What are the taxes in Finland?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2024-01-17 18:37

Finland currently has a fairly high standard of living for citizens, despite the fact that the taxation system in the country is quite tough.

General characteristics

There are two salient features of the Finnish tax system:

• high tax rates;
• practical absence of benefits system;
• the main part of the budget replenishment comes not from company taxes, but from taxes from citizens;
• strict system of control over the payment of taxes and pen alties in case of non-payment.

Among the main sources of Finnish tax revenue are:

• taxes on income and income;
• taxes on goods and services.

Taxes levied on individuals are divided into two types:

• employment (pension, salary and various payments);
• capital (from the sale of property, renting).

What kind of tax in Finland can be judged by studying the features of the taxation system:

• if a person came to Finland, works for a Finnish company, then he always pays taxes, but if he works for a company that is not located in the country, then taxesdoes not pay;
• transfer of profits from a branch in Finland to a parent overseas organization is tax-free;
• excises are imposed on a large number of goods (alcoholic products, juices, soft drinks);
• there are special fees, such as the seafarers' rescue fee;
• there is a dog tax;
• forest and farmland are not real estate, therefore not subject to tax;
• honorary title tax;
• paying all taxes in advance en titles you to some benefits;
• overpayment of taxes will definitely be returned in December;
• punishment for tax violations is not only material, but also criminal;
• no excess profit taxes, no minimum taxes.

Schematically, the list of main taxes in Finland can be presented in the form of a table below.

Tax group	Tax	Bid
Straight	Corporate tax	26%
	Capital income tax	28%
	Income tax	30 to 50%
	Property tax	0, 8%
Indirect	VAT	From 22% to 8% depending on product category
	Import customs duties
	Deductions from the payrollfees
	Excises

Income tax

Income tax in Finland is 36% of personal income. The following parameters affect the size of this bet:

• area of a house or apartment;
• marital status;
• children.

Note that this fee also includes mandatory he alth insurance and church tax payments.

A feature of the income tax in this country is the virtual absence of a system of tax benefits, or it is quite minimal. All citizens are required to pay income tax, except for the category of the poor.

If a foreigner stays in Finland for more than 6 months, then he also pays income tax in the same amount as local citizens. For this purpose, a foreign citizen must apply to a special magistrate at the place of his temporary residence, obtain his personal code and issue an appropriate taxpayer card. In this case, the tax rate for foreigners is fixed at 35% (including pensions, roy alties).

For non-residents, taxation is used in terms of income received in Finland. The tax rate is 28%. For example, if a person lives in Finland but does work for a company in Russia, then such income is not taxed.

Payroll tax

The amount of payroll tax dependsfrom her size. There is a clear grading system for rates, presented in the table below.

Salary, thousand euros per year	Payroll tax rate, %
Under 16	0%
From 16 to 24	6%
From 24 to 39, 6	17%
39, 6 to 71, 3	21, 4%
…….	….
Over 100	31

31% is the maximum rate for this tax.

Property tax

Feature of property tax in Finland is the fact that for 6 months prior to the registration of the transaction, the buyer of real estate must pay a tax of 2% when buying an apartment and 4% when buying a house. If after this period the tax is not paid by the buyer, then the rate may increase several times.

Another feature is the tax exemption if the buyer is between 18 and 40 years of age and also if this is his first real estate purchase.

Further, a tax in the amount of 0.5% to 1% of the value of the property is paid annually. It is worth noting that income from property rental is taxed at a rate of 30-32%.

VAT

This type of tax mustpaid monthly. Its base rate is high at 24%.

There are three types of bets:

• 24% - basic rate;
• 14% - rate on food products and catering services;
• 10% - for transport, medicines, media, etc.

Tax refund

Let's take a look at how tax refunds work in Finland. Many Finnish stores support the Tax Free system, in which you can return 10% of the purchase price. The meaning of such a system is that goods worth at least 40 euros are bought in one place (moreover, food and consumer goods are considered separately). Further, it is forbidden to unpack these products until the tax refund (but no more than 90 days after purchase).

Books and tobacco products are a special category. There is no tax refund from them.

Transport tax

Transport tax is paid once on new cars that were produced or imported into Finland, as well as used ones that were brought from abroad.

Paid tax at the time of car registration.

Corporate Income Tax

Legal entities are required to pay taxes on the company's profits. The taxation system is characterized by "tax neutrality", which means that taxation does not depend on the form of ownership.

Individual entrepreneurs who receive income also pay taxes. From their incomeexpenses should be deducted. Tax is paid on the profits received, and the rest goes as the entrepreneur's earnings.

Taxation of limited companies is similar. First, profit is considered, then it is divided among the owners of the business, and then tax is taken from each, as from sole earnings.

Joint-stock companies pay tax at a rate of 20%. The company can make dividend payments to shareholders, which are further taxed.

What about due dates?

Taxes in Finland must be paid in advance, which means in advance. So, it is necessary to roughly estimate the amount of income that the taxpayer will receive for the year, and pay the required amount of tax before December 31 of the current year. In this case, the planning of the amount of income occurs independently by the payer. In case of overpayment, the money will be returned, and in case of shortage, it will be necessary to pay extra. For those who deposit money in advance, there are small concessions.

Consequences of non-payment of taxes

Failure to pay taxes once for a good reason is treated fairly loyally. However, in case of repeated warning, there will be an increase in rates and interest. The amount of the increase depends on the amount and severity of the violations. For the most serious violations, all persons responsible for taxation at the enterprise can be imprisoned for 4 months to 4 years. Further, this organization will be blacklisted, which will subsequently be manifested by the fact that banks and other intermediary companies will stop working with ytq.

Conclusions

Taxes in Finland incurrently remain quite high, but the system itself is very well debugged and works flawlessly in matters of replenishing the treasury in the country. This fact is evidenced by the fact that in the UN list Finland is in 5th place in terms of happiness index.