Tax card for foreign workers in Finland: what it is and the procedure for obtaining it
Obtaining a tax card is an important part of the employment of foreign workers in Finland. Find out more about the types of tax cards, how to apply for one, how to extend a tax card in Finland, and other important nuances
Tax card is a mandatory document for legal work in Finland, which you must have in order to receive a salary or other income in the country. The tax card shows your tax rate so the employer knows how much to withhold from your pay. According to Finnish law, there is no single tax rate in the country, it depends on the amount of a person's income and is calculated individually.
In this material, we talk in detail about the features and procedure of issuing a tax card in Finland.
Who needs to issue a Finnish tax card?
You need a Finnish tax card (verokortti) if you work and receive a salary in Finland. Those who have a pension or other social benefits in Finland must also issue a tax card.
Types of tax cards in Finland
- If you are a resident of Finland or have been in the country for more than six months, you must apply for a resident taxpayer tax card.
- Those who arrive in Finland for less than six months or want their income to be taxed according to the progressive taxation scheme, need to issue a non-resident tax payer card.
How to apply for a tax card in Finland?
You can apply for a tax card at the service desk of the Finnish Tax Administration (Vero).
1) Vero accepts applicants by appointment - you can register online or by calling 029 497 050.
2) During the visit, you must have the following package of documents:
- Valid passport or valid identity card.
- Employment contract.
- Finnish identification code - You can get it from DVV (Finland's digital register website) or by visiting the Helsinki Regional Tax Office at Hämeentie 15.
- Form 5042e – application for a tax card, tax advance payment or tax number
- Form 5057e is a nonresident's application for a source tax card, tax card, tax advance payment, or tax number.
Also, before your visit, estimate your total annual income, including salary income and possible fringe benefits, vacation, bonuses, etc.
When applying for the first tax card, the employee must determine his income for the entire year. Employer-provided relocation services, airfare, relocation expenses, or a “relocation bonus” may be partially or fully taxable. Therefore, they must also be taken into account when issuing a tax card.
You can also learn more about the specifics of personal taxation in Finland at the Finnish Tax Administration (Vero) service.
The electronic tax card is available online in the MyTax service. Alternatively, a paper copy can be mailed to your home.
The tax card is valid for one year.
How to renew a tax card in Finland?
The extension procedure is automatic. If you are a permanent resident of Finland, the tax administration will send you a new tax card every year in December or January. The IRS calculates the tax rate for you based on how much income you earned in the previous year.
If there are significant changes in your financial situation during the year, you can report them through the MyTax online service.
What will happen if the tax card is not provided to the employer?
If you do not provide your tax card to your employer, they will withhold 60% of your salary as tax.
The employer only needs to show his tax card or provide a copy of it, there is no need to leave the original.
Most often, citizens of Estonia, China, Russia, Iraq and Somalia issue a work permit in Finland. The rules of entry and stay in Finland for expats from any country in the world can be found on the Visit World portal.
Tax number for those who work in construction or shipyard
Foreigners who plan to work in construction or shipyard in Finland additionally need to have a tax number (veronumero). It is used to verify that all employees are registered with the Finnish Tax Administration. Your tax number must be indicated on the documents, which will also include the expat's name and photo. A foreigner does not have the right to work in a construction or shipyard without this document.
You can get a tax number at the tax inspectorate at the same time as issuing a tax card.
Features of the Finnish taxation system
The taxation of foreign workers is affected by the length of stay in Finland and whether the employer is Finnish or foreign. As a rule, the employee is obliged to pay his taxes in Finland if he stays in the country for more than six months.
The second feature is that there are differences in taxation depending on the profession of the employee: for example, researchers and teachers from certain countries can receive tax exemptions. In addition, highly skilled workers have their own tax card, which requires the fulfillment of certain conditions related to salary and job duties. The purpose of the special procedure for qualified personnel is to increase the attractiveness of Finland among the best professionals.
It is also important to understand that Finnish taxation is progressive, meaning that the tax rate increases as income increases. This is a significant difference compared to many other countries where taxation occurs at a single rate.
In general, to get a job in Finland, you need to apply for a residence permit, get a Finnish personal identification number, a tax card and open a bank account. Additionally, make sure that your social security registration is also in order.
The editors of Visit World recommend using the Work Guide for Finland for a comfortable and safe trip.
The guide is a detailed written document that contains basic advice on obtaining a visa, crossing the border, getting a job, citizenship, and much more. More details at the link.
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