# Taxation in Finland

Part of a series on :
Taxation :
An aspect of fiscal policy :
Policies
Economic justice
Government revenue
Property tax equalization
Tax revenue
Non-tax revenue
Tax law
Tax bracket
Flat tax
Tax threshold
Taxation as theft
Tax shift
Tax cut
Tax advantage
Tax incentive
Tax reform
Tax harmonization
Tax competition
Double taxation
Representation
Medical savings account :
Economics
General Theory
Price effect
Excess burden
Tax incidence
Laffer curve
Optimal tax
Fiscal illusion
Theories
Optimal capital income taxation
Distribution of Tax
Tax rate
Flat
Progressive
Regressive
Proportional :
Collection
Revenue service
Revenue stamp
Tax assessment
Taxable income
Tax lien
Tax refund
Tax shield
Tax residence
Tax preparation
Tax protester
Tax investigation
Tax collector
Tax withholding
Private tax collection :
Noncompliance
Legal tax avoidance
Base erosion and profit shifting (BEPS)
Double Irish
Single Malt
CAIA
Dutch Sandwich
Tax credit
Tax deduction
Tax exemption
Taxpayer groups
Tax holiday
Tax inversion
Tax farming
Repatriation tax avoidance
Tax patent
Tax shelter
Illegal tax evasion
Tax amnesty
Black market
Debtors' prison
Tax exile
Smuggling
Tax resistance
Transfer mispricing
Unreported employment
Locations
Tax havens
Corporate havens
Offshore financial centres (OFCs)
Offshore magic circle
Conduit and sink OFCs
Financial centres
Financial Secrecy Index
Major examples
Ireland as a tax haven
Ireland v. Commission
Leprechaun economics
Liechtenstein tax affair
Luxembourg Leaks
Offshore Leaks
Paradise Papers
Panama Papers
Swiss Leaks
United States as a tax haven
Panama as a tax haven :
Types
Direct
Indirect
Per unit
Ad valorem
Aviation
Airport improvement
Landing
Solidarity
Capital gains
Expatriation
Consumption
Departure
Hotel
Sales
Stamp
Television
Tourist
Value-added
Dividend
Environmental tax
Carbon
Eco-tariff
Landfill
Natural resources consumption
Severance
Steering
Stumpage
Excise
Alcohol
Cigarette
Fat
Meat
Sin
Sugary drink
Tobacco
General
Georgist
Gift
Gross receipts
Hypothecated
Income
Inheritance (estate)
Land value
Luxury
Payroll
Pigouvian
Property
Resource rent
Single
Surtax
Turnover
Use
User charge/fee
Congestion
Fuel
Road/GNSS
Toll
Vehicle miles traveled
Corporate profit
Excess profits
Windfall
Negative (income)
Wealth :
International
Financial transaction tax
ATTAC
Currency transaction tax
European Union Common Consolidated Corporate Tax Base (CCCTB)
Global minimum corporate tax rate
Robin Hood tax
Tobin tax
Spahn tax
Tax equalization
Tax treaty
Exchange of Information
Permanent establishment
Transfer pricing
European Union FTT
Foreign revenue rule :
Trade
Custom
Duty
Tariff
Import
Export
Tariff war
Free trade
Free-trade zone
Trade agreement
ATA Carnet :
Research
Academic
Mihir A. Desai
Dhammika Dharmapala
James R. Hines Jr.
Ronen Palan
Joel Slemrod
Gabriel Zucman
Advocacy groups
Institute on Taxation and Economic Policy (ITEP)
Oxfam (UK)
Tax Foundation (US)
Tax Justice Network (TJN)
Tax Policy Center (US) :
Religious
Church tax
Eight per thousand
Teind
Tithe
Fiscus Judaicus
Leibzoll
Temple tax
Tolerance tax
Jizya
Kharaj
Khums
Nisab
Zakat :
By country
All Countries
List of countries by tax rates
Tax revenue to GDP ratio
Tax rates in Europe
Individual Countries
Albania
Algeria
Argentina
Armenia
Australia
Azerbaijan
Bangladesh
Bhutan
Brazil
Bulgaria
BVI
Canada
China
Colombia
Croatia
Denmark
Finland
France
Germany
Greece
Hong Kong
Iceland
India
Indonesia
Iran
Ireland
Israel
Italy
Japan
Kazakhstan
Lithuania
Malta
Morocco
Namibia
Netherlands
New Zealand
Norway
Pakistan
Palestine
Peru
Philippines
Poland
Portugal
Russia
South Africa
Sri Lanka
Sweden
Switzerland
Taiwan
Tanzania
United Arab Emirates
United Kingdom
United States
Uruguay :
Business portal
Money portal :
vte :
Taxation in Finland is mainly carried out through the Finnish Tax Administration, an agency of the Ministry of Finance. Finnish Customs, the Finnish Transport and Communications Agency Traficom, and pension funds also collect taxes. Taxes collected are distributed to the Government, municipalities, church, and the Social Insurance Institution (Kela).
The taxes can be broadly divided into four types:
* progressive state income tax
* other (mostly) flat-rate income taxes
* flat-rate property tax
* flat-rate consumption and property transfer taxes

