Frequently Asked Questions - Russian invasion of Ukraine: donations and other tax-related matters
We have recently answered a number of questions that both individual and business taxpayers have asked on the subject of giving assistance to people in Ukraine. This page is a summary of them.
Donations of this type are not tax-deductible in income taxation. In the same way, donations in cash are not tax-deductible in income taxation. Because the part that you donate of your company’s products would be given away instead of being sold in the normal way, the company cannot make the usual income-tax deductions for the cost of manufacturing or purchasing of those products.
As for value-added taxation, please note the temporary VAT rule change:
Donations from VAT-registered businesses to Ukrainian refugees become VAT-exempt (only in Finnish or Swedish)
When you or your company sells goods and services, you receive income which is subject to tax even though your customer might pay the price of your goods and services directly to a charity organisation. If you donate amounts of income that are bound to arrive to yourself or to your company, it is considered a gift. You can make no tax deductions based on such a gift, not from the income you receive personally, nor from the income your company receives. The above tax treatment remains the same regardless of whether you donate something as a private individual, your company donates it, or a third party donates it with your or your company’s consent.
If you receive rental income from renting out a dwelling, it is taxable income. You can make tax deductions from this rental income based on any expenses you have had to pay that are connected to the rental operation.
If you rent out a dwelling and receive below-market rent, the maximum limit for tax-deductions is the amount of rental income that you actually receive. Accordingly, if the result of the rental operation is a loss, you are not allowed to deduct that loss.
If you receive no rental income at all, you are not allowed to make any tax deductions for expenses, either.
The above tax treatment remains the same if you have a company that provides accommodation free-of-charge or rents out apartments to those who have fled Ukraine.
If you are a performer who gives a performance at a concert without pay, the result is that you have not received any taxable income.
If a business enterprise or a corporate entity organises a concert for charity, the revenues from the concert are its income subject to tax. If the organiser is a business enterprise, it cannot deduct the donated revenues from the concert on its tax return.
If the organiser is a corporate entity promoting the public good, the revenue is not seen as taxable business income if the objective of organising the concert had been to gather financing for the entity’s activities.
The wages received from work in a foreign country may be tax-exempt in Finland if your work and presence in the foreign country lasts for at least 6 months, and you stay in Finland for no more than 6 days per month on average (the six-month rule).
Because of various exceptional circumstances, an individual taxpayer’s presence in Finland can be longer if the reason for coming home is that work in the foreign country is interrupted due to an unexpected, serious cause.
Ukraine is under martial law, and Finland’s Ministry for Foreign Affairs has instructed everyone to leave Ukraine and some territories of the Russian Federation without delay. Political unrest may extend to Russia and Belarus, and the Ministry for Foreign Affairs has instructed everyone to avoid travelling there.
If an individual’s work assignment in Ukraine, Russia or Belarus is now interrupted or completely terminated due to the reasons referred to above, the individual’s wage income from employment in those countries may be exempt from income tax by virtue of the six-month rule.
Note: The tax exemption for work lasting more than 6 months only applies to work done abroad, not to work done in Finland. Income for work done in Finland, including remote work, is always taxable in Finland.
For more information about the requirements, see Overseas work.
The capital gain you receive when selling a dwelling with profit is tax-exempt income under the following conditions:
- You have owned the shares that entitle you to the apartment, or you have owned the house or part of the house for at least 2 years, and
- you or your family members have lived in it for at least 2 consecutive years.
If you offer your permanent home for rent to people fleeing Ukraine – or let them live there for free – it means that the period when you live there yourself is interrupted, and the tax requirement of 2 consecutive years is not fulfilled. Even a short period of renting out or giving the dwelling to people fleeing Ukraine is seen as an interruption of the time period when you and your family live there. However, from the perspective of the tax rule that requires 2 consecutive years of living, you are allowed to let part of the dwelling be used by people fleeing Ukraine and keep living in the remaining part of the dwelling.
It is always your decision to make such a donation because your employer cannot make the decision – without asking you first – to send part of an employee’s wages to charity. In other words, you are the one who makes the decisions on how your wage income is used: you choose whether or not your employer should donate part of your wages to charity. For this reason, the donation itself has no impact on your taxes, i.e. also the amount that you donate is part of your taxable wage income.
Because of the sanctions that are in force, some banks are unable to transfer money in the usual way, which may also prevent the transfer of tax payments to the Finnish Tax Administration.
If the sanctions prevent the bank where you are a client from transfering money and your payments of Finnish taxes, we suggest that you open an account in another bank.
An alternative solution is to pay your taxes in cash at the Tax Administration’s offices in Finland. You must use the euro currency when paying. Further information about the tax offices and other offices of the Tax Administration that accept cash.
Note: if we receive no payment from you, we must transfer your unpaid tax balances to the Enforcement Authority for collection. In other words, the Tax Administration does not interrupt the recovery measures or the accrual of late-payment interest because of the sanctions. Later, when the sanctions no longer prevent you from paying, you must send your payment to the Enforcement Authority, following the instructions you receive from them.
If you have a payment arrangement in force, and we receive no payment of the instalments that have been agreed, the arrangement will lapse.
Normally, the Tax Administration pays the refund into the bank account that we have on file.
If we cannot send your tax refund to your Russian bank account,
- The amount of the refund will come back to the Tax Administration’s bank account. In this case, you will not lose the refund. Instead, it is applied to any of your upcoming taxes that fall due, or it is sent to you again later, at a time when the sanctions no longer prevent us from sending it. In these circumstances, it is possible that you receive credit interest on the refund.
- You can also open a new bank account in another bank and inform the Tax Administration of the account number. Then we will send the refund to that bank account.
In general, because you live outside Finland on a permanent basis, you can drive a foreign-registered motor vehicle in Finland exempt from tax, and there is no need to submit a declaration for the tax-exempt use. Read more about tax-exempt vehicle use in Finland. Check especially the time limits.
For more information, see
- How to request a tax card at the tax office when you have got a job, and you have been issued a decision on temporary protection or you have a document proving that you have requested temporary protection, and the matter is pending.