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Generic Tax Name Withholding tax for foreign employees
Tax name in the national language Ulkomailta tulevan palkansaajan lähdevero/Källskatt för löntagare från utlandet
Tax name in English Withholding tax for foreign employees
Member State FI-Finland
Tax in force since 1995/12/18
If abolished, date on which the tax ceases to apply
Business version date 2015/01/01
Version date 2015/06/25
This file was last updated on

Type of tax
Direct taxes Personal income tax
Corporate income tax
Other
Indirect taxes VAT
Excise duty (EU harmonised)
Alcoholic beverages
Energy products and electricity
Manufactured tobacco
Other
Social security contribution Employers
Employees
Other
 
Legal base

The Act on Withholding Tax for Foreign Employees of 18 December 1995 (1551/1995).
 
Who sets
The tax rate is set by



The tax base is set by



The reliefs are set by




Comments
 
Beneficiary





Comments

 
Geographical Scope

 
Taxpayers
Domestic-source income of non-residents is Taxed
Not Taxed
Comments
Employment incomes of married couples are Taxed jointly
Taxed separately
Comments

Comments

Foreign employees under the following conditions:

1.the individual becomes resident in Finland at the beginning of the employment to which the Act is applied;

2.the monthly salary is at least € 5,800, during the whole period of employment;

3.the work requires special expertise;

4.he is not a Finnish national and he has not been resident in Finland during five years preceding the year of beginning of the employment to which the Act is applied.

If the individual works as teacher in a Finnish university or other establishment for higher education or if he pursues scientific research for the public good and not for a private purpose the conditions set out in items 2 and 3 are not applied.

A taxpayer is deemed to be a foreign employee 48 months at the maximum calculated from the beginning of the employment to which the Act is applied and as long as the employment is not interrupted.
 
Tax object and basis of assessment
As general rule, taxable income under personal income tax includes























Comments
Income considered Domestic income
Worldwide income (subject to double-tax relief)
Comments
Benefits in kind
The following benefits in kind are usually (partially or fully) taxable












Comments

Comments

The monthly salary of a foreign employee.
 
Deductions, Allowances, Credits, Exemptions
Deduction for professional expenses.
The deduction is:





Comments
Deductions from the tax base
The following items are usually (partially or fully) deductible

















Comments
Allowances
The basic yearly allowance for an individual amounts to:
The basic yearly allowance for a couple amounts to:
Additional allowance for 1st child
Additional allowance for 2nd child
Additional allowance for 3rd child
Additional allowance for additional child
Additional allowance for old age dependents
Comments
Credits
The basic yearly credit for an individual amounts to:
The basic yearly credit for a couple amounts to:
Additional credit for 1st child
Additional credit for 2nd child
Additional credit for 3rd child
Additional credit for additional child
Additional credit for old age dependents
There are tax credits for:

















Comments
Losses
Losses can be
Carried-forward for Indefinite
 Years
Carried-back for Indefinite
 Years
Transferred to spouse or partner
Comments
Exemptions
The following income is exempted from income tax























Comments

Comments

 
Rate(s) Structure
The following personal income tax rates apply to aggregate annual income (allowances not included)
Bracket 1 From   EUR/Natcur
To   EUR/Natcur
Rate:
Comments
Regional taxes
Regional taxes are (rate in capital region) A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments
Local/municipal taxes
Local taxes are (rate in capital city) A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments
Special surcharges
There are special surcharges in the form of:
Surcharge 1 : Name:
A lump-sum amount:
A percentage of income:
A tax surcharge:
Comments
Separate taxation
Separate taxation applies to the following items: Employment income
Income from business or self-employed activities
Income from sport and entertainment activities
Benefits in kind (company car, meal cheques, etc)
Pension income
Owner-occupied immovable property
Dividends
Interests from government bonds
Interests from corporate bonds
Interests from special saving accounts
Interests from deposits
Royalties
Income from renting immovable property
Income from renting movable property
Capital gains on immovable property
Capital gains on movable property
Inheritance
Annuities from life insurance
Prizes and awards
Scholarships
Income from occasional activities
Revenues from donations and gifts
Revenues from lotteries and games activities
Comments
Withholding taxes
The tax is withheld when paid to residents on: Dividends:
Final Creditable
Interests from governments bonds:
Final Creditable
Interests from corporate bonds:
Final Creditable
Interests from special saving accounts:
Final Creditable
Interests from deposits:
Final Creditable
Comments

Comments

Rate: 35.00%
 
Tax due date

 
Tax collector

By withholding.
 
Special features

This tax regime is applied to employment that began in 1996-2015 In order to be taxed under the Act on Withholding Tax on Foreign Employees a foreign employee must file an application within 90 days from the beginning of the employment at the latest. If withholding tax has been levied, although the conditions for its application have not been fulfilled, ordinary assessment is applied to the total period of employment. The withholding tax levied will be set off against the taxes otherwise due.

In the taxation of other earned income the income subject to withholding tax is added to the other earned income. Allowances which are deducted after deducting expenses incurred in acquiring and maintaining earned income are made from this aggregate amount. The income tax is then calculated on the basis of the subsequent aggregate amount. The tax that corresponds to the relation of other earned income to the aggregate amount is deemed to be tax on other earned income. In calculating this relation allowances which are deducted after deducting expenses incurred in acquiring and maintaining earned income are not taken into account.
 
Economic function







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Environmental taxes



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Tax revenue
ESA95 code d51ma (d51a + d51c1)

Year
Annual tax revenue (millions)
Currency
Tax revenue as % of GDP
Tax revenue as % of total tax revenue
2012 28.30 EUR 0.01
2011 29.30 EUR 0.01
2010 26.00 EUR 0.01
2009 22.00 EUR 0.01
2008 18.00 EUR 0.01
2007 16.00 EUR 0.01
2006 13.00 EUR 0.01
2005 9.00 EUR 0.01
2004 7.00 EUR 0.00
2003 3.00 EUR 0.00
2002 2.00 EUR 0.00

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