## Taxes on income

Income (tulo) is categorized in Finnish tax law as either earned income (ansiotulo) or capital income (pääomatulo), essentially by stating that earned income is any salary paid in compensation for employment and "any income other than capital income". In general, as a tax is any compulsory financial charge levied on a taxpayer by a governmental organisation, all the payments listed here are taken into account as taxes.

### Taxes on earned income

Income taxation takes place in a series of phases where the proportional taxes are deducted from the gross income before the net income subject to the state income tax is determined. An employee's gross earned income is subject to the three following, proportional social security contributions:
* employee's pension insurance fee (työeläkevakuutusmaksu), paid to a pension insurance company
* employee's unemployment insurance fee (työttömyysvakuutusmaksu), paid to the state
* health insurance daily allowance contribution (sairausvakuutuksen päivärahamaksu), paid to the state
The net earned income (gross earned income minus deductions) is subject to:
* income tax (tulovero) which is divided into
** a tax, progressively paid to the state (state income tax)
** a tax, proportionally paid to the municipality (municipal tax)
** a church tax, proportionally paid to the parish (kirkollisvero) if the person is a member thereof
* proportional health insurance medical expenses contribution (sairausvakuutuksen sairaanhoitomaksu), paid to the state
* proportional Yle tax (yleisradiovero), paid to the state and collected to fund the public broadcasting company
There is an automatic earned income tax credit (työtulovähennys) for some taxes and fees, making them slightly progressive despite their fixed rate.

#### Pension insurance fees

Every person that is 17–68 years of age and gets a salary as an employee pays a certain amount of pension insurance fee on their gross income. The exact percentage is set annually by a decree of the Ministry of Social Affairs and Health.
* The employee's fee is 7.15% in 2025.
* The employer's average is 17.38% on the average in 2025.
The voluntary pension insurance fees or transfers to a personal pension account are credited in earned income taxation up to €5,000 per year. The Finnish system does not provide for voluntary contributions or employer matching.

#### Unemployment insurance fees

Every person 18–65 years of age working as an employee in Finland is required to pay unemployment insurance fee on their gross work income. The employee's fee is levied on their gross work income. The employer's fee is proportionate to what they pay to all their employees and it is not withheld from the employees' gross salaries – in effect, it is paid out of the employer's assets. The exact percentages of the fees are set by law to a level that secures the Employment Fund's (Työllisyysrahasto) ability to pay out unemployment benefits, and in 2025 the fees are as follows:
* The employee's fee is 0.59%.
* The employer's fee is 0.20% for salaries up to €2,455,500 and 0.80% above that.

#### Health insurance daily allowance contribution

Every person who is 16–68 years of age and works as an employee in Finland is required to pay the health insurance daily allowance contribution on their gross earned income. The rate of the fee is annually set by a law, and it is set to a level that secures funding for healthcare costs.
In 2025, the rate is 0.84% and it is levied on the entire gross earned income if equals to or exceeds €16,862.

#### State income tax

The following contributions are deducted from the gross income before determining the net income subject to the state income tax:
* natural deductions:
** automatic income-production deduction (tulonhankkimisvähennys); €750 in 2025
** trade union membership fees
** expenses for the production of income (tulonhankkimismenot); all costs above the automatic income-production deduction
* other deductions:
** employee's pension insurance fee
** employee's unemployment insurance fee
** health insurance daily allowance contribution
** automatic basic deduction (perusvähennys); maximum of €4,115 (decreases the more the gross income gets, down to €0)
The following progressive rates are levied on the net income (rates for 2025):
| Net Income Over | Tax Rate |
| €0 | 12.64% |
| €21,200 | 19% |
| €31,500 | 30.25% |
| €52,100 | 34% |
| €88,200 | 41.75% |
| €150,000 | 44.25% |
The gross state income tax is subject to following credits:
* several credits, e.g. household expenses credit (kotitalousvähennys); all costs above €150 (maximum €1,600) in 2025
* automatic earned income tax credit; maximum of €3,225 in 2025 (decreases the more the gross income gets, down to €0)
The other credits are first subtracted from the gross tax before deducting the earned income tax credit (työtulovähennys). If there is any earned income tax credit left after deducting it from the gross state income tax, the remainder is subtracted from the gross municipal tax, gross health insurance medical expenses contribution, and gross church tax, proportionally.

