Taxation in Finland (3/2025)

Are you moving to Finland from abroad? Are you wondering how your income is taxed in Finland? In this article we provide general information on the taxation in Finland. For more information on the taxation in Finland, please contact us here!

Before coming to Finland, you should find out whether you need a residence permit or visa to stay in Finland. Citizens of EU countries do not need a residence permit, but they must register their residence at the Finnish Immigration Service within three months of arriving in Finland.

Tax residency in Finland

If you move to Finland and have your main home and abode in Finland or live abroad but stay in Finland continuously for more than six months, you become a resident taxpayer in Finland. In this case, you are liable to pay taxes to Finland on your worldwide income.

Tax treaties may restrict Finland’s right to tax your income, and the right to tax should always be verified from the tax treaty concluded between Finland and the country in question. One of the most significant restrictions on salary income is the so-called 183-day rule. If the rule applies, Finland does not tax salary income received from abroad.

Finland has concluded tax treaties with nearly 80 countries. You can find a link to all tax treaties signed by Finland here. Articles of tax treaties are often complex, so it is highly recommended to use a tax lawyer experienced in international taxation when interpreting them.

Taxation in Finland – Earned Income

If you are a resident taxpayer in Finland and Finland has the right to tax your salary income according to the tax treaty, your salary will be taxed in state taxation according to a progressive tax scale (link to the state tax scale in 2025). A progressive tax scale means that your tax rate will be higher the more you earn. In addition to state tax, a municipal tax is levied on your salary income, which varies depending on your municipality of residence (link to municipal tax rates in 2025). Members of Evangelic Lutheran and Orthodox churches pay Church Tax between 1 and 2,25 % depending on the parish.

Also other labour costs may be collected from your salary income, such as pension and unemployment insurance contributions. The collection of these contributions depends on whether you are covered by Finnish social security. Finally your tax rate is affected by what deductions you are entitled to make from your salary income. For example you can under certain conditions deduct travel expenses between home and work if they exceed 900 euros.

Progressive taxation means that the tax rate on salary income of EUR 35,000, including state and municipal tax and labour costs, depending on your deductions and municipality, may be around 20% when the tax rate on salary income of EUR 90,000 may be almost 40%. These are only rough estimates of the taxes, contact us if you need a more accurate calculation.

Tax relief for employees with special expertise

Under certain conditions, a foreign employee with special expertise can claim a tax relief to be applied to his salary income.  There are several conditions for the tax relief, one of which is that the cash salary of the employee must be at least EUR 5,800 per month. If the relief applies, a flat tax rate of 32% will be levied on the salary income instead of a progressive tax.

Taxation in Finland – Capital Income

If you are a resident taxpayer in Finland and you receive capital income you may also be liable to pay tax on capital income to Finland. The tax rate on capital income is 30% up to EUR 30,000 and 34% above this. Capital income includes, for example rental income, interest income and capital gains from the sale of assets. For example, if you have received EUR 40,000 in capital income and Finland has the right to tax the income under the tax treaty, the tax on this is EUR 12,400 ((EUR 30,000 * 30%) + (EUR 10,000 * 34%)).

Non-resident taxpayer

If you live abroad and stay in Finland continuously for no more than six months, you are a non-resident taxpayer in Finland. In this case, you are only liable to pay taxes to Finland on income received from Finland. Examples of income received from Finland can be found in the Finnish Income Tax Act (link to the Act).

Taxation in Finland – Non-resident taxpayer

Tax at source is levied on income received from Finland by a non-resident taxpayer. Tax at source is a final tax and the tax rate on salary income is 35%. In certain situations, a non-resident taxpayer may claim that progressive tax is to be levied on his salary income instead of tax at source. In this case, the taxation of salary income takes place in the same way as for a resident taxpayers.

Elimination of double taxation

In some situations, a foreign person may be a resident taxpayer in two countries at the same time and both countries seek to tax the same income. In this case, tax treaties determine which country is obliged to eliminate double taxation. If Finland does not have a tax treaty with the country in question, double taxation is eliminated according to the Act on the Elimination of International Double Taxation (link to the Act).