In Finland, tax is charged at the rate of your salary. Your tax percentage varies depending on how much you earn.
If you come to Finland for work purposes, how long you stay in Finland affects tax rates. In addition to income tax, there are various Finnish taxes . The state covers the following expenses with the tax money collected;
- Health Service,
- day care,
- defense systems
The tax system in Finland is one of the progressive tax systems. According to this system, people with higher income pay more taxes. The tax rate is calculated separately for everyone in the country. Your spouse’s income does not affect your tax amount. You can learn the tax rate you will pay on the counter of the Tax Administration. The employer pays income tax by deducting it directly from the salary. For this process, the employer needs your tax card. At the end of the year, the Tax Administration calculates whether enough tax has been paid from the income. In case of overpayment of tax, a tax refund will be made. If taxes are paid less, you have to pay extra.
You need to check whether the employer pays your taxes on your salary. That’s why we recommend that you keep your payslip. Failure to pay taxes may result in sanctions.
Income tax in Finland is about 36% of income. Issues affecting the tax rate;
- size of the house,
- Marital status,
- It is the number of children.
The tax includes compulsory health insurance and church tax. The biggest feature of income tax in Finland is that the tax advantage is extremely low. All citizens are obliged to pay income tax. If a foreigner stays in Finland for more than six months, he/she starts paying income tax. For this reason, the person must obtain the personal identification code at the place of temporary residence. The tax rate for foreigners is calculated as 35%. The tax rate for non-residents is 28%.
Property tax in Finland is not taxed if the buyer is between 18 and 40 years old or if it is the first property purchase or sale. The annual tax rate is 0.5% to 1% of the real estate value. On the other hand, 30% tax is allocated from the profit obtained from the real estate lease.
How to refund tax in Finland ? You can get 10% of the purchase price as a refund. The goods to be returned must not be less than 40 Euros. However, unpacking of goods is prohibited until tax refund. There are no tax refunds on books and tobacco products.
A one-time tax is levied on vehicles manufactured in Finland or purchased from abroad. Tax is paid at the time of registration of the car.
Legal entities are required to pay taxes on the profits of the company. The taxation system is defined by “tax neutrality”. Individual entrepreneurs earning income are also included in the tax system.
Profits are taken into account in limited partnerships. It is then split between the business owners and taxed on the single profit. Joint stock companies are liable to pay 20% tax.
What Happens If You Evade Tax?
Goodwill is sought in the tax missed for the first time. However, if more than one warning is evaded, interest rates will also rise. The rate of increase varies according to the status of the violations. In case of serious violation, you can be sentenced to imprisonment from 4 months to 4 years. However, the tax evasion organization will be blacklisted.
You need a tax card for taxation. You can easily obtain this card from the tax office. You can also apply for taxation retrospectively. If you are working as an insured in the country, you must have an A1/E101 document regarding your insurance.
When you move from Finland, you must give notice of the move. Thus, your tax declaration will be sent to your addresses. Taxes in Finland are paid in advance.