Taxation Of Individuals

RESIDENTS AND NON-RESIDENTS

Individuals are considered to be resident in Finland if their permanent abode is in Finland or they are physically present in Finland for more than six continuous months in a tax year. Foreigners staying in Finland a maximum of six months are considered non-residents and required to pay tax only on income arising in Finland.

TAXATION OF RESIDENTS

• Taxable Income

An individual is taxed separately on earned income and on investment income. Earned income is subject to national income tax, municipal income tax and church tax. Taxable earned income is generally computed in the same manner for these taxes, although the deductions and credits allowed for the different taxes differ slightly. Investment income is subject only to a flat tax of 28%.