Taxation in Finland, as in all Nordic countries, can be steep (up to 42% of your income in total, if you add social security and insurance contributions). However, it’s also fair and the way it’s structured actually gives expats the ability to not pay taxes right away. Add that to the fact that you don’t really have to do anything manually, since the taxes are deducted directly from your salary each month, and you probably won’t be complaining at the end of each month.
First things first: You need a tax card -- which you can request online at the Tax Administration website. Since taxation is deducted directly from your salary, this tax card will let your employer know how much tax to withhold each month (which you can also figure out using the Tax calculator tool). At the beginning of each year, in January, you'll get a new tax card by mail, but if your income changes during that year, you can simply print out a new one from the Tax Administration website.
The 6-month taxation window
How much tax you actually pay depends on how long you plan on staying in Finland and whether the company you're working for is a Finnish one or not. If you're staying for less than six months and working for a non-Finnish company, then you don't need to pay any taxes at all but you will be required to pay taxes in your home country. If you're working for a Finnish company, then 35% of your salary will be automatically deducted for tax, along with a 7% towards social security and insurance contributions (that you can avoid if you're insured back in your home country and provide an E101 form). Once you've completed your employment period, your employer needs to provide you with a document that shows the exact amount you've earned and the exact amount you've paid in taxes, which you can use when you do your taxes back in your home country.
If you plan on staying for more than six months, then you'll need to pay taxes regardless of where your company is based. Be aware that income tax in Finland is progressive, especially when it comes to capital gains tax. Which means that the more you gain, the higher your tax rate is going to be. The capital gains rate in 2017 is 30% for income up to â¬30,000 and 34% for capital income exceeding that amount. Apart from direct taxes, there's also a municipal tax (between 16% and 21%), a church tax (between 1% and 2.25%) and your social security and insurance contributions (7%).
Tax Returns
Things are very simple when it comes to annual tax returns as well. You'll simply receive them via mail every year, and they arrive pre-completed, based on the information supplied to the Tax Administration by your employer. So all you need to do is inspect them, and if you agree with the quoted amount then you don't have to take any further action. If you think a revision is needed, you can simply correct the form and send it back to the Tax Administration by the date that's indicated on the form. Just make sure to do that on time, because there will be a fine otherwise.
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