TAXATION IN

Corporate taxation in Finland liability. The Finnish acronym for VAT is A preliminary on an employee’s income For businesses, comprise a ALV (arvonlisävero). is deducted and paid monthly by the corporation tax (profit tax) and a real employer who also pays social security and estate tax. Corporation tax is paid on Taxation for individuals in Finland other compulsory premiums. annual minus tax-deduct- Individuals pay a progressive ible expenses and losses. from their salaries. Foreign personnel Preliminary tax deduction covers: rate is 20% in Finland. Other taxes working in Finland for longer than a • The national income tax is progressive consist of an assets (former- six-month period are also required to pay (typically 25 – 40 %) ly stamp ) and a withholding tax. The Finnish income tax. If a foreign person • The municipal income tax 16.5-22.5 % employers are also required to make a works in Finland for less than six months, depending on location (e.g. in social security contribution. withholding tax of 35% is paid. If the 18.5 % in 2016) employer is a foreign company without a • The (a flat rate from Value added tax (VAT) permanent oce in Finland and the salary 1.00–2.00 % in 2016, depending on the VAT is an assessed as a is paid through a bank, taxes are paid in municipality). The church tax is carried percentage of the value of all goods and the home country, not in Finland. Key only if an employee is a member of the services, unless specifi cally exempted. It foreign personnel, even if in Finland for Evangelical Lutheran or Orthodox is a paid by the end longer than six months but not longer churches. consumer. VAT-registered businesses can than 24 months, also may pay the 35% deduct VAT paid on purchases for income tax, when their monthly salary business activities from their VAT exceeds € 5800.

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FACT SHEET ELECTRICITY TAXATION EXAMPLES OF TAX RATES IN INCENTIVES FOR FINLAND IN 2016 INDUSTRIES CORPORATE INCOME TAX 20%

Including: VALUE ADDED TAX Mining (as of 2017) Manufacturing Standard 24% Green houses Foodstus, restaurant and 14% Data centers catering services and animal feed Books, medicines, tickets to 10% sporting, cultural events POSITIVE ATTITUDE TO and facilities TAXATION

REAL ESTATE TAX 0.80%–1.55% are happy to pay tax to provide top-level public health care, RESIDENTIAL HOUSES 0.37%–0.80% free schooling and other valuable public services to all residents in TRANSFER TAX 1.60%–2.00% the country.

ELECTRICITY TAX For industries 0.703 cents / kWh Source: 95% of Finns by Finnish Tax For households 2.253 cents / kWh Administration survey

TAX STRUCTURES BY COUNTRY 2013 FINLAND HAS ONE OF THE LOWEST CORPORATE TAX RATES IN THE EU The contribution of dierent tax types to % Income taxes* Consumption taxes Other taxes Finland 20% Denmark 63.1 30.4 6.5 UK 20% Norway 45.5 27.6 26.9 Denmark 22% United States 47.6 17.1 35.3 22% Canada 47.1 24.3 28.6 EU15 25% Switzerland 45.6 22.9 31.5 Norway 25% Iceland 46.1 34.1 19.8 Netherland 25% United Kingdom 35.6 33.0 31.4 Italy 27.5% Luxembourg 35.3 28.5 36.2 Germany 30% Sweden 34.7 28.7 36.6 France 33.3%

Belgium 35.5 24.1 40.4 Source: deloitte.com (2016) Finland 34.7 33.1 32.2 Sources and further information *includes corporate income Finnish Tax Administration: www.vero.fi/en-US Source: OECD 2013 (latest statistics available 2016) The Taxpayers’ Association of Finland (TAF): www.veronmaksajat.fi/fi-FI/inenglish/

Invest in Finland, Finpro Oy Porkkalankatu 1, FI-00180 Helsinki, Finland Telephone +358 204 695 555 www.investinfinland.fi

FACT SHEET