Finnish Income Tax
Taxable income for non-residents and investment income are subject to tax at flat rates and an employment income for residents and other earned income for both residents and non-residents are subject to both municipal income tax and national income tax.
How does Finnish income tax work?
Earned gross income is taxed by a progressive state tax in Finland. For Finish residents, earned gross income is taxed by a progressive state tax (tax brackets 6.5% – 31.75%) and proportional communal taxes paid to municipalities (16.5% – 22.5%, average 19.17%) and parishes (1.00% – 2.00%, average 1.34%).
|Earned income||Basic tax amount||Tax rate for amounts exceeding the lower limit|
|16,700-25,000 €||8 €||6.5%|
|25,000-40,800 €||547.50 €||17.5%|
|40,800-72,300 €||3,312.50 €||21.5%|
|Over 72,300 €||10,085.50 €||31.75%|
Calculate your net income:
Please note, that this calculation took into a consideration just a very basic pieces of information of yours and the result might vary significantly. Contact us for detailed and precise calculation or let us know by filling a form and will call you back. Contact us for an exact calculation.
Special Expatriate Tax Regime
The temporary expatriate regime providing for flat-rate taxation (35 percent) of employment income received by qualifying foreign specialists and executives is proposed to be extended until 31 December 2019 since currently the regime applies with respect to employment which commences by 31 December 2015. No further changes to qualifications were proposed (including the minimum EUR 5,800 monthly cash salary). The 35-percent flat rate can be applied for a maximum 48 months and also the flat rate of 35% will be granted after the 6-month period. Or it is possible to apply for it before the 6 months by filling in the form attached here.
Foreign Employer Obligations
When the employer of a leased employee is a foreign corporation with no permanent establishment, no subsidiary and no other corporate entity in Finland, it does not have to collect withholding tax in Finland for the Finnish tax authorities. Therefore, the employee himself must make sure that he pays income tax on the wages earned in Finland.
In case of staying for longer than six months (the counting of time is not interrupted if you leave Finland for a short time and come back), you may ask the tax office in order to give you a standard tax card: after Form 5042a completing. A Finnish personal identity code is required. Since the taxation is progressive, the rate of tax is dependent on the total annual gross income and it may vary from 0% to 50%.
On one hand, foreign nationals living and working in Finland for less than six months are classed as tax non-residents. These are only required to pay taxes on Finnish sources of income and capital. In general, income tax is deducted at source at a flat rate of 35%, and there is no need for them to sign a formal tax declaration. However, EU/EEA nationals can request progressive taxation instead of taxation at source if their Finnish income accounts for 75% or more of their annual gross earned income.
On the other hand, anyone living and working in Finland for six months or more is taxed on the same basis as Finnish citizens, is required to submit a Finnish income tax return, and have to pay state and municipal taxes on their world-wide income and capital. The Finnish tax year corresponds to a calendar year.