September 2023
Extension proposed for the Expert Tax Regime in Finland
In Finland, a tax resident individual's income from employment is subject to a progressive state tax, municipal tax, church tax and so-called YLE (public broadcasting) tax. The municipal tax depends on the municipality where the employee resides. Church tax is applicable only if the employee is a member of the Finnish Church. The highest marginal tax rate on salary income is approximately 50 %.
Under the Act on Foreign Experts’ Income, a non-Finnish employee may, however, be eligible for a flat tax-at-source rate of 32 % instead of progressive taxation. The Expert Tax Regime applies only to income from employment, and its application is subject to strict requirements which should always be reviewed before the employment in Finland commences. Currently, tax relief is available only for the first 48 months of work in Finland. However, in its draft budget proposal, the government of Prime Minister Petteri Orpo has proposed the extension of the Expert Tax Regime from four years to seven years. This would provide notable tax relief for foreign experts working in Finland.
Under the Act on Foreign Experts’ Income, a non-Finnish employee may, however, be eligible for a flat tax-at-source rate of 32 % instead of progressive taxation. The Expert Tax Regime applies only to income from employment, and its application is subject to strict requirements which should always be reviewed before the employment in Finland commences. Currently, tax relief is available only for the first 48 months of work in Finland. However, in its draft budget proposal, the government of Prime Minister Petteri Orpo has proposed the extension of the Expert Tax Regime from four years to seven years. This would provide notable tax relief for foreign experts working in Finland.
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The information in this site has been prepared for general informational purposes only and it should not be used as a substitute for consultation with a professional tax, legal or other competent advisor. While we have made every attempt to ensure that the information contained in this site has been obtained from reliable sources, Effektiivi Oy is not responsible for any errors or omissions, or for the results obtained from the use of this information.
The information in this site has been prepared for general informational purposes only and it should not be used as a substitute for consultation with a professional tax, legal or other competent advisor. While we have made every attempt to ensure that the information contained in this site has been obtained from reliable sources, Effektiivi Oy is not responsible for any errors or omissions, or for the results obtained from the use of this information.
