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Finland - Overview and introduction

Finland - Overview and introduction

Taxation of international executives


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Individuals are classified either as resident or non-resident taxpayers. Individuals resident in Finland are taxed on their worldwide income. A non-resident individual is subject to income tax in Finland only on income from Finnish sources. An individual resident in Finland for only part of a tax year is generally taxable in Finland on their worldwide income only for the period that they were resident. For the portion of the year that they were not resident in Finland, they would be taxable only on any Finnish-source income.

The tax year for individuals is the calendar year.

The official currency of Finland is the Euro (EUR).

Income tax is calculated by applying a progressive state tax rate schedule (maximum 31.25 percent in 2019) and a flat municipal tax rate (varies from municipality to municipality, e.g. in Helsinki 18 percent in 2019) to taxable income. Investment income up to EUR30,000 is taxed at 30 percent and investment income exceeding EUR30,000 is taxed at 34 percent in 2019, church tax and employee’s sickness insurance contribution may be levied in connection with income taxation.

Herein, the host country/territory refers to the country/territory to which the employee is assigned. The home country/territory refers to the country/territory where the assignee lives when they are not on assignment.

All income tax information is summarized by KPMG Oy Ab, the Finnish member firm of KPMG International, based on the Finnish Income Tax Act 1535/1992 and subsequent amendments, the Finnish Tax Adminstration’s web site, Kansainvälisen Verotuksen käsikrirja 2015 (Publication 284.15 of the Finnish Tax Administration), the Finnish Act on Inheritance and Gift Tax (378/1940) and subsequent amendments, the Value Added Tax Act (1501/1993) and subsequent Amendments, the Real Estate Tax Act (654/1992) and subsequent Amendments, the Health Insurance Act (911/2011) and subsequent amendments, the Prepayment Act (1118/1996) and subsequent amendments, Act on the Taxation of Business Profits and Income from Professional Activity (EVL, 360/1968) and subsequent amendments, the Convention implementing the Schengen Agreement on the gradual abolition of controls at common borders (Treaties of Finland 23/2001), the Ailens Act 301/2004 and subsequent amendments and the Finnish Immigration Service’s web site.

© 2020 KPMG Oy Ab, a Finnish limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

KPMG International Cooperative (“KPMG International”) is a Swiss entity.  Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm.

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