Taxes in Europe Database v2
Income Tax Act of 30 December 1992 (1535/1992).
The local communities of the Evangelical Lutheran or the Orthodox Church.
In national accounts the church tax is regarded as a transfer from households to non-profit institutions, not as a tax.
Non-residents are taxed on their income in Finland according to the Act on Withholding Tax on Non-Residents Income. See "Taxation of non-residents' income".
Individuals who are members of the local communities of the Evangelical Lutheran or the Orthodox Church.
The church tax is levied on the same taxable income as determined for municipal income tax purposes.
The basic allowance is granted on the basis of taxable income remaining after the other allowances have been subtracted. The maximum amount, EUR 2,250, is reduced by 20 % of income exceeding EUR 2,250.
An earned income allowance is calculated on the basis of taxpayers' income from work. The allowance is 51 % of income between EUR 2,500 and EUR 7,230, and 28 % of income exceeding EUR 7,230, until it reaches its maximum EUR 3,570. The amount of the allowance is reduced by 4.5 % of earned income minus natural deductions exceeding EUR 14,000.
There are also the following allowances:
An earned income tax credit is granted against state income tax on earned income. If the credit exceeds the amount of the state income tax, the excess is credited (proportionally) against municipal tax, church tax and health insurance contribution for medical care. The credit is 5.9 % of income from work exceeding EUR 2,500. The maximum credit is EUR 740. If the taxpayers earned income after natural dedcutions exceeds EUR 33,000, the credit is reduced by 1.2 % of the excess.
See communal tax.
Church tax is levied at flat rates. The rates are set annually in each community by the local ecclesiastical council. In 2011 the rates vary between 1.00 and 2.00 %, with the average being 1.33 %.
Married persons are taxed separately both on earned income and capital income. Minors are taxed on their own income, separate from their parents.
The tax is collected jointly with municipal income tax.
The employer or other payer of benefits and other payments is obliged to withhold an advance payment on salaries, wages and other kinds of income.