1.
Taxation in Finland

2. Society needs taxes For financing public services
e.g. health services, schools, daycare, road infrastructure
For changing people's behaviour
taxation can be a tool of economic policy
e.g. differential taxes on products that are more friendly for the environment, tax relief given in order to support business in a less favoured geographical region
For reducing the inequality of income
e.g. progression, childcare allowance, pensions

3. Tax rules are part of the law
Laws are prepared by the Ministry of Finance and adopted by the Parliament
Some tax rules are agreed on the European level so that they concern Finland as a member country of the EU
Local districts and local parishes of churches decide on their tax percentage rates themselves

4. The State and local districts receive the money
The State and local districts receive the money
Taxpayers:
Private individuals and corporations (businesses etc)
Main collector of taxes is the Tax Administration
Others are Customs Finland and Trafi
We pay the money forward to recipients:
The State
Local districts
Kela
Churches
Forestry associations

5. Direct and indirect taxes
It is the taxpayer's obligation to pay the first type, Direct taxes:
Example: Everyone pays income tax on his wages
But someone else may be the actual payer of the second type, Indirect taxes:
Example: Value-Added Tax or VAT is added to the price of a product by the seller. However, the final result is that the consumer not the seller is the actual payer of VAT

6. Tax rates can be proportional, or they can be progressive
Taxes are proportional (flat), if the % rate is exactly the same for all taxpayers
Examples: Capital Tax, Municipal Tax
Taxes are progressive, if the % rate rises when the taxpayer's income rises
Example: Tax on Earned Income

7. Income is subject to tax
Individuals must pay tax on their income
Your tax on earned income (wages, salaries) goes to:
To the State of Finland
To the district where you live
To the parish of your Church if you pay Church Tax
To Kela as a healthcare contribution
Capital income (example: dividends you receive)
The taxes on capital income go to the State
Not only individuals but also businesses must pay income tax.
To the State, local districts, churches

8. Income taxation

9. Income taxation 1/3
Tax assessment is not complete until the tax year is over
However, you pay money in advance during the year. This reflects your future tax liability
This is the process of collecting tax in advance
In this way, each time you get paid you pay us some money in advance (as tax withheld). Your withholding % is printed on the card that you give to your employer
We send you this document called the tax card -verokortti. Your previous income history is included in the calculation. You have the right to make changes
Businesses must also pay tax in advance

10. Income taxation 2/3
After the year is over we will know how much income you had
We send Pre-Completed Tax Return forms to everyone. They show our database information on the income that has been earned and paid
You have the right to send us corrections
You have the right to demand tax deductions
Some deductions are automatic, others you must ask for
Examples of costs that can give you deductions: home-loan interest, major home repair costs

11. Income taxation 3/3
Autumn is the time when tax assessment is finished Then we will know if the right amount was paid
If too much was withheld by your payors, we will pay the difference back to you.
But if your payors withheld too little, you end up paying back tax. This is called jäännösvero
We send you the assessment decision by post
If you do not agree with your assessment decision, you have the right to appeal against it

12. Taxes on consumption Almost all sellers of goods and services pay VAT
This tax is included in the price of consumer goods As a result, it is the consumers who pay it
Excise taxes are added to the production costs of alcohol and tobacco and some other goods
This tax is also included in the price of the goods.

13. Other taxes Inheritance tax Gift tax Real estate tax Transfer tax
Depends on the donor's family relation and the value of Estate
Gift tax
Depends on the donor's family relation and the value of the gift
Real estate tax
Depends on the value of the building and the land where it is located. Is paid to the district where located
Transfer tax
Must be paid by buyers of real estate (or shares)
Tax at Source
Must be paid on deposits in banks
Public Broadcasting Tax
Is used for the financing of YLE. Must be paid by all grownup citizens and all corporate taxpayers