35% flatrate tax for Key employees

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Maxitt
Posts: 3
Joined: Wed Apr 12, 2017 9:54 pm

35% flatrate tax for Key employees

Post by Maxitt » Mon Sep 25, 2017 12:07 pm

Hi everybody, hope this is the right section.

I am contemplating a move to Finland and I am doing my calculations to see wether it is financially viable. As such I was reading up on the 35% flatrate Tax possibilities and called VERO regarding it. However, it remains unclear as the VERO employee was quite confusing over the phone. So I hope anybody can provide me with some information and maybe experience in getting this.

https://www.vero.fi/en/individuals/tax- ... _countrie/

A few things that are unclear are:
- As I understand it the 35% flatrate means that you pay 35% tax (including salary tax and city tax together). So it would be beneficial to have this if you earn more than 60K Euro per month (considering you live in Espoo or Helsinki). Am I correct in my assumptions or is it better to stick with the regular tax scheme?

- Another rule is that you can have it for a maximum duration of 48 months. What happens if you stay longer than this? Will you get a new tax card after 4 years or will they start recalculating the taxes from the preceding years?

- It is unclear to me if you can apply for this if you are moving to and planning to live in Finland.

- " Your wages will not be subject to the Finnish health insurance contribution or daily allowance." Is that a benefit? My experience with private insurance is that it can get costly :?

Thanks, Max



35% flatrate tax for Key employees

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Piet
Posts: 456
Joined: Thu Aug 13, 2015 3:45 pm
Location: Finland

Re: 35% flatrate tax for Key employees

Post by Piet » Tue Sep 26, 2017 10:59 pm

Maxitt wrote:Hi everybody, hope this is the right section.

I am contemplating a move to Finland and I am doing my calculations to see wether it is financially viable. As such I was reading up on the 35% flatrate Tax possibilities and called VERO regarding it. However, it remains unclear as the VERO employee was quite confusing over the phone. So I hope anybody can provide me with some information and maybe experience in getting this.

https://www.vero.fi/en/individuals/tax- ... _countrie/

A few things that are unclear are:
- As I understand it the 35% flatrate means that you pay 35% tax (including salary tax and city tax together). So it would be beneficial to have this if you earn more than 60K Euro per month (considering you live in Espoo or Helsinki). Am I correct in my assumptions or is it better to stick with the regular tax scheme?

- Another rule is that you can have it for a maximum duration of 48 months. What happens if you stay longer than this? Will you get a new tax card after 4 years or will they start recalculating the taxes from the preceding years?

- It is unclear to me if you can apply for this if you are moving to and planning to live in Finland.

- " Your wages will not be subject to the Finnish health insurance contribution or daily allowance." Is that a benefit? My experience with private insurance is that it can get costly :?

Thanks, Max
For 60K euro a month salary, you can easily get yourself a good lawyer and financial advisor that will charge you both 650€ an hour minimum and they will sort it out for you. 8) :thumbsup:
If god would give us the source code, we could change the world
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Beep_Boop
Posts: 1969
Joined: Tue Oct 12, 2010 8:29 pm
Location: Niflheim, Suomi

Re: 35% flatrate tax for Key employees

Post by Beep_Boop » Tue Sep 26, 2017 11:40 pm

Did you say 60k/month? Sorry to sound classist, but people with 60k/month job offers not only almost never exist in real life, but they wouldn't hang out around poor foreigner and finnophile forums. People who earn 800 THOUSAND euros a year don't really strike me as the type of folks who are unsure about how to proceed in their life situations or as people seeking the commoners' advice and take on things.

Additionally, with such unrealistic, and borderline unbelievable salary, you can hire your own immigration consultancy firm that can tailor some advice to fit your specific situation.
Every f*cking application is unique.You can't measure the result of your application based on random anecdotes online. Stop being a moron!


tavastia
Posts: 229
Joined: Tue Mar 08, 2016 1:54 pm

Re: 35% flatrate tax for Key employees

Post by tavastia » Wed Sep 27, 2017 7:58 am

Probably he just meant 6k / month... Well do your math, calculate how much you will be taxed using https://prosentti.vero.fi/VPL2017/Sivut ... iedot.aspx and calculate how much an insurance will be vs. paying locally.
Last edited by tavastia on Wed Sep 27, 2017 10:32 am, edited 1 time in total.


Rosamunda
Posts: 10609
Joined: Fri Jan 02, 2004 12:07 am

Re: 35% flatrate tax for Key employees

Post by Rosamunda » Wed Sep 27, 2017 10:22 am

I think you need to get some professional advice. The company offering you the job might be able to arrange this. They will also need to provide you with some kind of proof that you are indeed a "key employee" - which is the basis for the flat tax benefit. It is intended for short term assignments so, no, it cannot be extended beyond the max 48 months (as stated on the page you linked to).

My understanding is that you will not be covered by the Finnish health insurance (so you will need private medical insurance) and you are also unable to make any deductions from your taxable income (eg household expenses, commuting expenses etc). So factor those costs into your calculations. https://www.vero.fi/en/individuals/tax- ... eductions/

I assume (not sure) that because you become a Finnish tax resident as soon as you start working, you will be taxed in Finland on your global income. In other words, if you have income from other sources - eg outside Finland - this would be taxable here too but at the progressive tax rate (since they are not based on the "Key employee" concept) and, again, no tax deductions are allowed. Some of the English on that page is dodgy (and I'm too lazy to read the Finnish):
None of the usual tax deductions are available to the key employee; no deduction is granted for any costs for the production of income, nor can deductible costs be set off against any other income that you have. If you earn other income, your tax bracket will be higher on the progressive scale because of your salary as a key employee.
-so, as I said, you need to talk to Vero or your employer etc
Last edited by Rosamunda on Wed Sep 27, 2017 3:28 pm, edited 1 time in total.


mdn
Posts: 71
Joined: Thu Dec 07, 2006 9:58 am
Location: Tampere, Finland

Re: 35% flatrate tax for Key employees

Post by mdn » Wed Sep 27, 2017 11:47 am

Maxitt wrote:My experience with private insurance is that it can get costly :?
There is also some catch with private insurance in Finland - a lot of Finnish 'private insurances' require Kela as a base.


betelgeuse
Posts: 2621
Joined: Thu Aug 29, 2013 1:24 am

Re: 35% flatrate tax for Key employees

Post by betelgeuse » Fri Sep 29, 2017 12:10 pm

Maxitt wrote: - Another rule is that you can have it for a maximum duration of 48 months. What happens if you stay longer than this? Will you get a new tax card after 4 years or will they start recalculating the taxes from the preceding years?
You move to the regular system. It will not be clawed back from previous years.
Maxitt wrote: - It is unclear to me if you can apply for this if you are moving to and planning to live in Finland.
You can.
Maxitt wrote: - " Your wages will not be subject to the Finnish health insurance contribution or daily allowance." Is that a benefit? My experience with private insurance is that it can get costly :?
The financing of these is separate from being eligible. You not being required to finance the system, does not mean you wouldn't be able to benefit from it.


Rosamunda
Posts: 10609
Joined: Fri Jan 02, 2004 12:07 am

Re: 35% flatrate tax for Key employees

Post by Rosamunda » Fri Sep 29, 2017 5:15 pm

betelgeuse wrote:
Maxitt wrote: - " Your wages will not be subject to the Finnish health insurance contribution or daily allowance." Is that a benefit? My experience with private insurance is that it can get costly :?
The financing of these is separate from being eligible. You not being required to finance the system, does not mean you wouldn't be able to benefit from it.
So one rule for students and another for highly-paid company executives.... or did I miss something?


betelgeuse
Posts: 2621
Joined: Thu Aug 29, 2013 1:24 am

Re: 35% flatrate tax for Key employees

Post by betelgeuse » Mon Oct 02, 2017 2:10 pm

Rosamunda wrote:So one rule for students and another for highly-paid company executives.... or did I miss something?
There are not. However, there are separate rules for temporary and permanent residents. Students are usually the former and executives either based on their contract.


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