Do you live in Finland and work in another Nordic country for a public entity?
Do you live in Finland and are being paid by a public entity for work performed in another Nordic country? The following information only applies to this type of income.
Definition of "public sector employer"
You are deemed to have a public sector employer when you are employed by the central government, regional or municipal authorities or a public law institution, or an equivalent administrative authority in the other Nordic countries. State universities and university colleges in the Nordic countries except Finland are deemed to be public sector employers. The Finnish universities are deemed to be private employers. Companies owned by the state or a municipality etc. are not regarded as public sector employers. Nor will the state, municipality etc. be regarded as a public sector employer if the business in question is a commercial undertaking.
Read here if you live in Finland and work in another Nordic country for a private sector employer? "
Finnish public entity as the employer
If you start working in another Nordic country and are employed by a Finnish public entity, your wages will only be taxed in Finland.
Public entity of another Nordic country as the employer
If you work in another Nordic country and your employer is a public entity of that country, your wages will be taxable there, not in Finland. Nevertheless, you are expected to declare this income in your Pre-Completed Tax Return in Finland, and even though you have paid tax in the other Nordic country, the income itself will continue to have an impact on the progression of your tax rate, if you have other income taxable in Finland.
Six-month exemption rule
If, under the circumstances, your Nordic country of work has the right to tax your wages, and the duration of your employment exceeds six months, it is possible that the six-month exemption rule may be applicable in Finland. If the six-month exemption is applicable, your Nordic-sourced income will not have any impact on your Finnish taxes, not even on the progressive tax rate regarding any other taxable income. Please note that among the requirements of the six-month exemption rule is the condition that you have not visited Finland for more than six days per every month of working.
If the work is partially performed in Finland, the portion of your wages representing the Finland-based work will be subject to tax in Finland only.
Taxation in Finland
If your employer is a Finnish public entity, your wages are subject to Finnish withholding tax, remitted to the Finnish tax authority by your employer. Your Pre-Completed Tax Return will have the amounts recorded.
If your employer is not a Finnish employer, you yourself are expected to add the Nordic-sourced income in line Other income from foreign sources. Use tax form "liitelomake 16" (only in Finnish and Swedish) to give full details on your work.
Based on the wages earned in another Nordic country, you are liable to pay the Finnish health insurance contribution (amounting to approximately 2%), if you have received from Finland the certificate A1 of a posted employee, or if for other reasons, you, during the employment, were insured by the Finnish public health insurance system.
Tax rules regarding frontier work
If you live in Finland in a municipality adjacent to the Swedish or Norwegian national border, and your place of work is across the border, on the Swedish or Norwegian side, also in a municipality adjacent to the national border, special tax rules apply. You will only pay tax in Finland. It is required that you stay in your home, located in Finland, every week for at least two days and for at least one night.