In-Kind Benefits (Fringe Benefits) 2019

These benefits refer to earnings, usually from employment, other than in cash, as part of compensation for work (examples: free or subsidised meals, accommodation, company car, etc.), which are a portion of employment income.

The value of benefits received from an employer is included in the employee's taxable income. The valuation of benefits in kind varies year to year because of differences in costs to employer, market value, etc.

Decision of the Finnish Tax Administration on the valuation of taxable in-kind benefits to be applied in 2019

Under § 64 and § 76 of the Income Tax Act (Tuloverolaki 1535/1992) of 30 Dec 1992, as § 64.1 and § 76, subsection 1.5 stand in the Act (504/2010), the Finnish Tax Administration has set out the following:

1 §

Any benefits in kind (fringe benefits) received from an employer in Finland or other countries are assessed on the following bases:

Accommodation and the use of electric power

2 §

The tax values of employer-provided accommodation that includes heating, in dwellings with central heating, are as follows:

Region or Location	Value per month
Helsinki 1	€287 + €12.60 per square metre
Helsinki 2	€283 + €11.50 per square metre
Helsinki 3, Espoo, Kauniainen	€253 + €10.60 per square metre
Helsinki 4, Vantaa	€202 + €10.60 per square metre
Jyväskylä, Kuopio, Lahti, Oulu, Tampere, Turku, other Helsinki metropolitan area, other Helsinki	€189 + €8.80 per square metre
Other regions of Finland	€164 + €7.90 per square metre

The 'Helsinki 1' location above refers to employer-provided accommodation in the 00100, 00120, 00130, 00140, 00150, 00160, 00170, 00180, 00220 and 00260 postal code districts. Similarly, 'Helsinki 2' refers to 00200, 00210, 00250, 00270, 00280, 00290, 00300, 00310, 00320, 00330, 00340, 00500, 00510, 00520, 00530, 00540, 00550, 00560, 00570, 00580, 00590, 00610, 00810,  00850 and 00990, 'Helsinki 3' to 00240, 00350, 00360, 00370, 00400, 00430, 00440, 00620, 00650, 00660, 00670, 00680, 00690, 00730, 00780, 00790, 00800, 00830, 00840 and 00950, and 'Helsinki 4' to 00190, 00230, 00380, 00390, 00410, 00420, 00600, 00630, 00640, 00700, 00710, 00720, 00740, 00750, 00760, 00770, 00820, 00860, 00870, 00880,00890, 00900, 00910, 00920, 00930, 00940, 00960, 00970 and 00980. The 'other Helsinki metropolitan area' refers to employer-provided accommodation in Hyvinkää, Järvenpää, Kerava, Kirkkonummi, Nurmijärvi, Riihimäki, Sipoo, Tuusula and Vihti. For purposes of these provisions, the dwelling's municipal or postal code district is the one that is valid on the first day of the tax year.

By way of derogation from subsection 1, the tax value of accommodation in a dwelling referred to in the Act on the Use, Assignment and Redemption of State-Subsidised Rental Dwellings and Buildings (Aravarajoituslaki 1190/1993) should not exceed the amount of rent charged for the dwelling.

The value of the benefit received in a foreign country under § 76, subsection 1.5, of Income Tax Act (Tuloverolaki; Inkomstskattelagen), equals the current rent of the dwelling, but not more than 50 percent of the current taxable benefit value of a dwelling referred to in subsection 1, located in 'Helsinki 2' districts.

If a travel agent or travel service employee, pursuant to a clause in his employment contract to that effect, is prepared to relocate as necessary, and during work in a foreign country, the employer requires that the employee change his/her accommodation and location of work, the valuation of the benefit arising from employer-provided accommodation must be based on a dwelling size of 25 square metres.

3 §

If the employee himself pays for heating in a centrally-heated dwelling, the value referred to in § 2 is reduced by €1.21 per square metre and month.

4 §

In a stove-heated dwelling, the value of accommodation with heating is €4.62 per square metre and month. If the employee himself pays for the heating, the value is €3.17 per square metre and month.

5 §

When the employer provides unlimited use of electric power to the employee in addition to accommodation, it is valuated as €0.83 per square metre and month. This value does not include electric heating.

For purposes of valuation, accommodation with electric heating is equated with accommodation with central heating.

6 §

The value of accommodation in a shared room, including heating and lighting, is €142.00 per month in a room with central heating. The value of accommodation in a stove-heated room is €49.00 per month.

7 §

For purposes of valuation, the floor area is deemed to comprise not only the actual living space but also the facilities used by the employee or his family, such as a sauna, a swimming pool and a hobby room. Nevertheless, a garage is not included in the floor area.

If the taxpayer had employer-provided accommodation during the previous year and its valuation for the current year makes it more expensive, its actual fringe-benefit value cannot be raised by more than 20 percent compared to that of the previous year.

8 §

If the competent authority has established that the level of housing rents in a particular municipality is lower than the taxable benefit values given above in § 2, subsection 1, a general reduction in the values can be made in that municipality, but not for more than 20 percent.

