Foreign worker staying no longer than 6 months – you have the option to claim progressive tax treatment

If you stay in Finland for max. 6 months, you are considered a nonresident individual. In general, you need to pay 35% tax at source on your wages received from a Finnish source. 

However, you are entitled to submit a claim for tax treatment under the progressive scheme and thus avoid being taxed by the “at source” system, if you are a tax resident of

• a member country of the EU or Norway, Iceland or Liechtenstein, or
• any country that has signed a tax treaty with Finland. 

‘Progressive tax’ means that your payments of tax depend on a percentage that will grow (= progress) if you receive an increase in income – and shrink if your income goes down.  Actual percentage will be based on your actual income and deductions for the entire year.

You are entitled to deductions from the income you get for the expenses you pay for

• commuting from home to work
• the production of income
• contributing to pension and unemployment insurance.

You must have a Finnish personal identity code before you submit a claim for progressive taxation.

Income sourced to countries other than Finland has an impact on the tax rate applied to your Finnish income

Finland will only collect taxes on the income you get from Finland. At the same time, any receipts of income such as wages, pay, pension or social benefits (unemployment relief, study grants, other benefits) will increase the progressive tax, when the source is

• a foreign country, and the income is subject to tax in your country of tax residence, or
• the source is Finland, but provisions of the tax treaty prevent Finland from taxing the income.

You are entitled to claim deductions for any expenses you had to pay in order to gain or produce the income.

Note: the above items of income will not increase the tax on your Finnish income if

• you are a tax resident of an EU country, Norway, Iceland or Liechtenstein AND
• your income from sources in Finland makes up at least 75% of your total income for the year (the 75-percent rule).

Instructions:

If you have a Finnish personal identity code already, there is no need to visit a service point in person. Skip the first stage and go to stage 2. 

Remember to submit a tax return to Finland 

If you claimed progressive tax when you requested a tax card

On the condition that your tax card contains a record of your progressive tax treatment, the Tax Administration will send you a pre-completed tax return in the spring following the year when you worked in Finland. After receiving it, please check all the pre-filled amounts and information.

Any income sourced to countries other than Finland (income from your country of residence or elsewhere), which you may have indicated on your request form for a Finnish tax card, should show on the pre-completed return in the “Foreign income > Exemption method” space. If this kind of income is recorded on the Finnish tax return, it means that the progressive income tax with respect to your Finnish-source income will be higher.

If you are a tax resident of an EU country, Norway, Iceland or Liechtenstein AND your income from Finland makes up at least 75% of your total income for the year, please check that none of your income from sources outside Finland is pre‑filled under “Foreign income > Exemption method”.

If amounts of income are pre-filled there, please complete and submit Form 6148e Request for progressive taxation of earned income. Additionally, provide a written account in free text to submit your demand that your income sourced to countries other than Finland should be excluded from the amount of taxes to be assessed on your Finnish-source income.

If you do not receive a pre-completed tax return in spring, you must file a Finnish tax return on your initiative in MyTax or on paper forms.

If all the information on the pre-completed tax return is correct, you do not need to do anything. Enclosed with the tax return form comes the tax-assessment decision for the year.

If you notice that the pre-filled amounts of income are wrong or missing or if other information needs to be corrected, make the corrections as necessary and declare the amounts as they should be. You can use a paper form or log in to MyTax.

You will receive a new, revised decision with the final amounts of taxes in the autumn. If too little was withheld from your income or if your prepayments were too low, you will be given instructions concerning back taxes. If you are not satisfied with the decision, instructions for appeal are enclosed.

If you submitted an application for a tax card without claiming progressive tax

When you complete your pre-completed return, you can still ask for progressive tax treatment for the past tax year, although you did not request it when you applied for your tax card, and as a result, your employer withheld tax at source.  You need to complete the paper forms below to give us the details that are needed.

Complete Form 6148e Request for progressive taxation of earned income. 

• Please indicate the sum of your earned income sourced to Finland.

• In addition, indicate
  • the amounts of your wages, pensions and social benefits subject to tax in your country of residence (these may include unemployment relief or study grants, etc.), received from the following sources:
  • foreign countries, not Finland
  • from a Finnish source, but provisions of the tax treaty prevent Finland from taxing the income.
• In addition, indicate your expenses for the production of income, connected to the above items of income.

If you are a tax resident of an EU country, Norway, Iceland or Liechtenstein AND your income from sources in Finland makes up at least 75% of your total income for the year,

• • provide a written account in free text to submit your demand that your income from outside Finland be excluded from the amount of taxes to be assessed on your Finnish-source income.

Additionally, fill in Form 50A — Earned income and deductions

• This form is where you can claim the deductible expenses for the production of your Finnish-source income. 

You will receive a new, revised decision with the final amounts of taxes in the autumn. If too little was withheld from your income or if your prepayments were too low, you will be given instructions concerning back taxes. If you are not satisfied with the decision, instructions for appeal are enclosed.

The Tax Administration may ask you for a certificate issued by your country of residence

It may be necessary for the Tax Administration to send you a letter asking for a certificate showing the amounts of income taxed and the amounts of deductions allowed.

• To respond to such a request, you can use the template on the last page of Form 6148e, Certificate by the tax authorities in home country. Alternatively, you can enclose other documentation received from the tax authorities in your home country.
• Alternatively, to present proof of the amounts of foreign income received during the tax year, you can provide the Tax Administration with a photocopy of your foreign pay slip or provide other reliable documentation.

Pre-completed tax return – making corrections in MyTax or on paper