#### Municipal tax

The following contributions are deducted from the gross income before determining the net income subject to the municipal tax:
* natural deductions:
** automatic income-production deduction; €750 in 2025
** trade union membership fees
** expenses for the production of income; all costs above the automatic income-production deduction
* other deductions:
** employee's pension insurance fee
** employee's unemployment insurance fee
** health insurance daily allowance contribution
** automatic basic deduction; maximum of €4,115 (decreases the more the gross income gets, down to €0)
The municipal tax is levied on the net income. The rate is set by the municipality and in 2025, it ranges from 4.7% (Kauniainen) to 19.7% (Kökar) and averages at 9.28%. If there is any earned income tax credit left (after deducting it from the state income tax), the remainder is subtracted from the gross municipal tax, proportionally to its share in the sum of the gross municipal tax, gross health insurance medical expenses contribution, and gross church tax.

#### Health insurance medical expenses contribution

The following contributions are deducted from the gross income before determining the net income subject to the medical expenses contribution:
* natural deductions:
** automatic income-production deduction; €750 in 2025
** trade union membership fees
** expenses for the production of income; all costs above the automatic income-production deduction
* other deductions:
** employee's pension insurance fee
** employee's unemployment insurance fee
** health insurance daily allowance contribution
** automatic basic deduction; maximum of €4,115 (decreases the more the gross income gets, down to €0)
The medical expenses contribution (1.06% in 2025) is levied on the net income. If there is any earned income tax credit left (after deducting it from the state income tax), the remainder is subtracted from the gross medical expenses contribution, proportionally to its share in the sum of the gross municipal tax, gross medical expenses contribution, and gross church tax.

#### Church tax

If the individual is a member of the Evangelical Lutheran or the Orthodox Church, or any of the country-wide Lutheran parishes (the German parish in Finland and Olaus Petri parish for citizens of Sweden living in Finland), their net earned income is subject to the church tax (kirkollisvero). The following contributions are deducted from the gross income before determining the net income subject to the church tax:
* natural deductions:
** automatic income-production deduction; €750 in 2025
** trade union membership fees
** expenses for the production of income; all costs above the automatic income-production deduction
* other deductions:
** employee's pension insurance fee
** employee's unemployment insurance fee
** health insurance daily allowance contribution
** automatic basic deduction; maximum of €4,115 (decreases the more the gross income gets, down to €0)
The church tax is levied on the net income. If there are multiple parishes in one municipality, the rate is set equally for the entire municipality by the parish union (seurakuntayhtymä) that represents all of the parishes, otherwise the rate is set by one individual parish for one municipality. In 2025, the rate in Evangelical Lutheran parishes ranges from 1.0% to 2.0%. In the same year, the rate in Orthodox parishes ranges from 1.75% to 2.25%. If there is any earned income tax credit left (after deducting it from the state income tax), the remainder is subtracted from the gross church tax, proportionally to its share in the sum of the gross municipal tax, gross health insurance medical expenses contribution, and gross church tax.

#### Yle tax

The following deductions are made on the gross income before determining the net income subject to the Yle tax:
* automatic income-production deduction; €750 in 2025
* trade union membership fees
* expenses for the production of income; all costs above the automatic income-production deduction
The Yle tax (2.5%) is levied on the net income above €15,150. However, the maximum tax is €160.

#### Collection of taxes on earned income

The employer withholds the employee's pension insurance and unemployment insurance fees from each gross paycheck. The employer is responsible for choosing the pension insurance institution and pays the fee to the institution in conjunction with paying the salary to their employee. The pension insurance fees withheld by public-sector employers are paid to the dedicated agency Keva.
The employer withholds another portion of each paycheck and pays that to the Finnish Tax Administration. That portion is officially termed as a withholding tax (Finnish: ennakonpidätys, Swedish: förskottsinnehållning) and it adds up to the total of the following liabilities:
* health insurance daily allowance contribution
* state income tax
* municipal tax
* health insurance medical expenses contribution
* church tax
* Yle tax
The withholding percentage is rounded up to the nearest 0.5 percentage points. After the fiscal year (calendar year) has ended, the administration pays the difference between tax liability and withheld taxes as a rebate or collects as tax arrears afterward. The decision is sent to the taxpayer between May and October the following year. Tax rebates, if any, are typically paid approximately two months following.

### Taxation of non-residents

Anyone who has arrived in Finland and stayed longer than 6 months will become, from Tax Administrator's view, a resident. The residents' worldwide income is subject to Finnish tax, so that no distinction exists between the source country. Non-residents are subjected only to taxation of Finnish-sourced income.

#### ID number and tax number

Persons working in Finland for a short period can get their Finnish personal ID at the tax office. The Finnish Tax Administration is entitled to enter information into the Population Register System and distribute identity codes jointly with Local Register Offices if the matter concerns foreigners who arrive for temporary periods, i.e. less than one year to work in Finland. ID requires following information entered to the system: Full name, Date of birth, Sex, Place of birth, Address, Citizenship, Native language and Occupation.
In association of measures against grey economy in the construction industry, a new act governing the mandatory tax numbers and the public register of tax numbers was adopted in 2012. At the moment mandatory Tax Numbers are issued for construction-industry workers only. The Individual Tax Number does not reveal the individual's age, sex or date of birth. The number doesn't change when a worker moves on to work for another employer or to work at another construction site.

#### Source tax for foreign employees with special expertise

Some foreign employees pay a flat-rate source tax of 32% on their net income instead of the regular progressive state income taxes, other taxes, and social security contributions. The source tax is applied to a foreign employee under the following conditions:
* the individual becomes resident in Finland at the beginning of the period of employment to which the Act applies
* the monetary salary for this employment is at least €5,800 a month during the total period of employment to which the Act applies
* their tasks require special expertise
* they are not a Finnish citizen and they have not been tax-liable in Finland in the five years preceding the year in which this employment began
A person is liable to pay the source tax for a maximum of 7 years from the beginning of the employment.

#### European Union officials

Salaries or grants paid by the European Union bodies, such as European Chemicals Agency in Helsinki, are tax-free in Finland and do not need to be reported to the Finnish Tax Administration or Finnish social security, regardless of residency. Instead, the EU officials pay an EU-wide European tax on their salary. Employees of European Union bodies may bring a car to Finland without paying the Finnish car tax.

### Taxes on capital income

Dividends, rents, and other kinds of capital gains are considered capital income (pääomatulo). Net capital income is taxed at a fixed rate of 30% for net income up to €30,000 and 34% for net income above that. However, different types of capital income are treated with different deduction schemes that may render the effective rates much lower. Only natural persons pay capital income tax.

#### Dividends from listed companies

The proportion of dividends from a listed (publicly traded) company subject to capital income tax depends on whether the share is owned via a book-entry account (arvo-osuustili) or an equity savings account (osakesäästötili). Via an equity savings account, one can own only shares of listed companies and the owner can be only a natural person.

##### Shares owned via a book-entry account

15% of dividends from listed companies to a private person are tax-exempt if the shares are owned via a book-entry account and the rest is subject to the capital income tax.

##### Shares owned via an equity savings account

The entire dividend from a listed company to a private person is subject to the capital income tax if the share is owned via an equity savings account. The value of the account is considered to be the liquid money on the account and the market price of the shares that have been bought with the money deposited on the account. The dividends are deposited to the account and the owner can buy and sell shares with the assets of the account. If the owner withdraws money from the account at a moment when the account has surplus value (i.e. the value exceeds what have been deposited there), the profit withdrawn is proportionate to the withdrawal's proportion of the entire value of the account. The profit withdrawn is entirely subject to the capital income tax. There are no expenses deductible from capital income when the account is active—the losses are deductible only when the account is closed with losses and the money is withdrawn.

