European Commission Taxes in Europe Database v2
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Income Tax Act of 30 December 1992 (1535/1992).
Beneficiaries are the State, the municipalities and the local communities of the Evangelical Lutheral 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.
Municipal income tax: individuals and estates of deceased persons who are residents of the municipality in question.
Church tax: individuals who are members of the local communities of the Evangelical Lutheral or the Orthodox Church.
Non‑residents are taxed on the income in Finland according to the Act on Withholding Tax on Non‑residents Income. See "Taxation of non-residents' income".
Church tax: taxpayers are individuals who are members of the local communities of the Evangelical Lutheral or the Orthodox Church.
Finland applies a dual income tax system, where capital (investment) income and earned income are taxed separately. On taxation of capital income see "Personal income tax - Tax on investment income".
Taxable earned income includes wages and salaries (including fringe benefits), pensions, social benefits, unemployment benefits, earned income share of business income and income from agriculture as well as the earned income share of income from partnerships, the earned income share of dividends distributed by non- listed companies, scholarships and awards, royalties and other similar remuneration in respect of copyright, if these rights are a consequence of the taxpayer's own activity, and 80 % of the distributions from employee investment funds.
Interests mentioned above are taxed under Withholding tax at source on interest.
There is a standard lump sum deduction of EUR 620 for professional expenses. Professional expenses exceeding the standard deduction are also deductable on application.
There is also a deduction of 250 €/month for a rented flat that enables a taxpayer to reach his regular place of work.
Deductable from earned income tax base are all expenses incurred in aquiring and maintaining chargeable income (natural deductions).
Also deductible are employees' obligatory pension insurance contribution, unemployment insurance contribution and health insurance contribution for daily allowance.
Travelling expenses from the place of residence to the place of employment using the cheapest means of transportation are deductable in excess of EUR 750 up to a maximum deduction of EUR 7,000.
Interest on mortgages is deductible from capital income.
Deficit in the category of capital income is also deductible from earned income tax, up to a maximum of EUR 1,400.
State income tax
There is a pension income allowance, deductions granted to sailors and forestry workers and a discretionary allowance for circumstantial incapacity to pay taxes.
Municipal income tax and Church tax
The basic allowance is granted on the basis of taxable income remaining after the other allowances in municipal taxation have been subtracted. The maximum amount, EUR 2,970, is reduced by 18 % of income exceeding EUR 2,970.
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:
Deficit in the category of capital income is deductible from earned income tax, up to a maximum of EUR 1,400.
Losses in the category of earned income are deductible from the earned income during the 10 years following the tax year.
Deficit in the category of investment income is also deductible from earned income tax, up to a maximum of EUR 1,400.
Exempted from income tax are certain pensions and social benefits, inheritances and gifts, amounts received as maintenance for a child, major national and international awards, most scholarships, most part of income derived by a resident individual from employment abroad lasting at least six months, certain compensation for specific expenses paid to persons serving at Finnish diplomatic missions or consular posts, indemnification in certain cases, daily allowances and travelling allowances, certain benefits provided by the employer for the personnel, income from certain natural products.
Interest from bank accounts, deposits and certain bonds ia taxed under Withholding tax at source on interest. For taxation of for example capital gains and rental income, see "Personal income tax - Tax on invesment income".
Above is the State income tax scale. Municipal income and church taxes are levied at flat rates.
In 2015, the municipal income tax rate varies between 16.50 and 22.50% according to the municipality, with a weighted average of 19.84%.
In 2015, the church tax rate varies between 1.00 and 2.00% according to the municipality, with an average of 1.43%.
There is an additional tax of 6 %-points on pension income exceeding 45,000.00 EUR. The tax is in force since 2013.
Withholding tax on dividends from non-listed companies is 7.50 % and on dividends exceeding 150,000.00 EUR 27.00 %.
Withholding tax is 25.50 % for dividends from listed companies.
The employer, or any other person or agency paying a salary or other income or benefit is obliged to withhold an advance payment on salaries, wages and other sums paid.
Partnerships are not taxed separately. Their income is divided among the partners and is taxed as their personal income.
Income spreading is applied in certain cases.
Tax revenue includes revenue from state income tax, municipal income tax and church tax.
In 2012 the revenue from these taxes was:
