Finland

Employment expenses

Expenses incurred in acquiring or maintaining taxable income are, in principle, deductible items.

The maximum allowance for travel expenses between home and work is EUR 7,000 with a threshold share of EUR 900. Generally, the travel expenses deducted are calculated using the least expensive means of transportation (public transportation: train, bus, metro etc.).

Other deductions for earning income may include expenses for professional literature, own tools, using a home office for obtaining income, and so on, against original receipts. Instead of basing the deduction on receipts, it is also possible to claim a standardised deduction (either EUR 230, EUR 460, or EUR 920, depending on certain requirements) for using a home office for work. Moving, automobile, and entertainment expenses are generally not deductible.

If the employer does not reimburse for increased living expenses due to business trips, a deduction from earned income may be available. The amount of deduction shall be based either on actual expenses or a fixed amount determined annually in the tax authorities’ guidelines. Also, travelling and accommodation expenses due to business trips may be deducted if not reimbursed by the employer.

A standard deduction of EUR 750 from salary income is granted if actual business expenses are below that amount.

Personal deductions

Pension premiums

Mandatory pension premiums are fully deductible from earned income for both national and municipal tax purposes.

The deductibility of voluntary pension contributions is limited, and they are deducted from capital income (maximum deduction of EUR 5,000).

Other savings in certain long-term investments (e.g. a long-term savings contract with a bank, investment fund company, or other investment service company) are also entitled to the same deduction as the contributions to voluntary pension insurances.

Unemployment insurance premiums

Mandatory unemployment insurance premiums are deductible from earned income for both national and municipal tax purposes.

Interest expenses

Interest paid related to investment loans are deductible from capital income. If the deductions related to capital income exceed the amount of capital income, the end result is a capital income deficit of which 30% can be deducted from income taxes on earned income up to certain limit.

Household expenses

Household deduction can be availed for certain care and repair work, as well as installation and advising work related to telecommunications technology (e.g. installation work with personal computers, televisions, and other devices), done at the individual’s home, holiday home, or parents’ or grandparents’ home, up to EUR 3,500 per year (EUR 100 threshold share). The deduction can be granted only to cover costs of the actual work (i.e. the deduction is not granted for costs such as equipment, material costs, or travel expenses), and the hired company must be registered for prepayment register. In addition, the deduction cannot be granted if benefits, such as family care support, voucher for social and health care services, or energy subsidy have been received.

The following temporary changes concern the tax year 2024:

The deduction for expenses related to the move from oil heating to more sustainable energy sources will be increased as follows:

• The maximum deduction is EUR 3,500 (normally EUR 2,250).
• The deduction is 60% of the work-related expenses specified on a contractor’s invoice and 30% of the wages that the household has paid to a worker.
• The threshold share is EUR 100 per tax year.
• The temporary change is in force in 2022-2027.

The deduction concerning other renovating costs remains the same as before (i.e. the maximum deduction is EUR 2,250 [EUR 100 credit threshold], 40% of the work-related expenses paid to a company, and 15% of the wages if an employee was hired).

The deduction for household expenses incurred from household work, nursing, and care will be increased as follows:

• The maximum deduction is EUR 3,500 (normally EUR 2,250).
• The deduction is 60% of the work-related expenses specified on an invoice and 30% of the wages that the household has paid to a worker.
• The threshold share is EUR 100 per tax year.
• The temporary change is in force in 2022 thru 2024.

Energy costs

Due to high energy expenses and increased living expenses, one can apply for an electricity reduction if the electricity costs total more than EUR 2,000 between January 2023 and April 2023. The expanded deduction right is temporary, and the amount of the deduction is 60% for the portion exceeding EUR 2,000; however, the maximum is EUR 2,400 per permanent apartment. One can get a full deduction if the electricity bills for January 2023 thru April 2023 total EUR 6,000. Receiving an electricity deduction does not reduce the amount of other household deductions (e.g. household deductions based on renovations or care work).

The temporary electricity deduction will no longer be available for the tax year 2024.

Accommodation costs

Accommodation costs of a second home needed because of two (or more) permanent workplaces can be deducted. Certain conditions must be met. The maximum deduction is EUR 450 per month.

Donation deduction

Individuals and death estates are allowed to deduct cash donations of a minimum of EUR 850 and a maximum of EUR 500,000 from earned income if the purpose of the donation is development of science or art. The requirement for deduction is that the donation is made to a university with public financing that is located in the European Economic Area or to a related university fund. The purpose of this change is to advance private finance of universities.