#### Dividends from unlisted companies

If the dividend from an unlisted company paid to a natural person adds up to 8% or less of the mathematical value (net assets) of the company, 75% of the dividend is tax-exempt and the rest is subject to the capital income tax (30% or 34%), rendering effectively a 7.5% capital income tax rate at minimum. If the dividend to that person adds up to more than 8% of the net assets of the company:
* 75% of the dividend up to the 8% threshold is tax-exempt and the rest of the dividend up to the threshold is subject to the capital income tax (30% or 34%); and
* 25% of the dividend above the 8% threshold is tax-exempt and the rest of the dividend above the threshold is considered earned income and therefore added to the net earned income from any other sources and the sum is subject to the progressive state income tax rate
If the person's all dividends from unlisted companies add up to more than €150,000, 85% the sum above the €150,000 is subject to the capital income tax and the rest is tax-exempt.

### Taxes on corporate income

The corporate income tax rate is 20%. Corporate tax was lowered from 24.5% to 20.0% in January 2014.
Until 2016, a small percentage of corporate taxes was also distributed to parishes, regardless of the corporations' religious affiliations. From 2016 onwards, the direct tax distribution was abolished and it was replaced by a fixed annual state subsidy that is €105-million in 2025 follows the Finnish Consumer Price Index.

### Debate on the total tax burden on labour

The "gross salary" as reported to the employee conventionally does not include any of the taxes paid by the employer, which is a substantial portion of all taxes collected by the state, municipalities and pension insurance companies. Therefore, there are two viewpoints on what is the effective tax rate:
* One viewpoint where one takes into account only what is withheld from income – (employee's) pension insurance fees and unemployment insurance fees, health insurance daily allowance contributions, state income taxes, municipal taxes, church taxes, Yle taxes, and health insurance medical expenses contributions.
* One viewpoint where one takes into account both what is withheld from income (all those above-mentioned) and what is withheld from the one who pays that income – employer's pension and unemployment insurance fees, accident insurance fees etc.

## Other kinds of taxes
### Property tax

Municipalities collect property tax (kiinteistövero) on properties located in their territory. The tax is levied separately on the soil (maapohja) and on the buildings located on it. The tax on the soil is paid by the owner of the property and the tax on the buildings is paid by the owner of the building. The tax on soil is generally 1.30–2.00%, but the municipality can set it at 2.00–6.00%, if the property is undeveloped and certain legal requirements are met. Additionally, if the property is located in Espoo, Helsinki, Hyvinkää, Järvenpää, Kauniainen, Kerava, Kirkkonummi, Mäntsälä, Nurmijärvi, Pornainen, Sipoo, Tuusula, Vantaa, or Vihti, the Property Tax Act requires that the soil tax for undeveloped property is 3.00 p.p. higher than for developed property, but 6.00% at maximum. The tax on buildings is 0.41–1.00% for permanently residential buildings and 0.93–2.00% for buildings with at least 50% of the space reserved for non-permanent residence. Property taxes are levied annually on present market value.

### Property transfer tax

There is a 3% property transfer tax (varainsiirtovero) for property, and 1.5% for stock and housing cooperative shares. First-time home buyers were exempt from transfer tax until 31 December 2023, but no longer enjoy exemption.

### Consumption taxes

Value-added tax (arvonlisävero) is levied at a standard rate of 25.5% (as of 1 September 2025), and at two reduced rates of 14% on food, restaurant services, catering services and animal feed, and 10% on books, pharmaceutical products, services creating opportunities for physical exercise, passenger transportation and accommodation.
Excise taxes (valmistevero) are in place for alcohol, tobacco, sweets, lotteries, insurances, transport fuels and automobiles (2011). The motor vehicle tax is substantial. As a rule, permanent residents cannot drive foreign-registered cars in Finland. Persons with permanent residence outside Finland may drive foreign-registered car in Finland for six months, or up to 18 months if residence abroad is separately proven to Customs. As an exception, European Civil Service employees working for the European Union are exempt from the car tax for their personal vehicle.
Pharmacies pay only the excise tax from their yearly income. There is a tax credit for pharmacies that keep subsidiary pharmacies (sivuapteekki). The aim of this policy is to support keeping pharmacies in sparsely populated regions.

## Publicity of income taxes

Even when information of earnings and the taxation procedure of individual persons and companies are not public, the amount of taxes carried for each person and company is public information. Tax Administration authority is required to submit information for free if request is targeted. Larger records are submitted for journalistic purposes. Capital income and earned income are both public information, while taxation of dividends from unlisted limited company is not.

## Investment of pension funds

In 2014, Finnwatch estimated that 60–70% (€37 billion) of Finnish pension funds were invested in tax havens. Political parties have different agendas in respect to tax havens.