for more than 183 days during a period of time specified in the tax treaty. Depending on the tax treaty, the calculation of the number of days is based either on 12 consecutive months or on the calendar year. The country of work also has the right to tax your pay if your Finnish employer has a permanent establishment in the country or if the country of work does not have a tax treaty with Finland.

If the country where you work has the right to tax your pay, the elimination of double taxation will be conducted in Finland. For more information, see the guidance Elimination of double taxation — receipts of foreign-sourced income by a Finnish-resident individual.

Elimination of double taxation on the tax card

You can request a tax card that already takes into account the elimination of double taxation. The Tax Administration will usually issue one tax card for the tax year, which takes into account your estimates of the amount of pay received from abroad, of the work done in Finland, and of the amount of tax payable abroad. 

Example 1:

You work in Germany regularly for one week every month. Your Finnish employer has a permanent establishment in Germany, which means that Germany has the right to tax the pay you receive for the work done in Germany.

In your tax card request, specify your pay for the entire year, the part of the pay you receive for working in Germany, and an estimate of the amount of tax to be paid to Germany. The taxes you pay in Germany are taken into account in your tax rate. Your employer withholds tax from your pay for the entire month.

If you work abroad for a longer period, you can request a separate tax card for the work abroad. In this case, the taxes paid abroad will be taken into account in the tax card for the period during which you work abroad and pay tax abroad.

Example 2:

During the tax year, you work in Germany for 4 months, and otherwise you work in Finland. Your Finnish employer has a permanent establishment in Germany, which means that Germany has the right to tax the pay you receive for the work done in Germany. You can request a separate tax card for the work abroad.

In your tax card request, report your pay for the entire year, the part of the pay you receive for working in Germany, and an estimate of the amount of tax to be paid to Germany. You will receive two tax cards. One of the cards will be for the pay you receive for your work done in Finland.  The other tax card will be for the pay you receive for the work done in Germany, and this card will take into account the taxes payable to Germany.

In certain situations, the employer can choose to not withhold tax at all or to subtract the amount of tax paid abroad from the tax withheld in Finland. Read more: Taxation of income earned abroad, 7.2.2 Six-month rule is not applicable

How to request changes to your tax card

• Request changes to your tax card in MyTax or on Form 16A in the section “Earned income from work to which the six-month rule does not apply”.
  • Report the pay you have received from work done abroad and the amount of tax you have paid abroad.
• Report the amount of pay relating to work done in Finland in MyTax or on Form 5010 in the section “Pay and fringe benefits”, in the column “Estimated total gross income for the year”.
• Include with your application a free-form account of the periods of time you have worked abroad and of the reasons why the country of work has the right to tax your pay. If you want a separate tax card for your work abroad (example 2), mention this in your application.

If you need more information on how taxation processes work in the country where you work, contact the tax authorities of the country in question.