The effects of the Incomes Register on international situations
Wages, salary and earned income paid after 1 January 2019 will be reported to the Incomes Register.
Income data must be reported to the Incomes Register in international working situations whenever the payer has an obligation to inform some data user using the Incomes Register. For example, if the income earner is insured in Finland, the payer is obligated to submit data to the Incomes Register for use by earnings-related pension providers and other social insurance providers who are the Incomes Register's data users. In such a situation, it does not matter whether the income is paid by a foreign or a domestic employer and where the work is performed.
A Finnish employer's obligation to submit data to the Incomes Register in international situations
A Finnish employer must report data to the Incomes Register in the following international situations:
- Income paid for working abroad (to persons living abroad and in Finland).
- Income paid for working in Finland to an income earner coming to Finland from abroad to work
- Wages paid by a foreign group company for working abroad, when a Finnish employer has posted an employee abroad and the employee is insured in Finland.
- Wages for insurance purposes agreed for work abroad.
- Additional information on the work abroad for the Tax Administration (the so-called six-month rule).
- Additional information on work in a Nordic country for the Tax Administration.
A foreign employer's obligation to submit data to the Incomes Register
A foreign employer may also be obliged to report data to the Incomes Register on wages it has paid.
For taxation purposes, a company that has not been established in accordance with Finnish law or that has a registered domicile elsewhere than in Finland, or a person acting as an employer and not living in Finland (non-resident taxpayer), will be considered a foreign employer.
If, with regards to income taxation, a foreign company has a permanent establishment in Finland, it must register with the Tax Administration's Employer Register if it pays wages for work performed in Finland. In such a case, the employer has the same employer obligations regarding taxation as a Finnish employer, and must submit data to the Incomes Register in the same way as a Finnish company.
Furthermore, a foreign employee leasing company that leases employees to a service recipient in Finland must submit data to the Incomes Register concerning the employee's work in Finland.
A foreign company does not have a permanent establishment
A foreign company that does not have a permanent establishment in Finland as regards income taxation, but pays wages for work performed in Finland, can register with the Employer Register if it so desires. In such a case, the company will have the same employer obligations with regard to taxation as Finnish companies. The employer will submit the data to the Incomes Register, using the additional income earner details in addition to the income type.
A foreign employer that does not have a permanent establishment in Finland as regards income taxation must submit an earnings payment report to the Incomes Register in the following situations. The data must be submitted regardless of whether or not the company is registered in the Employer Register.
- The earnings payment report must be submitted when an income earner working in Finland is paid income; and
- the income earner is insured in Finland; or
- the income earner stays in Finland for more than six months, even if they are not insured in Finland; or
- the employee is a leased employee who is a non-resident taxpayer, and Finland has the taxation right to the wages according to a tax treaty between the employee's country of residence and Finland.
- An income earner working abroad is paid income, and the income earner is insured in Finland.
Representative of a foreign employer
A foreign employer is obligated to submit an earnings payment report and an employer's separate report to the Incomes Register, if the employer is registered in the Prepayment Register. If the employer is not registered in the Prepayment Register, a representative of the foreign employer has a secondary obligation to submit data required for taxation. If, however, the representative does not submit said data, it must be submitted by the foreign employer.
The representative is obligated to report the following data to the Incomes Register on behalf of the employer:
- The wage income paid by a foreign employer for work performed in Finland when a foreign employee leasing company has leased an employee to a service recipient in Finland and when the tax treaty between the employee's country of residence and Finland does not prevent Finland from taxing the wages.
- Wage income paid by a foreign employer when the wage earner stays in Finland for a consecutive period exceeding six months.
Whenever an income earner is insured in Finland, a foreign employer must report the related data to the Incomes Register for insurance purposes. This is not affected by whether or not the employer has a representative.
Reporting income received for work abroad
Under certain conditions, an income earner working abroad can be covered by Finnish social security. In such a case, social insurance contributions must be paid to Finland based on the income earner's income. The payer must also report the necessary data to the Incomes Register.
