A business vehicle can be used temporarily on a tax exempt basis
If you reside permanently in Finland but your company is located abroad, you can temporarily use a motor vehicle in your employer’s ownership or custody without having to pay tax on it in Finland.
A vehicle can be used exempt from vehicle tax if the following requirements are met:
- The vehicle must be permanently registered in the State where the registered site of employment is located.
- Use of the vehicle is permitted in Finland only for the handling of work-related tasks. The use of a motor vehicle for travelling between one’s home and workplace does not come under the handling of work tasks.
- The vehicle is used in Finland continuously for a period of three days at a maximum.
- The vehicle is returned to the country of registration after the completion of the respective work assignment.
Report the temporary use of a motor vehicle to the Finnish Tax Administration
Before you begin to use a motor vehicle in Finland, submit a notification of this to the Finnish Tax Administration. The Tax Administration will confirm that the notification has been received. Keep the Tax Administration’s ratification of motor vehicle use with you when using the vehicle. The ratification is valid for a maximum of one year at a time.
- Notify the Finnish Tax Administration by using form 1240e (Declaration of the temporary tax-exempt use of a business vehicle)
Return the notification by post to the address noted in the form. Also bear the following in mind:
- Prepare a new notification for the Tax Administration if changes occur in the information you have reported.
- As the driver of the motor vehicle, when required to do so you must demonstrate your permanent place of residence and clarify other aspects affecting taxation.
How do a business vehicle and company vehicle differ from each other?
The temporary tax-exempt use of a company vehicle is not restricted to the performance of work tasks: rather, the vehicle can also be used for personal travel. A business vehicle can only be used to handle work-related tasks.
A motor vehicle registered abroad can be used in business activities
If you live permanently abroad, you can bring a vehicle registered abroad to Finland and use it otherwise than in the company’s entrepreneurial operations in Finland. You can temporarily use a motor vehicle on a tax-exempt basis if you meet the following requirements:
- Your permanent place of residence is abroad. Further information on the definition of a permanent place of residence in the taxation of motor vehicles.
- The company is located elsewhere than in Finland.
- The vehicle is registered abroad.
- The vehicle is used in Finland for a maximum of seven (7) months during a timespan of 12 months. The deadline cannot be extended.
- The vehicle has motor insurance valid in Finland.
In such a case, permission to use the motor vehicle is not required and there is no need to notify the Finnish Tax Administration about it. When required, the driver of the vehicle must be able to indicate his/her permanent place of residence to the Tax Administration and clarify other aspects affecting taxation.
These rules concern an international organisation or other community that uses a motor vehicle in Finland for its own activities.