In-Kind Benefits (Fringe Benefits) 2023
- Date of issue
- Record no.
- 1/1/2023 - Until further notice
These benefits refer to earnings, usually from employment, other than in cash, as part of compensation for work (examples: 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 2023
Under § 64 and § 76 of the act on income tax of 30 Dec 1992 (Tuloverolaki 1535/1992), as § 64.1 and § 76, subsection 1.5 stand in Act no. 504/2010, the Finnish Tax Administration has set out the following:
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
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||€297 + €13.10 per square metre|
|Helsinki 2||€295 + €12.00 per square metre|
|Helsinki 3, Espoo, Kauniainen||€263 + €11.10 per square metre|
|Helsinki 4, Vantaa||€212 + €11.20 per square metre|
|Jyväskylä, Kuopio, Lahti, Oulu, Tampere, Turku, other Helsinki metropolitan area, other Helsinki||€197 + €9.20 per square metre|
|Other regions of Finland||€171 + €8.30 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, 00380, 00400, 00430, 00440, 00620, 00650, 00660, 00670, 00680, 00690, 00730, 00780, 00790, 00800, 00830, 00840 and 00950.
'Helsinki 4' to 00190, 00230, 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' above 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 the act on income tax, 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.
If the employee himself pays for heating in a centrally-heated dwelling, the value referred to in § 2 is reduced by €1.25 per square metre and month.
In a stove-heated dwelling, the value of accommodation with heating is €4.81 per square metre and month. If the employee himself pays for the heating, the value is €3.29 per square metre and month.
When the employer provides unlimited use of electric power to the employee in addition to accommodation, it is valuated as €1.23 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.
The value of accommodation in a shared room, including heating and lighting, is €152.00 per month in a room with central heating.
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.
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.
The value of a heated garage or an indoor space in a parking structure is €88.00 per month in the 'Helsinki 1 to 4' districts, in Espoo, Kauniainen and Vantaa and €58.00 elsewhere in Finland. An unheated garage or indoor parking space is valued at €58.00 per month in the 'Helsinki 1 to 4' districts, in Espoo, Kauniainen and Vantaa and at €47.00 per month elsewhere in Finland.
Employer-provided meals are valued at €8.00 per meal if the employer's direct costs including VAT for providing this benefit are at least €8.00 but not more than €12.70. If direct costs including VAT are less than €8.00 or more than €12.70, the valuation of this benefit must reflect the actual costs including VAT.
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 the arrangement of meal services for the staff during their workday, 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, as described above in subsection 1, 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.
Employer-provided meals are valued at €6.00 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 €4.80 per meal.
The tax value for hotel and restaurant staff and flight crews during flights is €6.80 per meal.
If it is not connected with a special agreement with a restaurant on 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 €12.70 is 75 percent of nominal value and at least €8.00. If the voucher's nominal value exceeds €12.70, 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 and meal delivery, i.e. they receive no money, food ingredients or other commodities when paying with the voucher. 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.
If arrangements have been made for the use of an electronic payment system for paying for the lunch or other meals, including delivery, so that the price is debited at the point of sale, the principle of valuation is 75 percent of the nominal value of the sum credited to the electronic device by the employer, and at least €8.00 per working day as defined below in subsection 3. This requires that the employer has credited at least €8.00 and at most €12.70 per meal, including delivery, to the electronic device, and also that separate records are available on the electronic payments made from the credit balance given by the employer, and on any amounts credited to the device by the wage earner. Otherwise, the taxable value of the employer-provided sum must equal its nominal value.
The valuation of the amounts of euros on a device at 75%, as described above in subsection 1, requires that employees can only use them to pay for meals and for the delivery of meals, i.e. they receive no money, food ingredients or other commodities. If these requirements are not fulfilled, the euro balance, provided by the employer, on the device, must be valued at its nominal value.
An employee cannot receive more than €12.70 from the employer as the sum in credit 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
The value of room and board, lighting and heating is €609.00 per month in a single room and €586.00 per month in a shared room.
Full room and board at a hotel, etc., is valued at nominal value.
The value of this benefit received by a seafarer on duty equals €16.00 per day or the maximum of €360.00 per month.
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 2021 to 2023)
Company car – unlimited benefit (Vapaa autoetu; Fri bilförmån):
The monthly value of the benefit equals 1.4 percent of the replacement price of the vehicle; plus €300.00, or alternatively, 20 cents per kilometre.
