Finland - Other taxes and levies

Finland - Other taxes and levies

Taxation of international executives

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All additional tax information is summarized by KPMG Oy Ab, the Finnish member firm of KPMG International, based on Finish tax legislation in force in March 2013.

Social security tax

Are there social security/social insurance taxes in Finland? If so, what are the rates for employers and employees?

Employer and employee

Type of insurance Paid by employer Paid by employee  Total
Statutory pension insurance premium (on average) 18.00%
5.70%/7.20%
23.7%/25.2%
Unemployment insurance premium (on average) 1.0%/3.90%
1.15%
2.15%/5.05%
Accident insurance premium (on average) 0.9% N/A 0.9%
Group life insurance premium (on average) 0.07%
N/A 0.07%
Employer's social security premium 2.12%
N/A 2.12%
Daily allowance premium N/A 0.82%
0.82%
Medical treatment premium N/A 1.30%
1.30%
Total (on average) 22.09%/24.99%
8.97%/10.45%
31.06%/35.44%

Gift, wealth, estate, and/or inheritance tax

Are there any gift, wealth, estate, and/or inheritance taxes in Finland?

Inheritance and gift tax is imposed on property acquired by inheritance, bequest, or gift. Inheritance tax is levied on the individual share of each beneficiary, not on the estate of the deceased as a whole. Taxable property includes real estate, shares, and movable property, wherever situated, if the deceased or heir or beneficiary lived in Finland at the time of death.

Beneficiaries are divided into two classes.

  • Class I - Spouses, children, spouse’s children, adopted children, parents, adoptive parents, and direct heirs of children or adopted children, betrothed in certain circumstances, and common-law spouses if the couple has been married before or if they have had a child.
  • Class II - Other relatives and strangers.

Inheritance tax rates in Class I are as follows.

Value of taxation property (EUR)

Basic tax amount Plus percent on the excess

20,000 - 40,000

100 8

40,000 - 60,000

1,700 11

60,000 - 200,000

3,900 14

200,000 – 1,000,000

23,500 17

1,000,000 – over

159,500 20

 

Inheritance tax rates in Class II are as follows.

Value of taxation property (EUR)

Basic tax amount Plus percent on the excess

20,000 - 40,000

100 21

40,000 - 60,000

4,300 27

60,000 – 1,000,000

9,700 33

1,000,000 – over

319,900 36

 

Gift tax rates in Class I are as follows.

Value of taxation property (EUR)

Basic tax amount Plus percent on the excess

4,000 - 17,000

100 8

17,000 - 50,000

1,140 11

50,000 - 200,000

4,770 14

200,000 – 1,000,000

25,770 17

1,000,000 – over

161,770 20

 

Gift tax rates in Class II are as follows.

Value of taxation property (EUR)

Basic tax amount Plus percent on the excess

4,000 - 17,000

100 21

17,000 - 50,000

2,830 27

50,000 – 1,000,000

11,470 33

1,000,000 – over

325,240 36

Real estate tax

Are there real estate taxes in Finland?

Real estate property situated in Finland is subject to real estate tax. The revenue goes to the local municipality. Land used in forestry or agriculture are exempted.

Real estate tax is payable by those who own taxable property at the beginning of the calendar year.

The amount of real estate tax is based on the tax value of the real property. Tax rates vary in different municipalities between 0.80 percent and 1.55 percent of tax value. The rate for houses used for living is between 0.37 percent and 0.80 percent of the tax value.

Sales/VAT tax

Are there sales and/or value-added taxes in Finland?

The standard rate of VAT is 24 percent. In addition, two reduced rates are in use: 14 percent, which is applied on food and animal feed, and 10 percent, which is applied for example to passenger transportation services. Tax is computed on the total charge for goods or services, excluding the amount of tax.

Unemployment tax

Are there unemployment taxes in Finland?

The employer pays one part and the employee pays the other part of the unemployment insurance contribution. The unemployment insurance contribution is collected by the accident insurance company together with the statutory accident insurance contribution. In 2016, the unemployment insurance contribution paid by the employer is 1,00 percent on the total amount of gross salaries up to the amount of EUR2,044,500 and 3.90 percent on the exceeding amount. Correspondingly, the unemployment insurance contribution paid by the employee is 1.15 percent of gross salary. 

Other taxes

Are there additional taxes in Finland that may be relevant to the general assignee? For example, customs tax, excise tax, stamp tax, and so on.

Municipal tax

Municipal tax is levied at flat rates. The tax varies between 16.5 percent and 22.5 percent in 2016 depending upon the municipality.

In municipal taxation, if an individual’s taxable earned income is between EUR2,500 and EUR7,230, a deduction is made of 51 percent of the portion of income, which exceeds EUR2,500. For the part of the income that exceeds EUR7,230, the deduction is 28 percent. The maximum deduction is EUR3,570. The allowable deduction is gradually phased out for taxpayers with income higher than EUR14,000.

If taxable income after certain deductions is not more than EUR3,020 (2016), a deduction equal to the amount of taxable income is available. The deduction is reduced by 18 percent of the portion of income which exceeds EUR3,020. For salary income exceeding approximately EUR19,798, no deduction is allowed.

Net wealth taxes

As of January 2006, the net wealth tax has been abolished.

Church tax

The local communities of the Evangelical-Lutheran and Orthodox churches levy church tax. Church tax is imposed at flat rates between 1 percent and 2.20 percent (2015) that are set annually for the following year by each community ecclesiastical council. Church tax is levied on the same taxable income as determined for municipal tax purposes.

Transfer tax

Alienation of real estate and securities are subject to transfer tax. The tax rate is 4 percent of purchase price or other remuneration for real estate and 1.6 percent for securities other than shares in housing companies. For shares in housing companies the tax rate is 2 percent as of 1 March 2013. Alienation of shares of listed companies via the stock exchange is exempt. There are certain other exemptions of the rule (for example, concerning purchase of the taxpayer’s first own dwelling).

© 2016 KPMG Oy Ab, a Finland 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.

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