Do you have pension income in another Nordic country and you are living in Finland?
This information is addressed to you, if you are resident in Finland and draw a pension from another Nordic country. It only deals with the assessment of pension income. Please note that the Nordic tax treaty was recently amended; date of amendments being 4 April 2008, and new rules are effective as of January 2009.
Did you live in Finland on 4 April 2008?
If you receive pension from a Swedish, Norwegian, Danish or Icelandic source, the pension will be taxed in the country of payment. If you were living in Finland on 4 April 2008 and receiving such pension, the exemption method continues to be applicable: If you have Finnish-sourced and Nordic-sourced pension at the same time, the combined gross income (foreign pension + Finnish pension) will determine your progressive Finnish income tax percentage rate, but tax under this percentage rate will only be payable on the Finnish-sourced income.
Did you move to Finland, or is the start date later than 4 April 2008?
If your date of moving to Finland is later than 4 April 2008, or if the start date of your pension income is later than 4 April 2008, your Nordic-sourced pension will be taxed in Finland . Any tax paid in another country will be credited, i.e. subtracted from your Finnish taxes. However, the credit amount cannot be higher than the portion of the Finnish tax that relates to the foreign pension.
After the start of the new year, you will receive from the pension institution a statement of your foreign pension income (the statement is usually called kontrolluppgift). Keep it in your records, because you will need it in May. The Finnish tax authority will send you a Pre-completed tax return form, and you should fill in all the necessary facts and information in May. Lines 10.1 and 10.2 of the form are intended for your foreign pension income and the taxes that you have already paid on it. Send back the form after you have filled it out. The local tax office will re-compute your taxes and send you a new Assessment Decision.
We recommend that soon after moving to Finland , or soon after your pension start date, you turn to the local tax office to ask for a revised tax card. This step will ensure that your tax withholding will already reflect your actual gross income including both foreign and Finnish-sourced pensions. Having had large enough amounts withheld from your income in Finland , you will avoid paying an outstanding amount of tax after the assessment is completed.
Healthcare contribution called sairaanhoitomaksu; sjukvårdsavgift
If you receive pension from Finland and also from another Nordic country, you will be liable to pay a healthcare contribution (1.5%) on the basis of your combined gross income. However, the contribution amount cannot be higher than the Finnish-sourced pension income.