Company car – limited benefit (Auton käyttöetu; Förmån att använda bil):
The monthly value of the benefit equals 1.4 percent 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 2018 to 2020)
The monthly value equals 1.2 percent of the replacement price of the vehicle; plus €315.00, or alternatively, 21 cents per kilometre.
The monthly value equals 1.2 percent 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 2018)
The monthly value equals 0.9 percent of the replacement price of the vehicle; plus €330.00, or alternatively, 22 cents per kilometre.
The monthly value equals 0.9 percent 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 kilometre|
|Unlimited benefit||€744.00||€264.00||+ €0.32/Km|
|Limited benefit||€444.00||€264.00||+ €0.12/Km|
For following vehicles, the taxable value of an unlimited company-car benefit is reduced:
- For all-electric vehicles, either 8 cents per kilometre or €120 from the monthly value is subtracted.
- Either 4 cents per kilometre, or alternatively €60 from the monthly value, is subtracted for plug-in hybrid vehicles including gasoline-electric hybrids and diesel-electric hybrids, and for vehicles running on methane-based natural gas.
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.
Where the vehicle registration in Finland has been obtained for the first time in 2020 or later, for a vehicle given to an employee as a company-car benefit, with emissions of carbon dioxide (under § 10, subsection 1 of the Car Tax Act (777/2020)) equalling 0 grams per kilometre, the value is reduced. For every month when the employee drives such a vehicle, €170.00 as referred to in § 64a, subsection 1 of the act on income tax is subtracted from the monthly company-car value, which prior to this subtraction is calculated as provided in this Decision.
An amount of €85.00 as referred to in § 64 a, subsection 3 of the act on income tax is subtracted from the value for every month when the company car has been a vehicle with a CO2 emissions rate between 1 and 100 grams per kilometre, and with registration in 2021 or later for the first time.
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 €3,400.00.
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.
Any automotive accessories are included in the valuation, in conformance to subsection 2 below, except the usual winter tires mounted on rims.
The value of accessories is added to the car's replacement price insofar as their value exceeds €1,200.00. 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.
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).
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.
For purposes of valuation, private kilometres include commuting to and from work.
The value of the company car benefit is increased by €465.00 per month or 31 cents per kilometre if a driver engaged by the employer takes charge of the driving.
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.
If at the employee’s place of work, or at a public charging station, the employee charges a vehicle with employer-provided electric power, and this vehicle is given to the employee as a company-car benefit and he or she pays for any other energy that the vehicle runs on, the company-car value must be calculated in the same way as the “limited” benefit in § 17.
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.
If the employee is entitled to ride an employer-provided bicycle for private purposes, this gives rise to a taxable benefit. The bicycle, as defined in § 28, subsections 1 and 2, of the Vehicles Act (82/2021), can be owned, leased, or arranged in another way by the employer.
If the employer is the owner of the bicycle, the tax value is 1/12 of the bicycle’s annual cost of capital resulting from part of its purchase price and the interest on this amount and the expenses for repair, maintenance and upkeep. The calculation rule for the cost of capital is to divide the bicycle’s purchase price by 5, reflecting a useful life of five years.
The calculation rule for leased bicycles, and for bicycles that the employer arranges in some other way, is to add the monthly leasing cost to the maintenance and upkeep that the employer also pays, and to subtract any processing charges included in the leasing company’s invoice. If the bicycle is arranged for in some other way and not leased, the above calculation is applicable as appropriate.
The tax value of repair and maintenance expenses – part of the upkeep of the bicycle – is €30.00 per month for electric bicycles and €20 for other bicycles referred to in subsection 1.
If the employer’s arrangement for a bicycle is part of a service package that combines several means of transportation, the monthly tax value is the amount that would have to be paid for only giving the employee the corresponding benefit.
The purchase price must include the bicycle's accessories such as a headlight, taillight, lock, studded tires and helmet.
Application of fair market value
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.
When this decision enters into force and how its valuation rules are applied
This decision comes into force on 1 January 2023.
The rules regarding the valuation of fringe benefits set out above will apply to the calculation of withholding taxes during 2023, and the final assessment for 2023. The rules also apply on all fringe benefits received by an individual taxpayer in December 2023 even if such a benefit, received in December 2023, is otherwise part of the individual taxpayer's income for the 2024 tax year.
Helsinki, November 23, 2022