Working in Finland as a self-employed person
If you live in a foreign country but you operate trade or business here, it is possible that you need to pay income tax to Finland. Please read the tax rules that concern you.
The term ‘self-employed’ on these pages refers to trade operators and business operators alike.
The treaty signed between your country of residence and Finland for the avoidance of double taxation (the ‘tax treaty’) contains provisions that determine the circumstances where you need to pay taxes to Finland. It may be that you must pay Finnish tax due to staying here for a certain period, or it may be that you must pay Finnish tax due to your having a permanent establishment – or having a fixed base – in Finland.
For more information, see The fixed base or the permanent establishment
Please read the tax rules concerning registration to find out whether you need to submit an application to the Tax Administration for entry in different registers of taxpayers.
After the end of every tax year, you need to submit a Finnish income tax return. The tax return must be filed even if the income you receive were not subject to Finnish tax at all.
Business tax return – the self-employed
Starting up business in Finland?
Read more on setting up a business enterprise
The length of your presence in Finland: the 6-month threshold
If you live in a foreign country and you arrive in Finland for a period shorter than 6 months, you remain a nonresident taxpayer for purposes of Finnish taxes. This means that you must pay tax to Finland only on the income you receive from sources in Finland. If you have a self-employment here and the customer who pays you is Finnish, you are receiving income from a source in Finland. However, your country of residence and Finland may have agreed in their tax treaty that even if the source of your income is in Finland, your income is not taxed here.
If you stay in Finland for more than 6 months, you become a Finnish resident individual. This means that you pay tax to Finland on your worldwide income. If your permanent home is outside Finland, it is possible that the provisions of the tax treaty between your country and Finland determine that only a part of your income is subject to Finnish tax.
Read more about residency and non-residency
If you receive nonwage compensation, you can choose between prepayment registration and a Finnish tax card
Submitting an application for a tax card or tax-at-source card is possible if you operate a trade here and get paid. Your customer will withhold money from your nonwage pay, and remit the withheld amounts to the Finnish Tax Administration. Your other option is to first apply for prepayment registration, and then make the income-tax prepayments yourself.
The tax card or tax-at-source card
It may be that you live abroad on a permanent basis, and your work involves some temporary, less extensive activities of trade operation in Finland from time to time. Then you’d pay income tax to your country of residence only. In this case, your trade income would not be subject to taxes in Finland.
However, as long as the country where work is done is Finland, the law requires your customer or payor to withhold tax from your pay. If you are a nonresident taxpayer in Finland and get paid nonwage compensation i.e. trade income, the customers must withhold tax at source. If you are a Finnish tax resident, the customers must withhold tax as instructed on the domestic Finnish tax card. If you are issued a tax-at-source card or tax card showing 0% of withholding, your customers will refrain from withholding any money from your pay.
Read more on how to submit an application for a tax-at-source card or for a tax card
The prepayment register
Because you operate trade or business in Finland, you are entitled to submit an application for registration with the prepayment register. If you choose to become registered, the payor (your customer) will be relieved from its legal obligation to withhold taxes when paying you. When you are registered, you need to pre-pay tax yourself. However, there is no mandatory rule that would require anyone or any company to have the registration. Whether a foreign self-employed person is or is not registered has no effect on his or her liability for Finnish tax.
You have the option for registration if you have the right to operate trade or business in Finland. In general, if your permanent residence is located in an EU or EEA country, you usually have the right to operate in Finland.
If your permanent home is outside of the EU and EEA, you will need a Permit for a person in company management who lives permanently outside the European Economic Area, issued by PRH.
Read more about Permits to persons from outside the EEA.
If you are a tax resident of Finland, you are entitled to apply for registration simply because you operate trade or business. If you are a nonresident, you are entitled to apply for registration if your activities make you treated as having a permanent establishment here, or alternatively, you are entitled to apply for registration on the grounds that your country has a tax treaty with Finland.
It is worthwhile for you to submit an application for registration, if your activity is subjected to Finnish taxes, i.e. if Finland has the taxing rights in respect of your income. When you are prepayment-registered, there will be no need for you to obtain a Finnish tax card or tax-at-source card in order to receive payments from customers. The customers will not have to withhold tax from your pay. Instead, you are under the legal obligation to make prepayments independently as you receive your trade income. This means that you must first ask the Tax Administration to calculate the amounts of your prepayments for the ongoing year, and then pay the prepayments on your initiative.
Read more about the prepayment register
The VAT register
Submit an application for VAT registration if your trade or business gives rise to a permanent establishment for VAT purposes.
Read more about VAT for foreign businesses in Finland
The Tax Administration’s register of employers
If you have people on your payroll in Finland and you also have a permanent establishment here for income-tax purposes, you may need to become a registered employer.
Read more:
Social security and pension insurance contributions
It is possible that your country of tax residence is still the country where you are insured for social security. If this is so, you can obtain an A1 certificate, a document confirming that you have social security coverage abroad. If you have the certificate, you will not have to pay social contributions to Finland. Your country of tax residence – i.e., the country you are coming from – can issue you an A1 certificate, if the country is an EU country, an EEA country, the United Kingdom, or Switzerland.
If you do not have the A1 certificate, it may be that you need to turn to a Finnish insurance company to sign a pension insurance contract designed for the self-employed. Then you’ll need to pay a contribution known as “YEL” to the Finnish insurance company.
Read more about obligatory insurance for the self-employed (tyoelake.fi)
The self-employed must submit an income tax return
Because you are self-employed, you must complete a ‘business tax return’ (Form 5) on which you inform the Finnish authorities of your trade or business operations.
You can either fill in the paper tax return (Form 5) or log in to MyTax to submit your return.
Read more: tax return — the self-employed
To file the ‘business tax return’ is required of you every year, even if your income were actually not taxed in Finland at all, i.e. even if you are not liable for paying taxes here. In that case, tick the box for "Tax Treaty should be applied" or if you are using MyTax, answer Yes to "Do you request for a tax treaty to be applied?" You also need to enclose a free-text letter with your tax return, stating that you demand that Finland impose no tax on your income. Answer these questions on the free-text letter:
- What periods did you stay in Finland during the tax year?
- In which country is your permanent home located?
- If you are a resident individual here (longer than 6 months of presence) while your permanent home is located in another country, please enclose a Certificate of fiscal residence issued by that country’s tax authority.
- What kind of business or trade have you operated in Finland? For how long?
- If you were active in the construction or installation sectors, please give details on the lengths of the jobs:
- For every construction contract, fill in the time period and the town or city where the building is located.
- Enclose photocopies of the contracts you have signed with your customers.
- If you were active at a shipyard or several shipyards, please give details on the work you did, including job length, shipyard by shipyard.
- If you continue to be covered by the social security system of the country where you come from, please enclose a photocopy of your A1 certificate. (You may have delivered the A1 certificate to the Tax Administration previously. If so, there is no need to enclose the photocopy).
Self-employed people — other pages
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