TAXATIONIN FINLAND
Corporate taxation in Finland
For businesses, taxes comprise acorporation tax (profit tax) and a realestate tax. Corporation tax is paid on
annual taxable income minus tax-deductible expenses and losses. Corporate tax
rate is 20% in Finland. Other taxes
consist of an assets transfer tax (formerly stamp duty) and a withholding tax. The
employers are also required to make asocial security contribution.

Value added tax (VAT)
VAT is an indirect tax assessed as apercentage of the value of all goods andservices, unless specifi cally exempted. Itis a consumption tax paid by the end
consumer. VAT-registered businesses candeduct VAT paid on purchases forbusiness activities from their VAT

liability. The Finnish acronym for VAT is
ALV (arvonlisävero).

Taxation for individuals in Finland
Individuals pay a progressive income tax
from their salaries. Foreign personnel
working in Finland for longer than asix-month period are also required to pay
Finnish income tax. If a foreign person
works in Finland for less than six months,
withholding tax of 35% is paid. If theemployer is a foreign company without apermanent office in Finland and the salaryis paid through a bank, taxes are paid in
the home country, not in Finland. Key
foreign personnel, even if in Finland forlonger than six months but not longer
than 24 months, also may pay the 35%
income tax, when their monthly salary
exceeds € 5800.

A preliminary tax on an employee’s income
is deducted and paid monthly by theemployer who also pays social security andother compulsory premiums.
Preliminary tax deduction covers:• The national income tax is progressive(typically 25 – 40 %)• The municipal income tax 16.5-22.5 %depending on location (e.g. in Helsinki
18.5 % in 2016)• The church tax (a flat rate from1.00–2.00 % in 2016, depending on themunicipality). The church tax is carried
only if an employee is a member of theEvangelical Lutheran or Orthodox
churches.

FACTSH

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ELECTRICITY TAXATIONINCENTIVES FOR
INDUSTRIESEXAMPLES OF TAX RATES INFINLAND IN 2016
CORPORATE INCOME TAX

Including:

20%

VALUE ADDED TAX

Mining (as of 2017)
Manufacturing

Standard

24%

Green houses

Foodstuffs, restaurant andcatering services andanimal feed

14%

Books, medicines, tickets tosporting, cultural eventsand facilities

10%

Data centers

POSITIVE ATTITUDE TO
TAXATION
Finns are happy to pay tax toprovide top-level public health care,
free schooling and other valuablepublic services to all residents inthe country.

REAL ESTATE TAX

0.80%–1.55%

RESIDENTIAL HOUSES

0.37%–0.80%

TRANSFER TAX

1.60%–2.00%

ELECTRICITY TAX
Source: 95% of Finns by Finnish Tax
Administration survey

TAX STRUCTURES BY COUNTRY 2013
The contribution of different tax types to tax revenue %For industries

0.703 cents / kWhFor households

2.253 cents / kWh

FINLAND HAS ONE OF THE LOWESTCORPORATE TAX RATES IN THE EU
Finland

20%

6.5

UK

20%

27.6

26.9

Denmark

22%

47.6

17.1

35.3

Sweden22%

Canada

47.1

24.3

28.6

EU1525%

Switzerland

45.6

22.9

31.5

Norway25%

Iceland

46.1

34.1

19.8

Netherland

25%United Kingdom

35.6

33.0

31.4

Italy

27.5%

Luxembourg

35.3

28.5

36.2

Germany

30%

Sweden

34.7

28.7

36.6

France33.3%

Belgium

35.5

24.1

40.4

Source: deloitte.com (2016)

Finland

34.7

33.1

32.2

Income taxes*Consumption taxes

Other taxes

Denmark

63.1

30.4

Norway45.5

United States*includes corporate income

Source: OECD 2013 (latest statistics available 2016)

Sources and further information
Finnish Tax Administration: www.vero.fi/en-US
The Taxpayers’ Association of Finland (TAF):
www.veronmaksajat.fi/fi-FI/inenglish/FACTSH

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Invest in Finland, Finpro Oy Porkkalankatu 1, FI-00180 Helsinki, Finland Telephone +358 204 695 555 www.investinfinland.fi