Taxes in Finland, Taxation in Finland, Taxes system in Finland
Value Added Tax (VAT)
Finland as a candidate for the European Union in 1994 adopted a regulation on tax on goods and services tax (VAT) in line with those in force in the European Union (Directive No. 6 targeting VAT and others). Until then, here in force sales tax. The current rules are adapted to the requirements of Council Directive 2006/112/EC on the common system of value added tax of 28 November 2006, which with effect from 1 January 2007 replaced the Sixth VAT Directive.
The exception is agreed in the Accession Treaty to exclude from the tax a separate administrative unit of the EU - Aland. However, in the internal market of goods and services between the province of Aland and the rest of Finland, the same rules of the Finnish legislation on VAT. With respect to the other members of the European Union Aland Islands are treated as a territory in a third country.
The standard rate of VAT is 22%. Also apply two reduced rates. For the following goods and services, the following reduced rates:
12%: food (excluding live animals, food services, drinking water, alcoholic beverages and tobacco products - change in tax rates from 17 to 12% occurred on 1 October 2009.) Animal feed, food and animal feed
8%: medicine, books, cinema performances, carriage of passengers, hotels and other housing services, entrance fees (theaters, circuses, musical performances and dance performances, sporting events, zoos, museums and other such events and institutions)
0% (zero rate)
O subscription of newspapers and periodicals (selling individual copies shall be fully taxable)
O printing services for publications related to corporate activities to the public
O vessels (excluding used for sport and recreation), the reduction applies to the sale, rental, and charter ships and their repair, maintenance and other work associated with them, the supply of gold to the central bank, foreign trade.
Limit exemptions symptoms
For administrative purposes, it was assumed that the tax is computed for bodies and legal persons subject to tax, whose annual turnover exceeds 8 500 euros.
The limit of tax exemption does not include:
foreign persons who do not have permanent residence in Finland.
Question exemptions from VAT are:
medical services and health services
education services that are provided in accordance with applicable law or are subsidized by the State in accordance with the applicable rules
Financial services and transactions in securities (excluding consultation and deposit services)
brokerage and insurance services, also provided by the agents
Gambling and lotteries
fees of artists, athletes
some transactions made by the blind
Translation for the deaf
Cemetery services provided by public cemeteries
berries and other forest fruits and mushrooms are not grown, sold by collectors.
A foreign trader, which in Finland is not obliged to remove the sales tax and has no permanent establishment in Finland may obtain a VAT refund for purchased goods and services in Finland. Also, the tax levied on entry of goods into Finland can be returned.
To obtain reimbursement is that the purchase in Finland associated with conducting business through an entity abroad, either within the EU or outside it. VAT refund procedure is the same regardless of place of business. The right to reimbursement is not based on reciprocity, which also applies to companies of those countries in which the VAT refund system has been introduced.
Including refundable The following purchases include VAT in the price: conference services, samples of goods, exhibition and trade fair services, training services, office supplies, copying services, maps, literature, professional, hotel services and transport in Finland, liquid fuels and lubricants, service and repair, spare parts, car rental, parking services.
Terms of VAT refund:
1st are related to such activity subject conducted abroad, which, if it was carried out in Finland, the procedure would be subject to VAT or
2nd are related to such activity subject conducted abroad, which, if it was conducted in Finland, to authorize the reimbursement specified in the Law on VAT or
3rd are related to such activity of a foreign entity in Finland for sales of goods and services, in which the taxable party is the purchaser (the inverted tax liability). Inverted tax liability shall apply if the vendor is a foreign entity without a permanent establishment in Finland, which is not in the VAT Register. The right to a refund of VAT are also entitled to if the customer is the state treasury.
For the following purchases are not entitled to a VAT refund:
goods and services purchased for personal use, the operator or his staff
purchases for the purposes of representation, including restaurant bills, gifts, Shopping, etc.
goods and services procured for use for travel through tour operators on the other economic operators
costs associated with the sale of gold for investment purposes at a price not taxable.
Detailed information on VAT and forms in PDF format online at the Tax Office, http://www.vero.fi/.
The taxation of travel agents
In the case of sales by travel agents on their behalf purchased services operator is used in a special "tax margin (margin tax scheme) measured from the commission. The rate of corporation tax is 22%.
The tax on the margin only applies to services purchased by the operator to any other taxable entity. It does not apply to services provided by the operator. These are universal procedure for tax purposes. If you sold service consists of its own and purchased services, then the premium is subject to tax only the service purchased. Tax on profit margin applies to the sale of services within the whole European Community.
Sales of services purchased from outside the European Union and sold on behalf of the buyer's own is not taxed.