Correspondingly, because of location within a municipality, the values above in § 2, subsection 1, or as amended under subsection 1 of the present section, can be reduced, but not by more than 20 percent.

Garage

9 §

The value of a heated garage or an indoor space in a parking structure is €84.00 per month in the 'Helsinki 1 to 4' districts, in Espoo, Kauniainen and Vantaa and €54.00 elsewhere in Finland.  An unheated garage or indoor parking space is valued at €54.00 per month in the 'Helsinki 1 to 4' districts, in Espoo, Kauniainen and Vantaa and at €43.00 per month elsewhere in Finland.

Meals

10 §

Employer-provided meals are valued at €6.60 per meal if the employer's direct costs including VAT for providing this benefit are at least €6.60 but not more than €10.50. If direct costs including VAT are less than €6.60 or more than €10.50, the valuation of this benefit must reflect the actual costs including VAT.

11 §

Direct costs include the raw materials used in preparing the meal plus preparation and serving wages including social security costs. If the employer has agreed with a restaurant on furnishing meal services for the staff, the amount paid by the employer to the restaurant for the meal is the direct cost.

Delivery costs of the meals to the place where the employees eat are not included in direct costs.

If employees pay back an amount of money to the employer for meals, it is not taken into account when direct costs are calculated, but it is subtracted from the tax value of the meal benefit.

12 §

Employer-provided meals are valued at €4.95 per meal for personnel working in a hospital, school, day care center, or other similar institution, and eating at the institution. Furthermore, the tax value of a meal for personnel supervising the mealtimes of students or patients in a school, day care center or other comparable institution is € 3.96 per meal.

The tax value for hotel and restaurant staff and flight crews during flights is €5.61 per meal.

13 §

If it is not connected with a special agreement with a restaurant on furnishing meal services for the staff, the value of a benefit given in the form of a lunch voucher or other similar method of payment with the maximum nominal value of €10.50 is 75 per cent of nominal value and at least €6.60. If the voucher's nominal value exceeds € 10.50, its taxable in-kind benefit value will equal its nominal value.

The valuation of a voucher or similar method of payment at 75% as described above in subsection 1 requires that employees only can use the voucher to pay for meals, i.e. no money, food ingredients or other commodities are given in return. If the voucher does not fulfil these requirements, it must be valued at nominal value. An employee can only receive one voucher per actual working day in Finland, on the condition that the employer has not made any other arrangements regarding daily meals.

14 §

If arrangements have been made for card payment in the form of a plastic card or other specific device for paying for the lunch or other meals, the principle of valuation is 75 percent of the nominal value of what is charged, and at least €6.60 per working day as defined below in subsection 3. This requires that at least €6.60 and at most € 10.50 is being charged per meal. If the charge exceeds €10.50 or stays below €6.60, its taxable in-kind benefit value will equal its nominal value.

The valuation of plastic-card balances at 75% as described above in subsection 1 requires that employees only can use them to pay for meals, i.e. no money, food ingredients or other commodities are given in return. If these requirements are not fulfilled, card balance must be valued at nominal value.

An employee cannot receive more than €10.50 as card balance per actual working day in Finland, on the condition that the employer has not made any other arrangements regarding daily meals.

Full room and board

15 §

The value of room and board, lighting and heating is €517.00 per month in a single room and €495.00 per month in a shared room.

Full room and board at a hotel etc. is valued at nominal value.

16 §

The value of this benefit received by a seafarer on duty equals €13.20 per day or the maximum of €297.00 per month.

Employer-provided vehicles

17 §

If an employee or his family uses the employer's passenger car or van for private driving, this gives rise to a taxable company car benefit (In Finnish: autoetu / In Swedish: bilförmån). The tax value is based on the year when the vehicle was put on the road, as recorded in its registration document, as follows:

(a) Age group A (Vehicles put on the road 2017 to 2019)

Company car -- unlimited benefit (Vapaa autoetu; Fri bilförmån):

The monthly value of the benefit equals 1.4 per cent of the replacement price of the vehicle; plus € 270.00, or alternatively, 18 cents per kilometre.

Company car -- limited benefit (Auton käyttöetu; Förmån att använda bil):

The monthly value of the benefit equals 1.4 per cent of the replacement price of the vehicle; plus €105.00, or alternatively, 7 cents per kilometre.

(b) Age group B (Vehicles put on the road 2014 to 2016)

Unlimited benefit:

The monthly value equals 1.2 per cent of the replacement price of the vehicle; plus € 285.00, or alternatively, 19 cents per kilometre.

Limited benefit:

The monthly value equals 1.2 per cent of the replacement price of the vehicle; plus €120.00, or alternatively, 8 cents per kilometre.

(c) Age group C (Vehicles put on the road before 2014)

Unlimited benefit:

The monthly value equals 0.9 per cent of the replacement price of the vehicle; plus € 300.00, or alternatively, 20 cents per kilometre.

