Taxation


Finland is not a tax paradise but offers competitive corporate taxation (26 %) in the European context. The tax rate on capital income (for example capital gains) of individuals is 28 per cent. Read more about taxation at: www.vero.fi


Tax Office in Rovaniemi

Northern Finland Regional Tax Office
Hallituskatu 3 A,
P.O.Box 8026
96101 Rovaniemi
Tel: 358 16 367 6000


The following text is from Business Guide 2008, produced by Invest in Finland:

Private individuals’ income tax has come closer to the European level in recent years in Finland. And for companies the current 26% corporation tax is among the lowest in Europe. It is paid on annual net profits.

Tax liability and taxes

Taxes in Finland are levied by the central government, local municipalities and the church. For business entities, normal taxes consist of a corporation tax (profit tax) and a real estate tax, and for individual persons, an earned income tax. Other taxes consist of Assets Transfer Tax (former Stamp Duty) and withholding tax, and for individuals, inheritance and net wealth tax. The 22% value-added tax (VAT) is levied on all transactions, with a few exceptions such as food and animal fodder (17%), books, medicines, accommodation, transport of persons, cultural events etc. (8%), and banking, health and educational services (tax-free). Excise taxes are levied on tobacco and alcohol, among other things. There is also a special motor vehicle tax and an environmental tax on energy consumption and certain waste materials.

The Assets Transfer Tax of 1.6% is levied on privately traded shares (0.8% if through the stock exchange). A preliminary tax on an employee’s income is deducted and paid monthly by the employer, who also pays social security and other compulsory premiums. This deduction covers the national income tax (progressive, from 7.5–60% per annum), the municipal income tax (e.g. in Helsinki 17,5%), and the church tax (a flat rate from 1–1.98%, depending on the municipality. The church tax can be waived in cases where the employee is not a member of the Evangelical-Lutheran or Orthodox churches).

Income tax for expats

If a foreign person works in Finland for less than six months, withholding tax of 35% is paid. However, if the employer is a foreign company without a permanent office in Finland and the salary is paid through a bank, taxes are paid in the home country, not in Finland. Key foreign personnel, even if in Finland for longer than six months but not longer than 24 months, also pay the 35% income tax, when their monthly salary exceeds EUR 5882.

Further information:

www.vero.fi
www.enterprisefinland.fi