Excise duty in Finland are, for example:
Fuel: unleaded petrol and leaded, their blends, diesel, fuel oil, heavy oil and LPG
electricity and energy sources, including coal, peat and natural gas
pine oil produced industrially for heating -
packaging of alcoholic beverages and refreshments free of charge reusable packaging having approval of the Ministry of Environment.
These taxes were introduced by separate laws, which describe in detail the rules governing them and any possibility of relief.
The excise duties are excluded:
products exported outside the European Union
fuel and lubricants, and supply vessels and aircraft in international commercial
products in certain limits imported by travelers
Alcoholic products are not intended for direct consumption (eg for the production of medicines, food).
Tax Income Tax
In 2009, the uniform rate of tax for companies (Corporate Income Tax) is 26%. Entities subject to taxation by that same rate on all income.
Tax reductions and exemptions
Exempt from tax receipts are as follows: capital, which were covered by the shareholders, the return of income tax (excluding interest) and communications company. The last case is a consequence of the fact that companies are not treated as entities for tax purposes, but taxable income is assigned to a partner.
The types of expenses included in deductible costs:
expenditure on purchases and investments
expenses related to the purchase of fixed assets (excluding land) to the amount of the annual amount of depreciation balance
rent from property and water rights, as well as the premises used for business and professional
wages and salaries, pensions and similar benefits or regular periodic compensation of employees (or former employees) and insurance premiums and other similar payments
payment of the profit from the investments made by employees
contributions to company pension funds to the amount of pension liabilities, contributions made by insurance companies and pension funds and other institutions to the amount of retirement pension obligations
expenditure on research and development
start up costs and reorganization
50% of expenditure on entertainment
membership fees in employers' organizations and trade unions
losses resulting from fraud, theft and other crimes associated with financial assets
Annual returns and other (eg, overpayments)
interest expenses on loans taken for business activity
exchange losses on claims and loan-related economic activity
local taxes on real estate-related economic activity and occupational
expenses related to the practice of forest
expenses related to the guarantee funds and damages.
Taxes on individuals
The main taxes on individuals is a state income tax levied on individuals to the State and municipal taxes to the municipality.
Progressive income tax on individuals (valtion tulovero - State Tax on Earned Income) shall be calculated from earned income, wages, salaries, payment of any deliberate, bonuses for management, obtained a commission, rental value of rented for employees free housing, allowances, and these to cover the cost of residence, car allowances and benefits paid to unemployed people.
Tax rates and thresholds applicable in 2009:
Taxable Income Tax Rate The basic amount of tax
13 100 - 21 700 8 7
21 700 - 35 300 610 1918
Three hundred 35 - 64 500 3 058 22
Five hundred 64 - 9 482 30.5
Odliczenia connected with employment include
deduction for the cost of commuting to a fixed amount at the net. Generally, these costs are deducted from the amount of the cheapest means of transport ie public transport
deduction for expenditure on publications and equipment necessary to practice.
contributions for compulsory pension insurance
contributions to compulsory unemployment insurance
Interest on loans (deducted from capital income), if the loan has been earmarked for the purchase of a permanent dwelling or property used for the purpose of obtaining income.
child care (0-17 years) living on the farm with the ex-spouse
Other types of taxes
Council Tax (kunnallisvero - Municipal Tax on Income) - the rate is 15 to 20% depending on the municipality. Council Tax is levied on all income with no lower limit.
The tax on capital income (pääomavero - State Tax On Capital Iincome) - paid on bank interest, dividends, income from rental of premises and in 2009 has a single rate of 28%.
Church tax (kirkollisvero - Church Tax) - the rate is between 1% - 2%. The right to collect this tax from their members have only the Finnish Evangelical-Lutheran and Orthodox Church.
When taking effect. Taxes are also levied charges for social security, which are counted by a single rate of income. In 2009, the rate of health insurance is 1.98% of income.
The taxation of salaries of Poles posted to work in Finland by Polish
According to the agreement concluded between the Polish and Finland on the prevention of double taxation with respect to Taxes on Income and on Capital, signed on 26.10.1977 year (Official Gazette No. 12/79 item. 84) Pole living in Finland for a period or periods not exceeding in the aggregate 183 days during the calendar year shall be taxable only in Poland.
Years from 1.1.2011 for a period or periods of residence in Finland can not exceed a total of 183 days in the next 12 months (and not within a calendar year). If so Pole seconded to work in Finland for example, starts 08/01/2011 and ends 01/05/2012 it, it will be forced to pay tax in Finland, because the total period of residence in Finland exceeds 183 days. If a similar situation will take place a year earlier and the work period will run from 01/08/2010 to 01/05/2011, it will only pay taxes in Poland.
The same also applies Finns posted to work in Poland.