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 his/her worldwide income only for the period that he/she was resident. For the portion of the year that he/she was not resident in Finland, he/she would be taxable only on any Finnish-source income.
Income tax is calculated by applying a progressive state tax rate schedule (maximum 31.75 percent in 2016) and a flat municipal tax rate (varies from municipality to municipality, e.g. in Helsinki 18.5 percent in 2016) to taxable income. Investment income up to EUR 30,000 is taxed at 30 percent and investment income exceeding EUR 30,000 is taxed at 34 percent in 2016, church tax and employee’s sickness insurance contribution may be levied in connection with income taxation.
The tax year for individuals is the calendar year.
The official currency of Finland is the Euro (EUR).
Herein, the host country refers to the country to which the employee is assigned. The home country refers to the country where the assignee lives when he/she is not on assignment.
© 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.