Limited benefit:

The monthly value equals 0.9 per cent of the replacement price of the vehicle; plus €135.00, or alternatively, 9 cents per kilometre.

Company car benefit received in another country (Vehicles put on the road before 2008)

	Monthly value	Value based on a driver's log or other reliable record provided by the taxpayer or the tax authorities
	€ per month	Basic value, € per month	+ Value per kilometre, € per month
Unlimited benefit	€744.00	€264.00	+ €0.32/Km
Limited benefit	€444.00	€264.00	+ €0.12/Km

In the case of all-electric vehicles that run entirely on electricity, the taxable value of an unlimited company-car benefit is reduced, by subtracting either 8 cents per kilometre, or alternatively, €120 from the monthly value.

The employee should substantiate the values based on kilometres by keeping records, such as a driver's log. Tax authorities may revaluate the taxable value of the company car benefit in the final assessment if the kilometres relating to private driving obviously exceed 18,000 kilometres.

If the employee uses different vehicles during the month because of the nature of his work, the basic value of the benefit should be based on the characteristics of the vehicle used most of the time.

18 §

In Age groups A, B and C, 'basic value' means the percentage calculated on the replacement price. 'Replacement price' means the general recommended retail price of the make and model, quoted at the date of purchase by the importer or by the wholesale dealer if no importer's quote is available, less €3,400.00. However, if no such recommended retail price is known for a vehicle put on the road in 2015, and for vehicles put on the road before 2015, 'replacement price' means the general recommended retail price of the make and model, quoted at the start of the calendar month when the vehicle was put on the road, by the importer or by the wholesale dealer if no importer's quote is available, less €3,400.00. The percentages referred to in § 17 are calculated on this adjusted price. The resulting amount is rounded down to the nearest 10 euros.

A company car benefit received in another country is valuated according to the year when the car was put on the road, according to its registration document as explained above in § 17. Nevertheless, for new vehicles put on the road after 2007, 'basic value', within the meaning of subsection 1 above, means the percentage calculated on the local purchase price in the country of purchase, with the local taxes in the country of purchase, less €3,400.

19 §

If work-related driving exceeds 30,000 kilometres during the calendar year, or if the employee constantly switches from one vehicle to another, as described in § 17, subsection 3, the basic value of the benefit is 80 percent of the basic value under § 17 and § 18 above.

20 §

Any automotive accessories are included in the valuation except the usual winter tires and a car telephone. A car telephone, if installed, is valued similarly as a mobile-phone benefit.

The value of accessories is added to the car's replacement price insofar as their value exceeds €850.00. However, if any rebate granted to the employer on the accessories exceeds the ordinary cash rebate or the equivalent, the value of the accessories should be equated with their usual recommended retail prices.

21 §

If the employer pays all the expenses, the benefit is an Unlimited Benefit (Vapaa autoetu / Fri bilförmån). If the employee at least pays for the energy to run the vehicle, it is a Limited Benefit (Auton käyttöetu / Förmån att använda bil). In the case of an electric vehicle, the employee is also considered to pay for the energy when he or she is taxed on the fringe benefit consisting of charging the battery at the place of work – applying either the taxable value under § 25 or the fair market value under § 27. Employees are also considered to pay for the energy when – in order to compensate for the charging – they pay back their employer an amount matching the fringe-benefit value.

If the employee pays back an amount of money to the employer, this amount should be subtracted from the taxable value of the unlimited or limited company car benefit.

22 §

For purposes of valuation, private kilometres include commuting to and from work.

23 §

The value of the company car benefit is increased by €450.00 per month or 30 cents per kilometre if a driver engaged by the employer takes charge of the driving.

24 §

The driver's log referred to in § 17 must show the daily kilometre count of the employer-provided vehicle during the tax year.

The following facts regarding work-related driving must be entered daily in driver's log:

• Start and end hours,
• Start and end locations, and the route driven, as necessary,
• Odometer readings at start and end,
• Distance travelled,
• Purpose of trip, and
• Name of user of vehicle.

25 §

If the employee’s own vehicle or vehicle given to them as a limited company-car benefit is being charged at work, with electric power paid for by the employer, the fringe benefit consisting of this is valued at €30.00 per month.

Telephone

26 §

The value of a benefit resulting from an employer-provided telephone at an employee's home (a stationary, fixed telephone line) is €20.00 per month. This value covers expenses arising from telephone calls.

The value of an employer-provided mobile (cellular) phone is €20.00 per month. This value covers expenses arising from telephone calls, SMS or text messages and multimedia messages.

Application of fair market value

27 §

Any fringe benefit must be valued at its fair market value if it is not listed above, or if its fair market value, under the circumstances that prevail, is evidently lower than the value under this Decision.

If employees pay back an amount of money to the employer for a received benefit, this amount must be subtracted from the tax value of the benefit.

Entry into force

28 §

This decision comes into force on 1 January 2019, and will apply to the calculation of withholding taxes during 2019, and the final assessment for 2019.

Helsinki, November 20, 2018.