Income tax question

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jopnnyoneye
Posts: 7
Joined: Sun Jul 05, 2015 10:31 am

Income tax question

Post by jopnnyoneye » Sun Jan 10, 2016 7:52 pm

I wonder if someone on here can clarify a question that I have regarding income tax payable whilst working in Finland.

I am a UK citizen and passport holder, who arrived and started working here at the very end of September and was expecting to stay until May or June 2016.

I registered with the local tax office and was asked how long I would be staying, replying that it would be until May or June 2016.

I was then told that if I stayed longer than 6 months in total, I would be considered a tax resident of Finland for both 2015 and 2016. My previous understanding of the situation, was that if I stayed in country for more than 6 months in any one tax year, this would be the case, however it now appears that if I stay beyond the end of February/beginning of March (more than 183 days), I will fall into this worldwide tax situation.

My concern is that I am non resident for tax purposes in the UK and have been for a number of years. I am based out of the UAE and did previous work in the Emirates during 2015, that was tax free and I may well do further work later this year in the same area, which will again be tax free.......but not it seems if I end up falling into this Finnish worldwide taxation rule, which although they can do little about collecting it from me as I have no assets in Finland, the UK authorities apparently can at the request of the Finnish authorities, as I own property there.

As it stands and my understanding of what they have told me, I will be resigning at the end of February because suddenly to have to pay two complete years tax on monies that I have worked hard to keep substantially tax free, will not make it worth staying in the job anyway. I am perfectly happy to pay on what I earn here and expected to do so, but not on any other worldwide earnings that do not require it to be paid at source.

Anyone had any experience of a similar situation please ?

Many thanks,

John.



Income tax question

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betelgeuse
Posts: 2737
Joined: Thu Aug 29, 2013 1:24 am

Re: Income tax question

Post by betelgeuse » Sun Jan 10, 2016 10:00 pm

jopnnyoneye wrote: I was then told that if I stayed longer than 6 months in total, I would be considered a tax resident of Finland for both 2015 and 2016. My previous understanding of the situation, was that if I stayed in country for more than 6 months in any one tax year, this would be the case, however it now appears that if I stay beyond the end of February/beginning of March (more than 183 days), I will fall into this worldwide tax situation.

My concern is that I am non resident for tax purposes in the UK and have been for a number of years. I am based out of the UAE and did previous work in the Emirates during 2015, that was tax free and I may well do further work later this year in the same area, which will again be tax free.......but not it seems if I end up falling into this Finnish worldwide taxation rule, which although they can do little about collecting it from me as I have no assets in Finland, the UK authorities apparently can at the request of the Finnish authorities, as I own property there.

As it stands and my understanding of what they have told me, I will be resigning at the end of February because suddenly to have to pay two complete years tax on monies that I have worked hard to keep substantially tax free, will not make it worth staying in the job anyway. I am perfectly happy to pay on what I earn here and expected to do so, but not on any other worldwide earnings that do not require it to be paid at source.
https://www.vero.fi/en-US/Precise_infor ... _fo(21275)

"When you submit your tax return to the Finnish Tax Administration you must also declare the income received from sources in other countries than Finland during your stay in Finland."

For a move over 6 months, you are universally liable for tax. However, Finland will not tax income earned before you moved to the country.


betelgeuse
Posts: 2737
Joined: Thu Aug 29, 2013 1:24 am

Re: Income tax question

Post by betelgeuse » Sun Jan 10, 2016 11:51 pm

roger_roger wrote:
betelgeuse wrote:For a move over 6 months, you are universally liable for tax. However, Finland will not tax income earned before you moved to the country.
Why? Isn't the 6 months tax exemption for EU residents only? despite being EU citizen, the OP is registered resident outside EU does he still get 6 months tax free period?
Are you confusing two things:
  1. Moving into Finland and becoming universally tax liable (yleisesti verovelvollinen)
  2. 6 month rule for working abroad for people universally tax liable in Finland (kuuden kuukauden sääntö)
This thread is about the former and the OP is not getting a 6 month tax exception. Neither of them is for EU residents only.

http://www.finlex.fi/fi/laki/ajantasa/1 ... 1535#L1P11
http://www.finlex.fi/fi/laki/ajantasa/1 ... 1535#L4P77


jopnnyoneye
Posts: 7
Joined: Sun Jul 05, 2015 10:31 am

Re: Income tax question

Post by jopnnyoneye » Tue Jan 12, 2016 12:08 pm

Thanks for all your replies and especially 'betelgeuse's' link, which I had not come across, despite searching.

The fact that I will not have to account for income prior to my arrival in Finland is a relief, but still leaves what I earn after my departure later this year (assuming that it's back in the Middle East), open to taxation, which is disappointing.

Still, many thanks to all again.

J


betelgeuse
Posts: 2737
Joined: Thu Aug 29, 2013 1:24 am

Re: Income tax question

Post by betelgeuse » Tue Jan 12, 2016 2:46 pm

jopnnyoneye wrote: The fact that I will not have to account for income prior to my arrival in Finland is a relief, but still leaves what I earn after my departure later this year (assuming that it's back in the Middle East), open to taxation, which is disappointing.
Why do you think so? Universal tax liability ends when you leave the country.

https://www.vero.fi/fi-FI/Syventavat_ve ... uus(25545)

"Ulkomaan kansalaisen ja kansalaisuutta vailla olevan henkilön yleinen verovelvollisuus Suomessa päättyy välittömästi, kun hän muuttaa pois Suomesta."


jopnnyoneye
Posts: 7
Joined: Sun Jul 05, 2015 10:31 am

Re: Income tax question

Post by jopnnyoneye » Fri Jan 22, 2016 10:53 am

Apologies for the late response, but I have appreciated all your input to this question and 'betelgeuse' has been especially helpful, so thank you.
I will speak again to the tax authority to just finally confirm what you have all said and then take it from there.
Many thanks,
John.


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