The so-called six-month tax exemption rule may be applied to the wages of an employee working abroad (Section 77 of the Income Tax Act). In such a case, the wages paid will be tax-exempt in Finland and only social insurance contributions will be paid from the income if the income earner is covered by Finnish social security. Data on the amount of the wages for insurance purposes will then be reported to the Incomes Register. If no wages for insurance purposes have been determined, the income actually paid to the income earner will be reported.
If the six-month rule is applied to the wage income and the income earner is insured in Finland, the payer must report Person working abroad to the Incomes Register as an additional income earner detail. This data will always be used when an employee insured in Finland works abroad as an employee posted by a Finnish employer.
When the employer applies the six-month rule of the Income Tax Act to the wage income, the following data must be reported to the Incomes Register in addition to the income type: Six-month rule is applicable: Yes and the country code of the country of work. In situations where wages for insurance purposes have been determined for an employee, but the six-month rule is not applied, the following data must be submitted: Six-month rule is applicable: No. If no wages for insurance purposes have been determined for the duration of the work period abroad and the six-month rule is not applied to the wage income, the Six-month rule is applicable data does not need to be submitted.
If a Finnish company posts an employee abroad and, for example, a foreign group company pays the employee's wages and the employee is insured in Finland, the Finnish company will pay the employer's social insurance contributions (including the employer's health insurance contribution) and report them to the Incomes Register. In these situations, the Finnish company that posted the employee will report its own details in the payer details and submit Payment made by a foreign group company as an other payer detail, and Person working abroad as an additional income earner detail.
When an employer does not withhold taxes because the six-month rule is applied to the income, the employer must submit complementary data required by the Tax Administration to the Incomes Register.
Earnings payment report and employer's separate report
An earnings payment report will be submitted separately for each employee and each payment date. The employer's separate report will be submitted company-specifically once per month. The report and the income types will be the same for all income earners, both resident and non-resident taxpayers. The uniform earnings payment report will be used for reporting the income of both resident and non-resident taxpayers. In international situations, income will be reported using the same income types, regardless of whether the income earner is a resident or non-resident taxpayer. If the income earner is a non-resident taxpayer, the following data must also be included in the income earner's details: Non-resident taxpayer: Yes.
The earnings payment report must be submitted within five calendar days of the payment date. This means the payday, or the day on which the payment is available to the income earner.
The employer's separate report must be submitted on the fifth day of the calendar month following the payment month. The separate report must be used to report the total amount of the employer's health insurance contributions paid and any deductions made thereof, and the "No wages payable" data of an employer in the employer register.
The data must be reported to the Incomes Register in euros. If the payment was made in some other currency, the payment must be converted into euros using the ECB's reference exchange rate valid on the payment date.
Reporting of wages moves to the Incomes Register – the other reporting channels will be discontinued
The last annual notifications for wages will be submitted for 2018 separately to the Tax Administration, the earnings-related pension providers, the Employment Fund and occupational accident insurance providers. Data on payments made after 1 January 2019 will be submitted in real time to a single, centralised register. This will apply to all payers, with no transition periods.
Payments made before 1 January 2019 will be reported and corrected separately with regard to each authority. It should be noted, however, that in 2019, employers must submit reports to the Incomes Register and separately to the authority in question for the year 2018 and the preceding years.
Reports NT1, NT2, Employee Leasing Notice, employer and payer of wages in another country (6147a) and Employer's report of foreign pay (5053a) were submitted to the Tax Administration before the year 2019. With regard to payments made after 1 January 2019, the data on the forms in question will be submitted electronically to the Incomes Register.
Submit the data to the Incomes Register as comprehensively as possible – this will reduce the amount of work needed later
Some of the data to be reported to the Incomes Register are mandatory on every report, and some are mandatory if the income in question is paid. Some of the data are voluntarily submitted complementary data that data users need in order to fully utilise the data they receive from the Incomes Register.
The mandatory data to be reported to the Incomes Register matches the data submitted to Tax Administration, earnings-related pension providers, occupational accident insurance providers and the Employment Fund on annual notifications before the year 2019 without a separate request.
Complementary data is needed for benefit decisions, the determination of customer fees and claims handling, for example. When an employer submits complementary data directly in connection with the wage payment, there is a reduction in the amount of retroactive investigative work.