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Working in Finland as a self-employed person

As a foreign self-employed individual, you are always expected to send the Finnish Tax Administration an account describing the work you do in Finland. Each time you get a new assignment or job, you should submit such an account again. However, if you are registered in Finland as a self-employed individual operating a trade or business, you are not required to submit the accounts.

The income you receive for your work as a business operator or a self-employed person is considered trade income, not wages.

The tax treaty between Finland and your country of residence determines in which situations you need to pay taxes to Finland for work you have performed as a self-employed person. It may be that you must pay Finnish tax on the income you receive if you stay long enough or if you are treated as having a fixed base in Finland.

How long you stay in Finland affects taxation

If you stay in Finland for no longer than 6 months, you are considered a non-resident taxpayer. This normally means that you must pay tax at source on the income you receive from Finnish sources. The income from a business or trade operated in this country is regarded as income received from Finnish sources.

If you stay longer than 6 months, you are treated as a Finnish tax resident. This means that you normally have to pay tax to Finland on all the income you receive. However, your home country and Finland may have signed a tax treaty that prohibits Finland from imposing tax on the income you receive from outside Finland.

During the work year, you must usually pay tax in advance. The amount of tax is based on an estimate of your annual income. The following year, you will receive a pre-completed tax return. Check and send back the tax return. You will then receive a final tax decision. If you have not received a pre-completed return by letter, you must file a tax return on your own initiative for both your private and business income in MyTax or on paper forms.

How to file information for your tax return on paper

Permanent establishments or fixed bases in Finland

You need to pay taxes to Finland for your business activities if you have a permanent establishment/fixed base in Finland and the activities are considered permanent enough in nature, both geographically and temporally. Business activities that last longer than 6 months are considered permanent in terms of time. In such a case, you must pay tax to Finland on all the income relating to the fixed base. The following circumstances may give rise to a fixed base if you are a self-employed person who:

  • conducts business in Finland in an office, workshop or in your home
  • sells goods or services in Finland in a marketplace, at a trade fair or at events
  • works in shipbuilding at a shipyard
    • note: the time limits relating to construction and installation work are not applicable to working at a shipyard

Example: You live in Poland and work as a self-employed subcontractor at a shipyard in Finland for 10 months. The shipyard is a geographically fixed base, and the activity is also considered permanent in terms of time because it lasts over 6 months. Working at the shipyard is considered to form a fixed base in Finland. You must pay taxes to Finland on the income you receive for your work at the shipyard.

If you carry out a construction or an installation contract in Finland that lasts longer than the time limit provided by the applicable tax treaty (6, 9, 12 or 18 months), you need to pay taxes to Finland on the income you receive. The duration of the contract work is not calculated based on any single contract that has been drawn up. Instead, it is calculated based on how long you actually work at the site.  

Example: You live in Poland and work as a self-employed person at a house construction site in Finland. The contract lasts 8 months. The time limit for construction and installation work in the tax treaty between Finland and Poland is 12 months. Because the duration of the contract does not exceed this time limit, no fixed based is formed. You do not pay income tax to Finland on the income you receive for this contract.

Example: You live in Estonia and work as a self-employed person at a house construction site in Finland. The contract lasts 8 months, and you stay in Finland for over 183 days during the period. The time limit for construction and installation work in the tax treaty between Finland and Estonia is 6 months. Because the duration of the contract exceeds this time limit, the contract is considered to give rise to a fixed base in Finland. In addition, according to the tax treaty between Finland and Estonia, if you stay in Finland for over 183 days during a period of 12 months, your business activities are treated as having a fixed base in Finland (even if the contract lasted less than 6 months). You pay income tax to Finland on the income you receive for the contract.

Note: If your country of residence has no tax treaty with Finland, it is within Finland’s taxing rights to impose tax on the income you receive in Finland as a business operator or as a self-employed person. You should submit an application either for a tax card or for a calculation of prepayments, depending on whether you are staying in Finland for max. 6 months or longer. 

You must also check whether your trade or business operation necessitates registration for value added tax in Finland (available in Finnish and Swedish, link to Finnish).

If you are about to start up businesssee the guidance for new entrepreneurs.

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