Finland

Social security contributions

Social security contributions are divided between the employer and the employee. The employees' part is withheld from the salary, and the employer remits the amounts to the appropriate instances on the behalf of the employee. The below-mentioned social security contribution rates are confirmed for 2024.

Employer’s social security payments

The employer’s part of the Employment Pension Insurance contributions may vary from employer to employer. The average percentage is 17.34%. The Employer's Unemployment Insurance contribution is graded according to the total compensation paid by the employer during a tax year. The contribution rate is 0.27% up to EUR 2,337,000 of total compensation paid and 1.09% on the exceeding compensation amount. The average Statutory Accident Insurance rate is on average 0.57% of the wage total. The average Statutory Group Life premium is 0.06% of the wage sum. The Employer’s Sickness Insurance contribution rate is 1.16%. 

Employee’s social security payments

Employees’ Pension Insurance contribution is 7.15% for employees of age 17 to 52 years or 63 to 67 years and 8.65% for employees of age 53 to 62 years. Employee’s Sickness Insurance contribution is 1.52%. It consists of two parts: The Medicare contribution of 0.51% and the Daily Allowance contribution of 1.01%. The Daily Allowance premium is not collected if the total amount of salary is less than EUR 16,499. The Employee’s Unemployment Insurance contribution is 0.79%.

If the employee's salary is taxed under the foreign expert tax regime, the Sickness Insurance premium is included in the flat 32% tax rate. These contributions are remitted to the appropriate insurance companies together with employer social insurance contributions. However, employee’s Pension Insurance contributions are payable.

If a certificate of coverage (A1, E101, or similar) is obtained for an assignee sent to Finland, basically no Finnish social security contributions are payable (depending on the applicable social security treaty, some contributions may still remain payable in Finland). For employees taxed under the foreign expert tax regime, the tax rate remains the same flat 32% regardless of the A1 or certificate of coverage even though the Sickness Insurance premium is embedded in the rate.

Consumption taxes

Value-added tax (VAT)

The standard VAT rate is 24%. A reduced rate of 14% is applied to food and animal feed. The reduced VAT rate of 14% also applies to restaurant and catering services. A reduced VAT rate of 10% is applied to certain goods and services (e.g. books, newspapers and magazines, accommodation, passenger transport).

A zero rate applies in certain instances (e.g. intra-Community supplies of goods and exports of goods). Additionally, certain services (e.g. financial services, insurance services, and certain educational services) are exempted from VAT.

Net wealth/worth taxes

There are no net wealth/worth taxes in Finland.

Inheritance, estate, and gift taxes

Taxes are imposed on property acquired by inheritance, will, or gift. Inheritance tax is levied to a person who receives immovable or movable property through inheritance or will if the deceased, the inheritor, or the beneficiary was resident in Finland at the time of death. Immovable property located in Finland and shares of a company, the assets of which consist mostly of immovable property, are always subject to inheritance taxation in Finland.

Gift tax is levied to a person who receives immovable or movable property as a donation if the donor or the beneficiary is resident in Finland at the time of donation. Immovable property located in Finland and shares of a company, the assets of which consist mostly of immovable property, are always subject to gift taxation in Finland. The taxable amount of gifts is calculated cumulatively in three-year periods. This means that if gifts received from the same person are EUR 5,000 or more in three years, the receiver will be liable to pay gift tax.

The tax is levied on both resident and non-resident beneficiaries. The taxable value of the inheritance, gift, or bequest is based on the fair market value of the property at the date of death/donation. The tax rate applicable to the inheritance or to the gift depends on the beneficiary's relationship to the deceased or donor. The tables below apply if the inheritor or donor is the spouse (including a cohabitating partner if the partners have a common child or if they have previously been married), father, mother of the deceased, or donor, and to any linear descendent of deceased/donor or spouse (including stepchild/adopted child).

As of January 2024, the period of inheritance tax payment will be extended from two years to ten years. The change applies to inheritance taxes for which the first instalment is due on or after 1 January 2024.

Inheritance tax rates

Gift tax rates

Property taxes

The municipalities in Finland collect property tax from owners of real estates. Tax on real estate is payable on real estate situated in Finland. The most important exemptions from the tax liability are for forested and agricultural land. The real estate tax is payable by those who own the taxable property at the beginning of the calendar year. Tax is calculated on the taxable value of the real property. In general, the rate may vary between 0.41% and 2.0% of the taxable value. Municipalities will annually decide within allowed limits what percentage is applied in each municipality.

The municipality may impose a separate real estate tax on a vacant plot if the plot is situated in a town plan area and it is not in residential use or under construction. The tax rate on a vacant plot may vary between 2% and 6%.

As of 2024, the general property tax rates for land and buildings will be differentiated. The lower limit of the general property tax rate for land is increased from 0.93% to 1.30%. The tax rate will therefore be increased in municipalities where the rate has been below the new lower limit. The upper limit remains at 2.00%. The general property tax rate for buildings will remain between 0.93% and 2.00%.

Transfer tax

Transfer tax is imposed on transfers of real property located in Finland and Finnish securities. The tax is 3% on transfers of real property, 1.5% on transfers of shares in an entity of which the assets are mostly comprised of real property (directly or indirectly), and 1.5% on transfers of other securities. The tax is calculated on the transfer price. The transfer of listed company securities is, in most cases, tax exempt. In addition, no transfer tax is imposed if both the transferor and the transferee are non-residents (except the cases of transferring shares in Finnish real estate companies).

There is no liability to transfer tax if the transfer is due to an inheritance, donation, or a division of property subject to a matrimonial right.

Excise duties

Alcohol and alcoholic beverages, tobacco products, liquid fuels, electricity, natural gas, and coal are subject to European Union (EU) harmonised excise duties. National excise duties are levied in Finland on waste delivered to landfill sites, lubricating oil, oil imported into or through Finland, soft drinks, beverage containers, peat, and tall oil.

The excise duty on tobacco, cigarettes, and nicotine pouches varies between 34% and 60%.

The excise duty on alcohol products varies between 28.35 cents per centilitre of ethyl alcohol and 771 cents per centilitre of ethyl alcohol. As of 1 January 2024, alcohol tax on wines and spirits increases. On average, excise duty on alcoholic beverages will increase by around 2%.