Tax In Finland

A Contractor's Guide to Taxes : 

One of the most consistently challenging aspects of contracting in Finland is complying with the country’s tax system. As well as paying tax in Finland, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.

How do I calculate my taxable income: 

If you’re working in Finland under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Finland for you and then send you a net wage. Your income tax, public health insurance, social security and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Finland, but contractors may not be offered this service because of their short stay with each employer.

Anybody who can’t pay their tax in Finland through PAYE is left with the prospect doing everything themselves.

Do you know much about Finnish Tax Law? Does Finland have a tax treaty with your home country? You will need to find out or find someone who can help! Income tax in Finland can range from 6.25 to 31.5 percent, and you need to be sure you are placed in the correct tax brackets.

Tax Calculator: 

If you are a contractor and want a calculation on your tax and net retention in Finland, we can supply it to you free of charge.

Using an Umbrella Company for Income Tax : 

Contractors in Finland are faced with masses of paperwork and numerous wasted hours filing a tax return unless they find an alternative option. A Finnish umbrella company can act as your employer during your stay in the country whilst still allowing you the freedom of a contractor. The only difference is that you submit your timesheets to them; they’ll calculate and pay your taxes as you earn, and then you receive a net wage (as well as documentation for your records).

The companies are experts in Finnish taxation, and they’ll ensure that you keep the largest proportion of your earnings whilst complying with local laws. They can deal with any issues with the Finnish tax office or tax department directly including processing your tax refund if you are eligible.

How We Can Help You with Tax: 

We work with numerous umbrella companies in Finland, many of whom are experts in tax and immigration laws. If you have any questions about tax in Finland, we’ll get the answers from them directly so you can rest assured you’ll be getting accurate information. We have comprehensive knowledge of the different services they provide, and can help you find the right company to handle your income tax. We help oil and gas workers, software developers, IT project managers, testers, business analysts and telecommunications contractors get tax efficient payments and sponsorship for their Finnish work permit.

Our advice is 100 percent free, and comes with no obligations. You will be paying taxes in Finland but without the overhead of directly dealing with the Finnish tax authorities. Get in touch with us today for some reliable advice on tax in Finland!

When Do You Need to Lodge Your Tax Return?: 
Specified on pre-completed tax return (9 May or 16 May in 2017)
Tax Filing Deadline : 
Specified on pre-completed tax return (9 May or 16 May in 2017)
Can you file it online? : 
Yes, https://www.vero.fi/en/e-file/tax-return-on-the-web/
Currency: 
Euro (EUR)
Tax-free Threshold in: 
None
Grossed Income: 
16,900-25,300
Tax Rate: 
EUR8 + 6.25% on excess
Grossed Income: 
>25,300-40,800
Tax Rate: 
EUR533 + 17.5% on excess
Grossed Income: 
>40,800-72,300
Tax Rate: 
EUR3,315 + 21.5% on excess
Grossed Income: 
>72,300
Tax Rate: 
EUR10,174 + 31.5% on excess
How long does it take to set up: 
3 days
How much does it cost: 
EUR330 – EUR380
Is it easy? : 
Starting a Business Rank: 26/190 (Source: World Bank)
How to File Taxes in: 

You will receive your pre-completed tax return in March or April. If it is complete and accurate, you are not required to take any further action. If you do need to make changes, you can do so either online, or on paper.

The deadline for submitting corrections is printed on page 1 of your tax return.

Filing Taxes Online

You can make changes to your pre-completed tax return and file taxes online, via this link. The e-Service will guide you through the process, which generally involves 3 steps: (1) entering personal details, (2) entering details and information for taxation, and (3) submitting your tax return. You can access a Demo here .

Filing Taxes on Paper

You may choose to enter your corrections on your pre-completed tax return, and send them to the tax administration. A detailed guide on how to fill your Pre-Completed Tax Return (form 3001e) can be found here.

Use the prepaid envelope to mail your completed and corrected form(s).

If you correct/add something, or the tax administration receives new information from third parties, you will receive a new, revised Tax Assessment Decision, Notice and Bank forms by the end of October.

No new Decision and Notice of Assessment will be sent if the corrections have no impact on your actual tax liability.

Notes: 

The progressive tax rates above apply to resident taxpayers. Municipal, church and public broadcasting taxes do not apply to non-resident taxpayers.

Municipal Tax: Municipal tax is levied at a flat rate between 17 and 22.5%, depending on the municipality.

Church tax: Church tax is levied at a flat rate between 1 and 2.2%, on the communities of the Evangelical-Lutheran and Orthodox churches.

Yle vero (Public Broadcasting Tax): This tax was introduced on 1 January 2013, and the maximum annual amount is EUR143 per person.

Non-Residents: Non-residents are subject to a flat tax rate of 35% on employment income. A deduction of EUR510 per month or EUR17 per day applies if this is stated in the employee’s tax-at-source card.

Can a Non-Resident Be Taxed at Progressive Tax Rates?

Non-residents may choose to be taxed at progressive rates. If they choose to do so, the progressive tax rate that applies to them is determined by their worldwide income.

Does the 183 day rule apply in: 

Yes

When do you become a tax resident in: 

You become a tax resident in Finland, when you:

  • Have a permanent home or habitual abode in Finland; or
  • Have stayed in the country for a period of more than 6 months (183 days).
Am I taxed on my global income in: 

Residents are taxed on their worldwide income.

Non-residents are taxed on their Finland-sourced income.

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